SAN DIEGO, California — Poverty as a phenomenon is not merely an issue unto itself, but a multifaceted effect of the many inequalities and injustices of this world. Though it may be easy to shrug such a large scale phenomenon as unbeatable, there is hope in those who have survived it and in those who make it their mission to end global poverty. The Borgen Project spoke with Nick Dearden, director of Global Justice U.K. and one of those people who have worked tirelessly throughout their careers to make poverty a phenomenon of the past and highlight the deep rooted problems that keep people impoverished.
Dearden has spent his time with Global Justice U.K. analyzing and informing the public about the effects that global trade policies and tariffs have had on impoverished nations’ ability to fight poverty. The primary facet that Dearden brings up as critical to ending poverty is by allowing nations what he coins “policy space.” Essentially where nations and their governments are allowed the capacity to create regulations and policies of their own volition to better address their poverty rather than being made to prioritize the satisfaction of the global market (Dearden).
The Present Context of International Trade
The two biggest aspects of this lack of policy space is what Dearden refers to as the “step change” in policy during the 1980s and 1990s and the impact of “traditional trade liberalization.” For context, the current international body, which is primarily responsible for international trade relations, is the World Trade Organization (WTO) which began operating in 1995. Prior to the WTO there was a multilateral body called the General Agreement on Tariffs and Trade (GATT) founded in 1948.
Both the WTO and GATT functioned as the primary multilateral pacts for regulating trade and commerce between states, however as Nick Dearden points out, the WTO has additional functions and fundamental changes from the previous pact that make it primarily responsible for many of the policies which make it difficult to fight poverty today.
Differences Between GATT and WTO
Firstly the GATT received approval as a provisional agreement. Though it lasted for over 50 years, it was not a permanent multilateral agreement. By 1994 it had expired and a year later the WTO received approval. Beyond permanence, both agreements fundamentally differ with the scope of policy to which they cover, whereas the GATT covered the aspect of trade in goods and the WTO extends to trade in services and intellectual property, according to its website.
Though both entities can lay claim to being responsible for immense amounts of international trade and economic growth, Dearden posits that the fundamental change in policy ideology between GATT and WTO is chiefly responsible.
Philosophy of the WTO
Dearden points to the overall policy shift in the WTO’s approach to international trade as a means of fighting poverty by describing economic trade liberalization as an endgame to fighting poverty. Essentially, through the practice of getting rid of as many tariffs and other economic stipulations as possible from international trade, Dearden posits that citizens in impoverished communities and their governments have restrictions with the regulations they can enforce on incoming corporate and non-governmental organizations and the capital and material impact they have on their economies.
Its Impact on Fighting Poverty
Firstly through the “step change” in policy to economic liberalization Dearden notes that this also involves heavy tariff liberalization. This was an opportunity for more external sources of revenue for nations without restrictions and has also led to smaller impoverished nations having to compete against the less regulated influences of large corporations and entities.
This change in direction also allows those with the most influence and existing capital to be able to exert policies and programs in nations in need of economic stimulation with less incentive to adhere to reducing poverty.
As opposed to the GATT, where Dearden points to the more flexibility in the types of regulations, it could impose on incoming economic entities and better graft said regulations to the needs of its own people. However, this becomes muddied when the idea of economic liberalization has become the dominant multilateral means of trade.
Ironically, the lack of the ability of poor nations and its governments to enact regulations has made its people less free overall, as efforts to reduce poverty through the force of international markets and trade have limits to ensure the propulsion of the latter.
It has gotten to a point where even basic amenities and foodstuff, as Dearden addresses, are susceptible to the international market, which places those already in danger of food insecurity in a more precarious status.
Although the economic policy of liberalization has greatly impacted the way in which we fight poverty through international trade and economic stimulation, there is in fact a way in which a balance of free trade and national agency can be maintained to fight poverty. Most notably in what Dearden refers to as “policy space” or the capacity for governments to maintain regulatory balance and framework for economic growth that will more directly benefit their constituents.
For instance, dependence on international market demands can cause a nation to struggle to foster economic diversification to due reliance on a major export. For example, Nigeria relies mostly on oil exports comprising 89.1% of its total exports.
Dearden also points to the effect that this liberalization has had on countries’ response to COVID-19 and accessibility to vaccines. Most notably how nations have had to orient their responses to whether or not the global market can effectively distribute said vaccines whilst still creating a profit or market opportunity for more economic growth.
Why This Matters
When asked about one of the major events that revealed the importance of fighting poverty with a more critical lens to international trade, Dearden pointed to the impact of the COVID-19 pandemic and the immediate aftermath of both lack of vaccination access to impoverished nations and also the impact of commerce brought to a halt.
Bringing up how our chain of commerce has become so beholden to the markets that finance them that instances such as the infamous blockage at the Suez Canal can bring important trade to a halt. By making so much of our global trade systems dependent on satisfying the market interests and whims of the biggest contributors the chance to end poverty in disadvantaged nations becomes slimmer. However, with regulatory changes and immediate action by the global community, there is hope that poverty can be a thing of the past.
– Albert Vargas