Several governments and broad sectors of civil society are opposed to this unequal negotiating framework, which would limit the capacity of governments to make trade work for sustainable development and poverty eradication.
Oxfam International asserts that the FTAA will not contribute to sustainable development. It is based on the failed model of the North American Free Trade Agreement, which has neither produced growth nor addressed the crisis of poverty in Mexico.
This paper summarizes the reasons why Oxfam International opposes the FTAA. It puts forward our recommendations for developing different rules and provides an alternative framework for integration.
]]>In this report, Oxfam calls for the major players in the coffee industry to support a Coffee Rescue Plan to overcome the current crisis and create a more stable market. The report analyzes the origins and effects of collapsed coffee prices and urges American consumers to join Oxfam in bringing relief to farmers and a change to the system.
]]>Amid cheers from a throng of enthusiastic supporters and international media, Make Trade Fair won the day.
Oxfam's trade campaign was launched.
Within hours of the Hong Kong debut, events were held in 25 cities including Brussels, Dublin, Geneva, Mexico City, San Salvador, and Washington, D.C. These events ranged from press conferences and symposiums to a rock concert in London’s Trafalgar Square.
Oxfam's trade campaign seeks to unite concerned citizens around the world in calling for fair trade policies that will help move millions of people out of poverty.
Nobel Prize Professor Amartya Sen, UN Secretary-General Kofi Annan, and musician and social activist Bono were among those who endorsed the campaign. "Oxfam has got it right," said Bono. "It wouldn't cost much to change the rules of trade so that poor countries can work their way out of poverty. But the world's leaders won't act unless they hear enough people telling them."
Also in this issue of EXCHANGE, writers Frances and Anna Lappé discuss their book Hope's Edge: The Next Diet for a Small Planet, and we bring you updates on Oxfam's work with water and sanitation, drought in Ethiopia, and indigenous women in the highlands of Peru who are speaking out after decades of violence.
]]>"Just weeks after Congress passed a new Farm Bill we're seeing the negative impacts of our broken agricultural policies played out on the international stage. The WTO has confirmed that the billions of dollars the US pours into cotton subsidies distort trade and hurt developing country farmers. But Congress chose to ignore our international obligations and continued a broken and bloated farm policy, leaving other sectors of the US economy vulnerable to retaliation by Brazil.
"The Farm Bill passed by Congress has no effective payment caps to limit farm subsidies to large scale cotton producers. According to the Congressional Budget Office (CBO), cotton subsidies in 2007 totaled $2.5 billion ? $1.2 billion of which went to very trade-distorting counter-cyclical payments alone ? and cotton subsides are projected to continue for the duration of the recently passed Farm Bill.
"The WTO ruled in the Brazil cotton case that direct payments needed to be reclassified from Green Box (least trade distorting) to Amber Box (most trade distorting) because of planting flexibility restrictions, but no such reforms made it into the final Farm Bill. Most disturbing is the inclusion of a new domestic subsidy to US cotton buyers to the tune of $309 million for the duration of the Farm Bill, restoring a key element of the "step 2" program that was ruled illegal by the WTO in 2005.
"This ruling should serve as a wake up call to Members of Congress. Failing to make substantive changes in farm policy when the opportunity presented itself, Congress has sent the signal that the US will continue to ignore of our international trade obligations. The result is that our trade partners have few options but to litigate and retaliate."
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In an open letter to the G8 leaders made public today, renowned singers Angelique Kidjo, Annie Lennox, Emmanuel Jal, and Miguel Bose joined celebrated actors Bill Nighy (who is currently at the G8), Colin Firth, Djimon Hounsou, Gael Garcia Bernal, Kristin Davis, Minnie Driver, Rahul Bose, and Scarlett Johansson to call on the heads of state to raise their game on poverty, especially in the face of a worldwide food crisis. The G8 meets in Japan from 7-9 July for their annual summit, with the food crisis high on the agenda along with climate change, oil prices, inflation and the economy, and African development.
"Through our work with Oxfam, each of us has been involved in the ongoing fight to end extreme poverty. Whether in classrooms in India, orphanages in South Africa, camps in Chad, farms in Ethiopia or health clinics in Tanzania, many of us have witnessed at first hand that aid works; that ordinary people achieve remarkable things every day but also that there is a great deal more that needs to be done," the ambassadors stated in the joint letter.
