Introduction

Trade is one of the most powerful forces linking our lives, and a source of unprecedented wealth. Yet millions of the world's poorest people are being left behind. Increased prosperity has gone hand in hand with mass poverty. Already obscene inequalities between rich and poor are widening.  

World trade could be a powerful motor to reduce poverty, and support economic growth, but that potential is being lost. The problem is not that international trade is inherently opposed to the needs and interests of the poor, but that the rules that govern it are rigged in favour of the rich.

If Africa, East Asia, South Asia, and Latin America were each to increase their share of world exports by one per cent, the resulting gains in income could lift 128 million people out of poverty. In Africa alone, this would generate $70bn - approximately five times what the continent receives in aid.

In their rhetoric, governments of rich countries constantly stress their commitment to poverty reduction. Yet in practice rigged rules and double standards lock poor people out of the benefits of trade, closing the door to an escape route from poverty. For example:

Rich countries spend $1bn every day on agricultural subsidies. The resulting surpluses are dumped on world markets, undermining the livelihoods of millions of smallholder farmers in poor countries.

When developing countries export to rich-country markets, they face tariff barriers that are four times higher than those encountered by rich countries. Those barriers cost them $100bn a year - twice as much as they receive in aid.

• While rich countries keep their markets closed, poor countries have been pressurised by the International Monetary Fund and the World Bank to open their markets at breakneck speed, often with damaging consequences for poor communities.
  
• The international community has failed to address the problem of low and unstable commodity prices, which consign millions of people to poverty. Coffee prices, for example, have fallen by 70 per cent since 1997, costing exporters in developing countries $8bn in lost foreign-exchange earnings.
  
• Powerful transnational companies (TNCs) have been left free to engage in investment and employment practices which contribute to poverty and insecurity, constrained only by weak voluntary guidelines. In many countries, export-led success is built on the exploitation of women and girls.
  
• Many of the rules of the World Trade Organisation (WTO) on intellectual property, investment, and services protect the interests of rich countries and powerful TNCs, while imposing huge costs on developing countries. This bias raises fundamental questions about the legitimacy of the WTO.

Reform of world trade is only one of the requirements for ending the deep social injustices that pervade globalisation. Action is also needed to reduce inequalities in health, education, and the distribution of income and opportunity, including those inequalities that exist between women and men. However, world trade rules are a key part of the poverty problem; fundamental reforms are needed to make them part of the solution.

Oxfam's Campaign

Make Trade Fair aims to change world trade rules so that trade can make a real difference in the fight against global poverty. The campaign's main goals include:

• Ending the use of conditions attached to IMF-World Bank programmes which force poor countries to open their markets regardless of the impact on poor people.
  
• Improving market access for poor countries and ending the cycle of subsidised agricultural over-production and export dumping by rich countries. In addition, changing WTO rules so that developing countries can protect domestic food production.
  
• Creating a new international commodities institution to promote diversification and end over-supply in order to raise prices to levels consistent with a reasonable standard of living for producers, and changing corporate practices so that companies pay fair prices.
  
• Establishing new intellectual-property rules to ensure that poor countries are able to afford new technologies and basic medicines, and that farmers are able to save, exchange, and sell seeds.
  
• Prohibiting rules that force governments to liberalise or privatise basic services that are vital for poverty reduction.
  
• Enhancing the quality of private-sector investment and employment standards.
  
• Democratising the WTO to give poor countries a stronger voice.
  
• Changing national policies on health, education, and governance so that poor people can develop their capabilities, realise their potential, and participate in markets on more equitable terms.

The existing trade system is indefensible and unsustainable. No civilised community should be willing to tolerate the extremes of prosperity and poverty that are generated by current trade practices.

Large parts of the developing world are becoming enclaves of despair, increasingly marginalised and cut off from the rising wealth generated through trade. Shared prosperity cannot be built on such foundations. Like the economic forces that drive globalisation, the anger and social tensions that accompany vast inequalities in wealth and opportunity will not respect national borders. The instability that they will generate threatens us all. In today's globalised world, our lives are more inextricably linked than ever before, and so is our prosperity. As a global community, we sink or swim together.

Oxfam believes that change is possible. The international trading system is not a force of nature. It is a system of exchange, managed by rules and institutions that reflect political choices. Those choices can prioritise the interests of the weak and vulnerable, or the interests of the wealthy and powerful. Trade is reinforcing global poverty and inequality because the international trading system is managed to produce these outcomes.

The rules of the game reflect the power of vested interests - but concerted public campaigning can change them. As the international campaign to cancel the debts of poor countries demonstrated, public action can force the interests of the poor on to the international agenda. And it can achieve real gains for human development.

Ultimately, there is a clear choice to be made. We can choose to allow unfair trade rules to continue causing poverty and distress, and face the consequences, or we can change them. We can allow globalisation to continue working for the few, rather than the many, or we can forge a new model of inclusive globalisation, based on shared values and principles of social justice. The choice is ours. And the time to choose is now.

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