Argument: Trade liberalization has been costly to Africa

Issue Report: Free trade


  • Christian Aid – “Trade liberalisation has cost sub-Saharan Africa US$272 billion over the past 20 years. Had they not been forced to liberalise as the price of aid, loans and debt relief, sub-Saharan African countries would have had enough extra income to wipe out their debts and have sufficient left over to pay for every child to be vaccinated and go to school.”[1]
  • Trade liberalisation statistics” A World Bank study found that implementing Uruguay Round agreements on various things can cost more than a year’s development budget for the poorest countries. (Yves Bertholet, United Nations Coordinator of Regional Development, 1999)The latest round of trade talks has cost sub-Saharan Africa an estimated US$600 million per year. This could be why in June 1999, 30 African countries signed a declaration against new trade agreements. This could be why, also, developing nations used the opportunity of the Seattle protests to voice their opposition to WTO trade talks. (“Africa Recovery”, United Nations, 1999)”
  • Trade liberalisation statistics“Trade liberalization is negatively correlated with income growth among the poorest 40 per cent of the population, but positively correlated with income growth among higher income groups. In other words, it helps the rich get richer and the poor get poorer. (Lundberg and Squire, Inequality and Growth; Lessons for Policy, World Bank 1999, Chapter 3.) At the start of the 19th Century, the ratio of real incomes per head between the world’s richest and poorest countries was three to one. By 1900, it was 10 to one. By 2000, it has risen to 60 to one ($29,000 to $500). (The Assessment: The Twentieth Century Achievements, Failures, Lessons, Angus Maddison, Oxford Review of Economic Policy, winter 1999, cited in Martin Wolf FT 26/1/2000)”