Oxfam's ambassadors have seen the importance of development aid first hand after travelling around the world with the humanitarian organization. Bill Nighy travelled to Tanzania with Oxfam last year and is currently in Japan lobbying G8 leaders to put poverty issues at the top of the agenda. Last year, Scarlett Johansson travelled to India and Sri Lanka with Oxfam where she visited a school for girls, and survivors of the tsunami. Kristin Davis has recently returned from her second trip to South Africa with Oxfam, where she met with community organizations fighting against the HIV/AIDS epidemic.
"The Millennium Development Goals that were set out in 2000 were chosen because they were ambitious, but also because they were realistic and achievable," continued the letter. "The current delays in meeting these commitments are a disgrace."
The ambassadors issued a call to action to the heads of state, reminding them that it is the world's poor who are most vulnerable to increased food prices and the negative impacts of climate change.
"We look to you to address the global economic uncertainty, but you must also look beyond your own borders and not turn your backs on the world's poorest people," continued the letter. "Only then will you lead the way to a more prosperous and safer future for us all."
]]>?Faced with a mounting food crisis at home and abroad, Congress had the opportunity through the Farm Bill to shift funds from wasteful agricultural subsidies for large scale farms to food aid to meet the needs of the poor,? said Raymond C. Offenheiser, president of Oxfam America. ?But instead, Congressional leaders settled on a bill that will continue to be costly to taxpayers, undermine our rural economy, damage our trade relationships, and hurt the world?s poorest farmers.?
Even with record breaking prices for corn, soybean, and wheat, as well as record-setting agricultural exports, congressional Republicans and Democrats fought to the bone to prevent any meaningful reforms subsidies that are fiscally irresponsible and harm farmers in developing countries. Across the country, from the left and the right, from San Francisco to Des Moines, Americans have spoken out in favor of changing a system that rewards those who need help the least. Unfortunately, their voices were blatantly ignored by the leadership.
?With the future of the world trading system at a critical juncture, an improved American Farm Bill would have helped facilitate a WTO agreement to reduce trade-distorting agricultural subsidies and end dumping,? said Offenheiser. ?But the pigs at the trough continued to promote generous handouts from taxpayers instead, even as agriculture markets are so strong and our economy so weak.?
Despite mustering the necessary increases for domestic nutrition programs, Congress failed to meaningfully address the crisis of rising food prices overseas and the need to increase the efficiencies of our food aid programs. Current law requires that food aid be purchased in the US and transported on US-flagged ships, meaning that food aid takes months to deliver and costs twice as much. Shifting a quarter of the food aid budget to cash for purchase from regional sources as proposed by President Bush would mean that even more people would be fed.
?Congress should modernize the US food aid program to permit at least one-quarter of US food aid contributions in the form of cash rather than commodities, as requested by the Administration and endorsed by international aid and humanitarian organizations. This reform will help aid agencies respond to emergencies,? said Offenheiser. ?While the Bush Administration proposal would have made approximately $300 million available for local purchase each year, the farm bill only includes $60 million for a small pilot project to be administered over several years.?
While accomplishing little reform, the final bill does make incremental improvements by increasing nutrition and conservation funding and providing a host of critical provisions beneficial to socially-disadvantaged producers here at home. Oxfam also welcomed the extension of US trade preference programs for developing countries, like Caribbean Basin Initiative, also included in the Farm Bill package.
?Some steps were taken to hold back the legacy of discrimination that has lingered on farm programs for decades and to extend duty-free programs for some of the poorest countries in our hemisphere,? said Offenheiser. ?But on the verge of a massive food crisis, Congressional action on the Farm Bill to allow special interests and bureaucracy to deprive poor and vulnerable people food is simply unconscionable.?
]]>"Given the context of rising food and fuel prices, a fair trade deal as promised could make a massive difference to people living in poverty around the world," said Raymond C. Offenheiser, president of Oxfam America. "But what's currently on the table falls far short of what is needed and continues to prioritize the interests of rich countries, as locking in big tariff cuts without adequate safeguards in place will only expose poor farmers to more shocks."
