Trade and Development – updates

I’ve been updating some trade and development resources this week. I’ve organised what I’ve found into ‘arguments for and against‘ trade promoting development.

For now, I mainly focus on Free Trade.

Evidence for Trade promoting development

The World Bank is historically in favour of Free Trade. To quote from its website (last updated in 2020):

“Recent research shows that trade liberalization increases economic growth by an average by 1.0 to 1.5 percentage points, resulting in 10 to 20 percent higher income after a decade. Trade has increased incomes by 24 percent globally since 1990, and 50 percent for the poorest 40 percent of the population. As a result, since 1990, over one billion people have moved out of poverty because of economic growth underpinned by better trade practices.”

One of the World Bank’s most recent reports (2020) is on ‘ Women and Trade – the role of Trade in promoting women’s equality‘ which focuses on how empowering work generated by trade has been for women globally.

This is very much in line with older reports published by the The World Bank such as The role of trade in ending poverty (2015). There is also an accessible video which accompanies this:

The World Trade Organisation -‘The Case for Free Trade‘ – it’s always worth having a look at some of the most recent articles from the WTO on trade. The WTO is a prominent global institution which encourages governments to adopt policies which promote free trade

The World Trade Organisation – The World Trade Report 2020 – Government Policies to Promote Innovation in the Digital Age – This report looks at how the digital knowledge economy has become an increasingly important sector of the Global Economy. It suggests that countries need to encourage firms to engage in research and development and make it easy for innovative knowledge to be shared across countries, and mentions GATS and TRIPS as two policies which foster this. It also mentions that governments can help by encouraging STEM education.

Evidence against Free Trade promoting development

The video below from DW documentaries is called ‘The Deceptive Promise of Free Trade, from 2018….

It looks at how there is a double standard in trade rules – countries in the EU impose tariffs on products imported from China to protect their economies while they make African countries sign free trade agreements with them that prevent them from imposing tariffs on EU exports, which harms farmers in African countries.

Also from DW documentaries, and also from 2018, the documentary below is more specific – focussing on how EU policies harm African countries:

The above documentary focuses on how subsidies to EU farmers allow them to export grain to African countries which ends up being cheaper than locally produced grain – this prevents aid working for development!

Why Europe needs to rethink its trade deals with Africa – some more academic research covering similar material to what’s in the above two documentaries.

This Amnesty International Report focuses on how Shell’s extraction of oil in Nigeria has not worked to promote development in that country.

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