DEMAND 1: TRADE JUSTICE
Subsidies are also responsible for blocking developing countries’ attempts to increase their share of the global market. Subsidies in Europe and America are so high that they are able to sell products under the market rate, ruining any chance of unsubsidised products being competitive. Not only do they lose out on the world market, but it also means foreign goods can be imported into developing countries and sold more cheaply than locally produced goods, undercutting the market share in their own countries.
Why Trade Justice?
 Trade is a long-term plan that would reduce the need of developing countries for aid, and restore the dignity stolen by aid dependence. There are two broad components to this concept: the first is what developing countries can do themselves to facilitate both regional and global trade. This includes improved governance and stability, infrastructure, reduction of African trade barriers and investment in skills development.
The second is the policies and actions that can be taken by rich countries that form the Organisation of Economic Co-operation and Development (OECD). The MAKEPOVERTYHISTORY campaign is targeting OECD countries, thereby focusing on the second component. But it is important to acknowledge that actions to facilitate trade are not a favour received by a passive continent, but a component of a wider strategy to ensure African markets can be boosted to the point of being able to compete successfully — a strategy in which Africa has an active part.
You may have noticed that the previous paragraph focuses on Africa, leaving other developing country markets out. This is primarily because other countries, such as China and India, have made significant advances and economic growth in the last two decades; whereas the region of Africa (and to a certain extent, Latin America) has not.
African economies have, in fact, weakened. The share of developing countries in world trade has risen significantly over the ten years between 1990 and 2000, from 17% to 27%. However, the 1980s saw Africa with a 6% share, which declined until 2002 when Africa as a region had only 2%.
Trade Barriers
There is a great deal that developed countries can do to address this decline in Africa’s market share. Dismantling trade barriers is one of the primary ways to assist Africa to gain a greater share of the export market. Trade barriers can come in many forms; a common one is the imposition of quotas.
 The EU has limits on the quantity of produce that can be imported in certain categories. Sugar imports, for example, are so limited that it is estimated to cost Mozambique about NZ$172 million a year in lost exports. There is no real logic to this old-fashioned protectionism, especially as rich countries pressure developing countries to open their markets without the same protection.
Increased competition is known to improve quality of products and efficiency of production. It allowed developed countries the steep growth they enjoyed since the end of World War II. Blatantly hypocritical policies that require free trade with no barriers to European products in Africa, but allow protectionism and trade barriers to African products in Europe, effectively cripple African growth as surely as the slave trade did in the 1800s.
Subsidies
Subsidies are also responsible for blocking developing countries’ attempts to increase their share of the global market. Subsidies in Europe and America are so high that they are able to sell products under the market rate, ruining any chance of unsubsidised products being competitive. Not only do they lose out on the world market, but it also means foreign goods can be imported into developing countries and sold more cheaply than locally produced goods, undercutting the market share in their own countries.
 Johann Hari, in an article in the NZ Herald in 2003, projected that the US would give American farmers US$182.8 billion over the next decade, while African nations cannot afford to give agricultural subsidies at all. That means African goods are competing with American ones in domestic markets and international markets, but African goods are already US$182.8 billion behind. He also points out that Mexican corn growers have been bankrupted because subsidies mean US corn is sold at 20% below the market rate! It’s not just the US though, the EU has even higher subsidies, which result in a flood of subsidised goods into Africa and no chance for African goods on the global market.
Subsidies are not imposed for purely malicious reasons; they are a result of powerful farming lobby groups in Europe and the US. However there is evidence to suggest the climate of subsidies is not good for European and American farmers either. They are certainly not faring any better than NZ farmers who have not been heavily subsidised since the 1980s. As a result, Johann Hari claims, NZ farming is stronger because it is paying for itself. If subsidies were removed, American and European goods would then be sold at market prices, resulting in fair competition based on quality and efficiency.
Clare Short, the former British Secretary of State for Development, said this system of subsidies, tariffs and trade quotas is “like a conspiracy to keep Africa poor”. The Commission for Africa slams the system, saying it is “disgraceful protectionism” which relies on subsidies and trade barriers which are “absolutely unacceptable; they are politically antiquated, economically illiterate, environmentally destructive and ethically indefensible”. Seems like some good reasons to get them changed.
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