As trade ministers from 35 countries gather at the World Trade Organization in another attempt to forge a trade deal, Oxfam is calling for a clear and transparent process that involves all members and gives formal opportunities to respond to proposals.
If current offers are accepted, the US may not have to cut a penny from current spending on agriculture, and the EU will only have to cut around $2.6bn, from a total of $30bn, according to Oxfam. The proposals on non-agricultural trade will lock poor countries into low-value economies by preventing them from building up infant industries through strategic trade policy.
"High prices certainly present the opportunity to reform, but with current proposals, this opportunity looks set to be squandered," said Offenheiser. "A trade deal that only accommodates vested interests could be destructive for development and efforts to reduce poverty."
The recently passed US Farm Bill has landed like an unwelcome guest at the negotiating table. In a new analysis released today, Oxfam outlines how the Farm Bill undermines progress in the Doha Round. Despite the fact that US farmers are enjoying very high prices and record farm income -- an average of $89,000 per farm -- the US Congress actually expanded government farm subsidies in the 2008 Farm Bill and reinstated cotton subsidies previously ruled illegal at the WTO.
"Not only do provisions in the 2008 Farm Bill go against previously agreed to obligations at the WTO, but they maintain -- and in some cases, increase -- precisely the subsidies and market protections that developing countries entered the Doha Round to stop," said Offenheiser.
Europe has also not done enough to ensure a pro-poor deal. The EU continues to insist on exemptions for its sugar, beef and dairy farmers, while simultaneously denying poor countries the space to safeguard their own farmers' livelihoods. In recent weeks they have proposed resurrecting the controversial 'peace clause' which would protect them from challenge at the WTO.
"A fair trade deal would mean significant reform of trade distorting subsidies in rich countries coupled with flexibilities for poor countries to promote food security, livelihoods and rural development," said Offenheiser. "But what we're looking at now would only entrench existing advantages for rich countries and vulnerabilities for poor countries."
]]>?Trade preference programs are contributing to the growth of manufacturing and agricultural sectors in many developing countries. This helps create jobs, especially for women, who often have relatively few economic alternatives,? said Raymond C. Offenheiser, President of Oxfam America. ?Congress did the right thing by extending these preferences before they expire, as they offer opportunities for developing countries as well as for US businesses and consumers.?
For more than three decades, the United States has extended preferential duty-free market access to imports from developing countries as a means of stimulating economic growth and poverty reduction. This legislation extends for one year the Generalized System of Preferences (GSP), which provides duty-free entry to more than 4,650 products from 131 designated beneficiary countries and territories. It also provides a one-year extension of the Andean Trade Preferences Act (ATPA), which waves duties on additional products from Colombia, Peru, Ecuador and Bolivia, although the Senate forced a compromise that treats Bolivia and Ecuador differently by limiting their participation in the program to six months with Presidential discretion for another 6 month term. In addition, the bill amends the African Growth and Opportunity Act to ensure that African countries can use third country fabric in apparel qualifying for duty-free treatment.
?Trade preference programs benefit not only developing countries but also US businesses which have relied on goods imported duty-free to be used as inputs into products that are manufactured here,? said Offenheiser. ?Next year, Congress should take early action to improve and expand on these preference programs in order to enhance their ability to help the poor in developing countries.?
The US is the Andean countries? most important trading partner and over half of Andean country exports to the United States now enter under the ATPA. An estimated 2.3 million jobs in the Andean countries depend on the ATPA. Limiting the extension of benefits for Bolivia and Ecuador will adversely affect their efforts to enhance economic growth and reduce poverty and is unlikely to resolve US foreign policy differences with those countries. This problem is exacerbated by the US Trade Representative?s recent action to suspend Bolivia, South Americans poorest nation, from receiving benefits through ATPA at all, which could take effect as soon as next month.
?Bolivia and Ecuador have widespread poverty and denying them the ability to benefit from the US Andean preference program will only exacerbate poverty in two of South America?s poorest nations, ? Offenheiser stated. ?In the end, helping to reduce poverty will do more to further US foreign policy goals than punishing these nations because of differences with their current political leadership."
]]>The US and EU have billed their proposal to eliminate tariffs and non-tariff trade barriers on a list of 43 climate-friendly goods as bold and new, but according to Oxfam, it is neither.
