World Council of Churches

A worldwide fellowship of churches seeking unity, a common witness and Christian service

Just Trade

06 September 2006

Statement by the WCC Central Committee, Geneva, 30 August-6 September, 2006


The WCC has had a long-standing interest in the question of just trade. Churches

have participated in the sustained work of the Ecumenical Advocacy Alliance

(EAA), which embarked on a campaign (in 2002) on "Trade for People". EAA's

framework of action on trade underlines that: "The biblical standard for economic

activity, including the trade of goods and services, is justice, and taking the

side of the poor, fair payment, transparent relationships, no exploitation, and

respect for life, ensuring the care of widows, children and strangers." It concludes

that: "trade therefore must be an instrument of sustainable, participatory and just

community and communion."

The July 2006 breakdown of the Doha round of trade talks (which were begun

in 2001 in Doha) within the World Trade Organization (WTO), was a blow to

multilateral relationships in global trade. Multilateral institutions, such as the

WTO, were set up to sustain and enhance multilateral relationships and to carry

out common actions. But many of these institutions have, in recent times, been

undermined and rendered incapable of protecting common goals as the interests

of individual nation-states dominate such relationships. The WTO, as a multilateral

trade institution, is supposed to be a forum where sovereign states, big and

small, can come together in a democratic way to address trade-related problems

and seize opportunities to ensure trade is conducted with a view to raising standards

of living. From its inception, regrettably, the WTO suffered from the misuse

of power by the most influential countries. The collapse of the negotiations

for trade after five years of intense talks is the most recent challenge to multilateralism.

The breakdown of negotiations signifies that there will be more and more bilateral

trade arrangements in the future. Those who will be worst affected by bilateralism

will be the weaker developing countries, who will not be in a position to

exercise any kind of leverage and can therefore be exploited. A case in point are

the trade negotiations between the European Union and the ACP countries (in

Africa, the Caribbean and the Pacific) which should lead to Economic Partnership

Agreements (EPAs) - free trade arrangements - between the EU and six ACP

regions in 2008. In 2001, when the talks began, there was hope that the new set

of rules for international trade would benefit the people of the developing countries

- there was hope that smaller nations could participate in the prosperity

enjoyed thus far by a few developed nations. After generations of almost exclusively

providing primary products and resources to the industrialized world there

was hope that developing nations could move out of poverty by participating as

equals in trade between nations. These hopes, however, soon faded as the devel-

oped industrialized countries began to impose their terms and conditions through

the mechanisms of the WTO. The share of least developed countries in respect

of world exports steadily declined from 0.7% in 1985 to 0.4% in 2005. (WTO)

This is because trade conditions imposed on the poor have weakened the advantages

they could have enjoyed with the opening of trade. Governments, not only

in the developing world, are pressurized by transnational companies for concessions

in taxes, labour regulations and to delay the imposition of environmental

standards. Subsidies from governments to some sectors of the developed world

also threaten trade relations.

To take agriculture as an example: While a major share of the GDP of poor countries

is dependent on agriculture the reverse is the case in industrial countries,

yet negotiations in agriculture at the WTO are dominated by the minimal offers

made by rich countries, coupled with their aggressive demands on Non-Agricultural

Market Access (NAMA) and services. The developed countries also want to benefit

from agriculture despite the fact that they have a large share in non-agricultural

trade. Poor farmers in largely agrarian economies suffer from dumping and

other effects of unfair trade rules. Poor countries want a trade deal that helps to

eradicate poverty. According to the Food and Agriculture Organization, 800 million

people experience food shortages, while an additional 42 million suffer from

severe malnutrition. While annual global agricultural exports are valued at USD

500 billion, at least 15 million children die every year before reaching the age of

five from hunger and hunger-related diseases. There is sufficient food to meet the

needs of everyone, but it does not reach the poor and hungry since they are unable

to afford it due to unfair trade patterns and practices. The current global trading

system, with its imbalances, has failed to deliver on the promise of economic

growth and poverty eradication. It has, in fact, undermined food security for the

poor, thrown millions of peasants and workers out of employment and slowed

down industrial development in many poor countries.

The WCC central committee, when it met in Potsdam, Germany, in 2001, was

concerned about these developments and the worsening economic relations and

growing disparities between developed and developing nations. The Potsdam

central committee, therefore, called for the elaboration of the concept of just trade

as one of the central pillars of the Council's work on economic justice. Consequently,

churches all over the world have conducted critical assessments of trade agreements,

as well as worked on developing alternate proposals for just trade in consultation

with civil society groups and social movements.

During the last five years of WTO talks, the developed countries have consistently

opposed the proposals put forward by the developing countries. They have preferred

"Aid for Trade" or trade-related technical assistance to poor countries to

alleviate the short-term adjustment costs of opening up their markets and to facilitate

trade by addressing the lack of infrastructure and other "supply constraints".

Such aid, however, was unfairly conditioned on the acceptance of the Doha round's

liberalization agenda. This proposal falls far short of what churches and ecumeni-

cal partners have been advocating for in their campaign: "Trade for People - Not

People for Trade".

It was primarily the positions taken by the United States and the European Union,

in pursuance of their respective interests, which finally triggered the collapse of

this round of the WTO talks. Each blamed the other for not taking adequate

measures to remove support to their own farmers, considered by many developing

countries as one major cause for confrontation under the current system.

The collapse of the talks is a setback to poor countries that will now have to fend

for themselves in bilateral negotiations. While the talks may have collapsed and

multilateralism suffers a setback, the churches recognize that global trade is too

important to be put on the back-burner. The churches need to continue to equip

and empower each other to address their governments on the issue of justice in

global trade as it impacts on the lives of people.

Just trade requires the transformation of trade rules negotiated at the WTO, as

well as in other regional and bilateral agreements. All trade rules and agreements

must be built around the commitment to:

- protect and advance the interests of smaller, weaker and vulnerable states;

- encourage sustainable development and poverty eradication as defined by

the people themselves;

- give primacy to peoples' right to food, water, the necessities of life, and protect

the small producers to enable them to survive and thrive;

- abide by international norms and standards that guarantee fundamental

human rights;

- strengthen respect for creation with ecological standards that safeguard the

interests of future generations and the survival of the earth;

- ensure equitable and just distribution of resources for all.

Therefore, the central committee of the World Council of Churches, meeting in

Geneva, Switzerland, from 30 August to 6 September, 2006:

a) Affirms the theological basis for the commitment to uphold and promotejust trade: the profound option of our faith for the "least", the poor and theexcluded, and calls for continuation of theological and biblical reflectionson just trade;Calls on the churches to encourage their governments to continue workingfor a new multilateral trade mechanism, with a new set of multilateraltrade rules which are just and democratic;Calls for WTO reform on the basis of the criteria in paragraph 9, whichwould include transparent appeals processes and accountability rules forparties bound by WTO trade rulings,Encourages countries to engage in participatory trade negotiation processes,which will result in just trade that reduces poverty, promotes humanrights and protects the environment;

e)

f)

g)

h)

Encourages and supports the coordinated campaigns for just trade carried outthrough the initiatives of the Ecumenical Advocacy Alliance, churches andrelated organizations;Calls for dialogue and building of alliances for just trade among ecumenical,religious, economic and political actors and between the churches inthe North and the South;Expresses the need to link up strategically peasant movements, labour movements,women's and Indigenous Peoples movements to prepare and designalternate proposals for just trade through the World Social Forum and otheravenues;Promotes awareness-building of congregations on the impact of trade agreementsand policies, particularly on the lives of the people in the South,through education and ecumenical formation and through study and action.

b)

c)

d)