'A footprint means pressing down and global means world, so 'global footprint' means pressing down on the world and we don't want to press too hard' (child's definition of a Global Footprint)
what is Global Learning? CoreKnowledge Key Skills Values and Attitudes what is sustainability? what about climate change?
what about climate change?

Put your best foot forward: the theory of free trade

child labourerSome countries are 'better' at producing certain types of product than others. They can produce the goods or services more cheaply, quickly or efficiently. They have workers with particular skills or they have the land, climate and resources that other countries lack. As a simple example, the UK does not have a climate suitable for growing bananas, and therefore needs to import these from a country which has the right conditions for growing them.

It seems to make sense then, for countries to specialise in producing the goods and services that they are best at and to trade these for things they are less good at producing or cannot produce at all. This is known as the principle of free trade.

Free trade trampling on the poor

boys ina boatWith each country specialising in what they are best at producing and selling, free trade should benefit all countries. But in fact, free trade has resulted in very unequally trade. The 48 poorest countries, home to 10 per cent of the world’s population, have seen their share of exports decline to less than half a percent of the world total in the last 20 years. The US and European countries, on the other hand, containing roughly the same number of people, accounts for nearly 50 per cent of world exports.

One of the reasons for this massive imbalance is the fact that the richer and more powerful countries grant subsidies to their own producers and protect themselves against cheaper imports by imposing tariffs and quotas. They also dump surplus produce on poorer countries, often at prices lower than it would cost farmers there to produce them.

capucinoIn theory, there is an organisation which should prevent poor countries being trampled on. The World Trade Organisation (WTO), which has 150 member nations, makes and enforces rules about international trade. The WTO is meant to help trade flow smoothly by solving disagreements about trade between different countries. However, critics of the WTO say that the rich countries have too much influence in the WTO and create rules of trade that are unfair on poorer countries. They also say the organisation has too much power compared with other international organisations. The decisions that it makes often take priority over agreements on the environment and international law, for example. For more information on the WTO see the BBC website.

Did you know?

There are powerful people walking the corridors of the WTO…

Powerful WTO members stand accused of bullying weaker ones into agreeing to unfair trade rules. The US has been known to threaten to withdraw aid to countries if they do not support what the US wants in terms of trade rules. And while each member country in theory has an equal vote, in practice a lot depends on the number of delegates countries can afford to send. For example, at the WTO summit in Hong Kong in 2005, European countries had a record-breaking 832 delegates, the US 356, Japan 229. Meanwhile 46 of the poorest countries had fewer than 10 delegates. 

Free trade trampling on the environment

Free trade can also be harmful to the environment. In the past, our fresh food was produced by local farmers. This was because fresh food is perishable and it could not be transported long distances without going off. But today, the transport of food by air, together with new methods of harvesting, storage and refrigeration means that the food sold in our shops comes from all over the world. The energy involved and carbon dioxide emitted in flying food all over the world means we have increased our trade footprint dramatically. 

Also free trade rules, imposed by the World Trade Organisation, make it increasingly difficult for small traders in poor countries to compete with large rich multinational companies, particularly when these companies are able to benefit from subsidies. 

Did you know?

Some countries have experienced dumping where farmers from rich countries flood their markets with cheap imports such as rice, tomatoes and chickens pushing prices even lower. An example is Ghana. When the government passed laws to protect its local rice growers from subsidised imports the IMF forced it to tear up the law; now the US provides 40% of Ghana’s rice which has destroyed many local farmers livelihoods. Why not find out more? Watch a short video to learn more about the problems facing rice farmers in Ghana due to unfair trade rules.