“The UN conference on climate change is being used as a pretext to dust off old proposals that haven’t gotten anywhere at the WTO,” said Oxfam spokesperson Barry Coates. “The EU and the US are passing around old wine in new bottles, but developing countries aren’t fooled.”
The list of goods proposed for liberalization includes products relating to wind, solar, and clean coal energy technologies, drawn from a list of in a recent World Bank study. The proposal also seeks to eliminate tariffs on an additional list of 150 environmental goods, as previously submitted by OECD countries in the context of current WTO negotiations, such as all laboratory equipment. The proposal goes further to include very ambitious objectives in services liberalization, calling for a binding of existing levels of market access and national treatment as well as new liberalization on a large number of services.
“Similar proposals have been floated in Doha negotiations by the US and the EU before, but discussion at the technical level in the WTO negotiations has been unable to resolve the difficulties inherent in such a list based on approach,” said Coates. “Liberalization of goods and services in developing countries, including in the environmental sector, has been the modus operandi for the US and the EU in the Doha round, while steadfastly refusing to undertake the reform of their unfair trade practices.”
Many of the products and services on the list are from developed countries and have uses far beyond that of environmental benefit and certainly beyond greenhouse gas reductions. Green technologies developed in rich countries are usually too expensive and not the most appropriate for developing countries. Furthermore, the opening of sectors such as sanitation, as included in this proposal, has often resulted in poor quality of services and little if any improvement in affordable access for poor communities.
“This proposal attempts to perpetuate the perception that the climate change challenge at the WTO can be easily addressed through promoting trade in a select few goods and services,” said Coates. “Any liberalization of environmental goods and services has to be debated within the context of development, be pro-poor, and meet defined objectives for addressing climate change without undermining the policy space of developing countries.”
For these negotiations to deliver an appropriate pro-poor outcome, a broader, more sustainable development dimension must be undertaken, one that is not based solely on trade liberalization, according to Oxfam. This includes ensuring the reflection of the principle of special and differential treatment and less than full reciprocity.
“Ensuring that clean technologies are effectively and sustainably transferred to developing countries—with appropriate policy measures to support adoption, adaptation, research and development, and product innovation—is the way to go,” continued Coates. “But so far, we’ve only had broken promises on finance, broken promises on technology transfers, and overly restrictive intellectual property rights.”
]]>“Congress did the right thing today in extending trade preferences for Andean countries, but a permanent extension of these programs is needed,” said Raymond C. Offenheiser, President of Oxfam America. “In a region where half of the population lives in poverty, trade preferences have created millions of jobs and made it possible for Andean countries to export products like clothing and jewelry, cut flowers and asparagus to the United States duty-free for more than 15 years.”
Andean and other developing countries have held preferential duty-free market access to the US as a means of stimulating economic growth and poverty reduction. These preference programs have contributed to the development of manufacturing and agricultural sectors in many developing countries. They have also helped create jobs, in many cases for women, who have relatively few economic alternatives. Businesses in the US have also benefited from preferences, relying on goods imported duty-free to be used as inputs into products that are manufactured here. Furthermore, requirements for participation preference programs have been used to bring about greater respect for workers’ rights.
“Continuation of the preference programs will support additional growth and further stimulate export diversification in these growing economies, harnessing the opportunity of trade as a way of achieving sustained economic growth and poverty reduction,” said Offenheiser.
The United States is the Andean countries’ most important trading partner. Over half of Andean country exports to the United States now enter under the Andean Trade Preference Act (ATPA). An estimated 2.3 million jobs in the Andean countries depend on these exports under ATPA. For example, two-thirds of Bolivia’s exports under ATPA are manufactured products such as jewelry, apparel, and wooden furniture, and the vast majority of companies involved in their manufacture are small and micro-enterprises that provide decent, formal-sector jobs. Non-traditional exports like cut flowers and asparagus have grown particularly rapidly in Andean countries under ATPA, even though petroleum-based products still make up about two-thirds of the value of exports that benefit from this preference program.
Poverty and inequality continue to be pervasive in Andean countries, with the richest 10 percent of the population taking home over 40 percent of national income, while the poorest 10 percent survive on less than 1.4 percent. Poverty in rural areas has been the driver of continued illicit crop cultivation in the Andean region, where more than 98 percent of the world’s coca leaf is cultivated. As long as poverty persists in these countries, farmers will continue to turn to illicit coca cultivation to help pay for basic essentials.
