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Summary: In a recent report, released a week before the World Trade Organisation ministerial opened in Hong Kong, the international development agency ActionAid warned that developing countries will be trapped in poverty if they are denied the right to protect their economies against international competition.
Poor countries have right to bar trade invaders, ActionAid tells WTO [LONDON, 7 December 2005] - The report 'TRADE INVADERS: the WTO and Developing Countries' Right to Protect' looks at the downside of free trade policies and economic liberalisation. ActionAid's case studies - from Brazil, the Gambia, India, Nigeria, Pakistan and South Africa - describe how, time after time, farmers have been ruined and factories closed down as cheap goods from abroad flooded in after trade barriers were lifted. The removal of tariffs on textile imports has forced 20 factories in Nigeria to close with the loss of over 16,000 jobs. A further 18 factories are threatened with closure. Since 1998, almost two-thirds of jobs in the sector have been lost. In the Gambia, cheap imports of chicken, eggs, milk and rice have flooded the market, depressing prices and putting many local producers out of business. "Developing countries are facing an invasion. These stories are a warning of what might happen if rich countries get their way at the World Trade Organisation Hong Kong ministerial later this month," said Aftab Alam Khan, head of ActionAid's trade justice campaign. The report asserts that poor countries have the right to protect the small-scale farms and developing industries on which millions depend for their daily livelihoods and their economic future. It argues that today's rich countries, and the newly industrialised countries of Asia, were able to protect their industries at crucial stages in their development. All sectors of developing economies, including agriculture, manufacturing and services, are at risk. In the WTO agriculture talks, developing countries are battling for the right to exempt vital food crops (Special Products) from tariff reductions, and for a mechanism to deal with import surges of cheap agricultural products. In the negotiations on non-agricultural market access (NAMA), current proposals would compel developing countries to cap or reduce tariffs drastically on industrial imports. In the General Agreement on Trade in Services talks, developing countries are under pressure to open their service sectors - even the most basic services such as education, health and water - to international competition. ActionAid says that developing countries should be exempt from further liberalisation unless they themselves choose it. In a foreword ActionAid International's chief executive, Ramesh Singh, writes: "We believe that developing countries should have the right to protect their 'policy space' in the multilateral trading system so that they can nurture their agriculture, industrial and service sectors in any way they deem appropriate, just as today's industrialised countries did when they were developing."