International Econ Commentary Article

Anti-trade backlash would hurt the world's most vulnerable people
Vancouver Sun
Published: Monday, August 13, 2007
The growth in international trade and the consequent increase in imports of tainted goods -- from E.coli-infected spinach from the United States to toxic lead-coated toys from China -- pose more than a health risk. They threaten to jeopardize support for a liberalized global trading regime that represents the only viable hope for many developing nations to raise their standards of living.

In the U.S., Democratic presidential hopefuls are attacking trade at every turn to appeal to the labour vote.

New York Senator Hillary Clinton has registered her opposition to a trade deal with South Korea and, more seriously for Canada, says the North American Free Trade Agreement "has hurt America." She wants to see "broad reform" in how the U.S. approaches trade. "I believe in smart trade, pro-American trade, trade that has labour and environmental standards, trade that's not a race to the bottom," Clinton told a forum in Chicago hosted by the AFL-CIO.

Former North Carolina senator John Edwards vowed to fight trade deals that don't benefit American workers. "While economists say that trade helps our economy over-all, we need to be honest about the fact that it does not help everyone," he told a crowd in Cedar Rapids, Iowa. "Globalization has helped stunt the growth in wages for American workers."

Other contenders, including Barack Obama, agreed that they would revise NAFTA. "Our trade agreements should not just be good for Wall Street, it should also be good for Main Street," Obama said.

Such mindless sloganeering is troubling coming from those who want to be the next U.S. president.

But the theme is striking a chord with many, including owners of dogs and cats killed or hurt by pet food laced with the poisonous chemical melamine and parents worried about toys coated in lead paint from China.

As CanWest News reported last week, Canadian food imports have grown nearly 22 per cent in the last decade. The U.S. accounted for $11.9 billion of the $19.2 billion imported by Canada from 195 countries last year, but substantial volume came from China ($756 million), Brazil ($607 million), Mexico ($599 million), the Philippines ($91 million), Malaysia ($66 million), Iran ($26.8 million) and Ghana ($24 million).

As little as 10 per cent of imported produce is examined by the Canadian Food Inspection Agency despite the fact that some source countries tend to have poor hygiene, low food safety standards and lax regulation. Meanwhile, Canadian farmers must abide by strict food safety rules and face frequent inspections.

The CFIA says it doesn't have the resources to inspect everything, that it would take an army to scrutinize a million entries of fresh produce a day. Yet an Ontario farmer reports that he has already had five visits from inspectors this year, raising questions about the deployment of federal inspection resources.

It is clear that the rapid growth in imports has not been matched by a corresponding restructuring of administrative services to facilitate it. Canadians and Americans have to be persuaded that the products for sale on grocery shelves, at toy shops and in the shopping mall are safe. Unless inspection systems are put in place that can offer that assurance, the advances in alleviating poverty in the developing world through trade will be put in jeopardy.

Politicians should not be misled by anti-trade propaganda. The evidence is irrefutable that trade creates wealth for nations and lifts people out of poverty. A study by Columbia University economics professor Xavier Sala-i-Martin estimated that there were between 250 million and 500 million fewer poor people in 2000 than there were in 1970. In a 2005 report, the Food and Agriculture Organization of the United Nations argued that a growing agricultural sector is crucial for sustainable poverty reduction.

An anti-trade backlash would be a calamity for the global economy and cause the greatest hardship to the most vulnerable citizens in the least prosperous countries.

It's up to industrialized nations to ensure the growth in imports that can enrich the populations of the developing world is not impeded by bureaucratic failure.


The issue in this article is that the US and now much of the world is reconsidering Free Trade Zones and starting to consider more protectionist measures due to the safety and contamination of goods that are being imported from other countries, mainly China. If the US and other more developed countries were to remove the free trade zones and start imposing tariffs in order to control the quality of goods then less developed countries that rely on trade with larger countries for much of their GDP will be severly affected because the new barriers to trade will create a serious damper on the amount of money that they earn and the poorer people in those LDEC's will be hurt the most because it is they who are the ones who rely the most on the trade of natural resources with other countries as their main source of income.