“Poverty and inequality continue to be pervasive in Andean countries, a situation that can generate social unrest, spur migration, and encourage illicit crop cultivation,” continued Offenheiser. “These problems need to be addressed through US foreign policy and counter-narcotics strategy, but alternative development efforts and preferential access to the US market will continue to play a pivotal role.”
]]>"It's good to see Starbucks finally coming to the table, which they initially refused to do," said Seth Petchers, coffee lead for Oxfam International's Make Trade Fair campaign. "Starbucks now says it won't block the initiative, but what it hasn't said is how it will actively support Ethiopia's stated efforts to obtain trademarks for its coffees which will bring added benefits to poor farmers."
After initially dismissing Ethiopia's plan to trademark its specialty coffees, Starbucks, which came under international pressure from campaigners, has now said it is ready to recognize Ethiopia's right to pursue this path.
Ethiopian officials have said Ethiopia will continue to pursue the trademarking and licensing initiative and hopes to enter in to partnership with Starbucks and other companies through negotiated licensing agreements. These would recognize Ethiopia's ownership of the coffee names and allow them to get a fairer share of the profits for their producers. Ethiopia has obtained a trademark in the US for its Yirgacheffe coffee.
Oxfam and other partners have supported the trademarking initiative as a way to pass down more of the value of coffee sales to poor producers who typically receive a tiny percentage of final sale price, and struggle to make a living.
On February 15 Starbucks announced initiatives to benefit coffee farmers in Ethiopia including funding for a quality improvement project and increased coffee purchases in East Africa. While the additional purchases and support are beneficial, these initiatives fail to address the fundamental rights issue at hand. What the Ethiopians have asked coffee roasters to do is recognize Ethiopia's right to control and share in the value of the country's specialty coffee names through trademarks.
"As a market leader, Starbucks should take concrete steps that the Ethiopian government has called for, including reaching an agreement that recognizes Ethiopia's legal ownership of its coffee names," continued Petchers.
]]>"While Oxfam welcomes critical new investments in nutrition, conservation and renewable energy, the Farm Bill approved by the Senate Agriculture Committee today failed to reform our unfair and broken system of commodity subsidies that undercut farmers and rural economies at home and abroad. Unless the rest of the Senate intervenes, our taxpayer dollars will continue to encourage excess production, reduce world market prices and undermine the livelihoods of millions of small farmers around the world.
"Cotton subsidies maintained by the Agriculture Committee are especially troubling, with just 12,000 farms receiving up to three billion dollars in subsidies annually. These subsidies have a devastating effect on poor cotton farmers around the world. Failure to reform these trade-distorting subsidies will mean that those who don’t need subsidies in the United States continue to benefit at the taxpayers’ expense while those who need the most help—the 10 million people in West Africa for whom cotton is their only source of income—suffer more. Cotton is often the only source of cash income for these families, most of them living on less than $1 a day.
"Not only is this unfair, it is in violation of existing trade rules. Just last week, the WTO confirmed that the US hasn't done enough to reform its cotton subsidies in a longstanding dispute with Brazil. Most shockingly, the Committee bill reinstates a new version of the contentious Step 2 export subsidy that was done away with by the last Congress. Failure to reform our cotton program leaves our agriculture and other sectors vulnerable to significant retaliation from our trade partners and undermines American farmers' access critical to overseas markets.
"While doing little to nothing to address the needs of the global poor, Chairman Harkin and the members of the Agriculture Committee did make incremental improvements to address inequities faced by farmers of color here at home. This bill would provide a host of critical provisions beneficial to socially-disadvantaged producers—though more work needs to be done to ensure that the funding for these provisions is mandatory.
"Oxfam commends Senator Lugar for standing bravely against the status quo during the Committee mark-up by offering an amendment to require corrective action for any commodity program found in violation of WTO rules. Senator Lugar withdrew his amendment when Chairman Harkin offered to address the issue in his manager’s amendment. Though a good first step, the Senate must be prepared to address the issue on the Senate floor. Failure to do so will continue this gross inequity while endangering the future of other US trade agreements. We hope that the full Senate is prepared to lead where others have failed thus far."
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