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If you only read one thing from this blog . . .

By Michael Cebon | March 26, 2009

Maybe you should make it this report just published by the UK’s War on Want. Trading Away Our Jobs: How free trade threatens employment around the world is an incredibly valuable report, documenting in detail the way that free trade policies have systematically destroyed employment opportunities for people across the developing world, through use of case studies in Africa & Latin America.

The report is only 27 pages long, so if you have a change, please read through it.  Otherwise, here’s the main thrust, from the Executive Summary:

This report examines the empirical evidence of the impact of free trade agreements on jobs. Using studies and statistics collated here for the first time, the report shows how past trade liberalisations caused huge job losses in both Africa and Latin America, the two continents that bore the brunt of early experiments in structural adjustment and other free trade policies. Findings from those experiments reveal a pattern of deindustrialisation, job losses and falling wages whose impact continues to be felt to this day, condemning whole generations to unemployment and poverty and stifling hopes for sustainable development.

In sub-Saharan Africa, trade liberalisation led to job losses across a wide range of countries, including Kenya, Malawi, Côte d’Ivoire, Zimbabwe and Morocco. Zambia saw unemployment double as the formal sector lost tens of thousands of jobs. Nor were these short-term losses: even today the vast majority of Zambian workers are forced to eke out a living in the informal economy, and 95% do not earn enough to lift themselves and their families above the $2 a day poverty threshold. Industrial employment in Ghana fell by 17% during the first eight years of trade liberalisation reforms, and by 22% for women.

Latin America experienced a similar loss of industrial and manufacturing jobs as a result of trade liberalisation. Unemployment in Latin America increased from 7.6 million to 18.1 million over the 1990s, almost entirely through the loss of existing jobs. Trade liberalisation in Brazil alone reduced net employment by 2.7 million jobs between 1990 and 1997. In Mexico, the trade liberalisations which saw the rise of the maquila sector brought huge job losses in the agricultural and manufacturing sectors, as well as a catastrophic decline in the value of wages. In real terms, the minimum wage dropped to just one fifth of its 1976 value by 2000.

Despite this evidence of the impact of previous trade liberalisations, some politicians are still calling for the swift conclusion of the Doha round of negotiations at the World Trade Organisation (WTO). Yet the International Trade Union Confederation (ITUC) has calculated that millions of jobs are at risk in developing countries as a result of the new trade liberalisation which the Doha round would require. Even the EU’s own assessment predicts that a conclusion to the Doha round along the lines currently proposed will cause significant job losses across the agricultural, industrial and service sectors of the developing world.

. . .

Free trade is no answer to the current economic crisis. At a time when unemployment levels are already rising sharply as a result of the global recession, further trade liberalisation will only exacerbate the threat to jobs. The free market approach undermines the possibility of decent work and of achieving sustainable development. War on Want believes that states must retain the policy space and levers of control in order to govern markets, manage international trade and provide decent work for all.

Download the full Trading Away Our Jobs report here.

Topics: Bilateral FTAs, European Trade Policy, Global Economics, Globalisation & Work, WTO | 1 Comment »

One Response to “If you only read one thing from this blog . . .”

  1. Graham Douglas Says:
    March 27th, 2009 at 11:42 am

    Thank you for drawing attention to this important report.

    The Return on Investment(ROI)analysis used by organisations to justify this “free market” approach should be accompanied by a Value Network Analysis (VNA). The latter could well refute the “advantages” of the former for all to see.

    For more on VNA please see http://www.valuenetworks.com

    Could all interested in changing existing free trade approaches mount a concerted campaign in all countries to require VNA to be produced by all organisations using ROI to justify their actions?