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Summary: As trade conditions in developing countries come under discussion at the WTO meetings this week, a timely new policy brief from Save the Children UK’s Young Lives project examines the impacts of trade liberalisation on poor children.
Although issues related to children, particularly children’s wellbeing, children’s rights and child poverty are marginalised from debates on the consequences of globalisation and trade liberalisation, these processes are likely to have a major impact on the lives of poor children and their families. It is especially important to recognise this because the international community emphasises trade liberalisation as a tool for poverty reduction. One point of agreement in the 2005 UN World Summit was that: "A universal, rule-based, open, non-discriminatory and equitable multilateral trading system, as well as meaningful trade liberalisation, can substantially stimulate development worldwide, benefiting countries at all stages of development. In that regard, we reaffirm our commitment to trade liberalisation and to ensure that trade plays its full part in promoting economic growth, employment and development for all". (Resolution adopted by the General Assembly, 24 October 2005) However, trade liberalisation does not generate homogenous benefits to the whole population, and its effects on poverty reduction are not always experienced in the short term. Thus, government policy must pay specific attention to these differential impacts in order to mitigate the inequities that trade liberalisation is likely to exacerbate in developing countries. The effects that structural policies, like trade liberalisation, have on children, need to be traced from the changes they generate on macro economic variables, such as consumer prices, through to individual household livelihoods – and the complexity of differential intra-household effects. Such analysis is important for policy making which may involve compensating for any negative impacts or harnessing the benefits liberalisation to improve the conditions of children living in poverty. The impact of trade liberalisation on children is likely to vary between: Given that children comprise a significant proportion of the population in developing countries where children are overly represented among the poor, any discussion of the social impacts of trade must be approached from a child-sensitive perspective. Additionally, there are likely to be important differences in the impact of trade liberalisation amongst developing countries, according to their level of market integration, relative terms of trade and bargaining power in the world economy, composition of their economies, and the degree of comparative advantage in different sectors. This brief looks first at the general ways in which trade liberalisation can impact on children. It then discusses findings from Young Lives quantitative and qualitative research in Peru and Ethiopia to verify how these impacts play out in practice. It concludes by considering the policy implication of these findings.