Bob C. Ezumah, an international trade expert is a senior fellow at The PuLSE Institute, where his work examines the wider implications of trade policies, and how they handicap the fight against poverty. He is a former Export Promotion and Business Development Manager with the United States Agency for International Development (USAID) NEXTT Project, and currently Logistics Manager at GEA Systems North America (GEA Group).
By Bob C. Ezumah
Just like other sectors of the American economy, the agricultural sector has not been immune from the devastating effects of the ongoing COVID-19 pandemic. So, farmers in Michigan, and other states have been feeling the brunt, so much so that a good number of them are struggling to keep their long-running businesses afloat. Yes, farmers are among the many that have joined the ranks of the poor, and that’s unfortunate.
And as we move toward a historic general election, one is bewildered that little or nothing is being said about trade policy and its impact on livelihoods in our communities. If we get trade right, we can get many communities right. Many around us depend directly or indirectly on trade, and we can’t afford to ignore their concerns and challenges.
Last year, heavy rains and the resultant flooding severely affected many Michigan farms. Then COVID-19 hit us hard this year, and added salt to injury, thus making life more difficult for farmers – who are our friends, relatives and neighbors.
But as long as life remains in the human society, people will produce, distribute, market, sell and consume (and hopefully recycle). Doing so creates jobs. Doing so creates wealth.
Are those jobs stable and rewarding? And is the wealth exclusive to a few or are there ladders of opportunity for the average Rick and Rachel? Those are very important questions that demand thoughtful answers.
Years ago, I consciously pitched my tent with international trade because I believed – and still do – that it offers great opportunity for people to not only enjoy quality goods and services but also to create wealth and fight poverty and misery. That’s why I am still involved.
According to the World Trade Organization (WTO), “Global trade has contributed strongly to reducing poverty but important challenges remain in making trade work for the poorest, and amid these shifts in the global economy, the world still faces a great challenge in ending extreme poverty and improving prospects for the poorest.”
Sometime in May this year, Roberto Azevedo, Director General of the WTO, made a surprise announcement that he would be stepping down before the expiration of his tenure as head of the organization. Since this sudden announcement, member states of the WTO have scrambled to put forward their preferred candidates for this position. There are now eight candidates jostling for this position and on September 7, the second phase of the selection process will conclude.
What this means is that in a few months, the WTO will be making a very important decision, the choice of a director general who will lead the organization. You may be asking the question “why is this so important?” This decision is a crucial one as it will definitely determine the direction of the WTO and the future of global trade as we know it. The bigger question really is “what will be the future of global trade” under what I call the new WTO?
The leadership of the WTO should be an issue that needs to be of utmost concern and interest to all proponents of free and fair trade, and especially those who see it is a veritable tool for fighting poverty in countries from the United States to Indonesia and Ethiopia.
That is simply because its decisions have tremendous impact on how international trade is conducted and its effects on livelihoods. This is not the time to sit on the sidelines and complain, but rather the time to make our voices heard and demand for much-needed reforms that will make trade fairer for the common man and the less privileged. The time is now for the WTO to finally live up to its mandate and ensure that trade is used as an instrument to eradicate global poverty.
As I have long posited, “Trade if done right can lift many people out of poverty, but if done wrong can deepen and widen inequities.” I have the conviction that trade if truly done right can be a win-win situation instead of a winner takes all, as is mostly the case today, with buyers from developed nations determining the prices of raw materials from developing nations.
And in many international negotiations and transactions, ordinary workers are rarely at the table to protect their interest. It’s not uncommon knowledge that lobbyists are often the ones that shape and/or write the rules on their own terms. Do Washington DC lobbyists feel the pulse of ordinary farmers in Michigan’s Iron Mountain? Do they do real tours (not photo-ops) of farms in Benton Harbor? I don’t think so.
Farmers should have fair prices for their produce in justifiable consideration of the intense labor, hard work and sweat they put in. They should not be held hostage to commodity buyers who will want to buy their produce for peanuts and not at a fair market price.
In the same vein, it is only fair that factory workers earn a fair and living wage from the expensive products they help to manufacture on the factory floor. They toil day and night and produce items that are exported at huge profits to other countries.
Thus, my challenge to all the eight candidates vying for the WTO leadership is for each of them to, as a matter of urgency, release a statement and state categorically their agenda on fair trade and poverty eradication. I am also making a similar challenge to the presidential candidates of the two major political parties here in the United States to release a policy statement on their trade agenda and poverty alleviation plans.
In the words of Dr. Ngozi Okonjo-Iweala, one of the candidates vying to lead the WTO, “We must have a WTO that works for the benefit of all members regardless of size or level of economic development. Least Developed Countries (LDCs) and Small Vulnerable Economies (SVEs) should have opportunities to participate in regional and global supply chains to enhance their presence in the trading system.”
To achieve fair trade, she believes “We must be sensitive to the particular policy challenges that those countries face. A revamped trading system should offer opportunities for Micro Small and Medium Enterprises (MSMEs) to increase and diversify their market access, enabling them to generate employment and contribute to economic growth and sustainable development”. I agree.
Both developed and developing nations can expand their productive capabilities as well as rethink economic strategies that can lead to growth – one that emphasizes uplifting the living conditions and livelihoods of those in our communities who are saddled with the unfortunate burden of economic alienation and misery.
Trade is never a one-way traffic. Countries depend on one another for goods and services. Regional and global trade presents a meaningful path out of poverty if made truly and sustainably fair. But is there a will to achieve this, especially now that we are seeing a rise in trade protectionism and trade wars between major countries like the U.S. and China?
These trade wars have become a lightning rod in the global trade community, and many are concerned about the direction we are going as an interdependent global community.
Yet, some see fair trade through the lens of protectionism and tariff barriers. Data shows that such trade policies and practices can lead to job losses. Many a time, they hurt those they claim to help the most – the workers who are often struggling to make ends meet. I know that trade policies are more of an extension of a country’s foreign policy, but it should by no means be weaponized and used as an instrument of coercion and oppression. Global trade should not be seen as a zero-sum game with winners and losers but rather should be fair and just and should be a means of inclusiveness that will be an instrument of poverty eradication.
I have seen at close range where farmers have been uplifted from the shackles of poverty through fair exchange of their agricultural commodities for export. I have also witnessed where farmers have been milked dry by unscrupulous agricultural commodity buyers and other players in the value chain thereby keeping them in perpetual poverty. That’s bad and needs to be properly addressed.
We all should champion the cause for free and fair trade as both can be achieved in the interest of both the farmers, the middlemen and the consumers. The time is now. We all should be working with, and supporting local, national and international organizations like the WTO to play a key role in ensuring that trade is used as an instrument of economic liberation, prosperity and the improvement of people’s lives.