Developing economies – barriers to trade

In teaching my AS level class Unit 4 -Trade – of the CIE course I have often used the Black Gold DVD which shows some good examples of barriers to trade. The part of the DVD that is particularly relevant is at the World Trade Organisation (WTO) talks in Cancun, Mexico in 2003.

In countries such as Ethiopia, small coffee producers have suffered as a result of the WTO. The International Monetary Fund (IMF) and the World Bank, established to facilitate global trade and regulate an international monetary system, have privatised public businesses and removed restrictions on foreign ownership in many developing countries who sign the IMF agreements in order to prevent default on international loans. Black Gold – The Economics of Coffee

Furthermore, as the farming sector in developed countries continues to get government subsidies – $300bn pre year – the IMF insisted that those developing countries receiving IMF aid had to stop any assistance to their own farmers. One wonders how these countries are going to achieve any sort of growth as subsidies wipes out the ability of developing countries competing on the international market. At the WTO in Cancun, ministers from across Africa packed out the conference centre calling for an end to subsidies. As Sam Mpsau the Minister of Commerce and Industry in Malawi stated:

“we would like the world trading system to be able to help us stand on our own two feet. Trade is more important to us than aid. We cannot live on aid forever”.

A 1% increase in the continent’s share of world trade would in itself generate $70 billion per year – five times more than what the continent now receives in aid.

Below is a trailer to the movie. Well worth getting.

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