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Two-thirds of all people surviving on less than $1 a day live and work
in rural areas, and they sale of natural products for both their income
and their food. The markets in which they operate, their livelihood and
their prospects for escaping poverty are directly affected by the rules
governing agricultural trade.
More than aid, trade has the potential to increase the share of the world's
poorest countries and people in global prosperity. However, structural
inequalities have persisted and in some cases widened. The world's highest
trade barriers are erected against some of its poorest countries: on average
the trade barriers faced by developing countries exporting to rich countries
are three to four times higher than those faced by rich countries when
they trade with each other.
Also in the last round of world trade negotiations rich
countries promised to cut agricultural subsidies. Since then, they have
increased them. They now spend just over $1 billion a year on aid for
agriculture in poor countries, and just under $1 billion a day subsidizing
agricultural overproduction at home - a less appropriate ordering of priorities
is difficult to imagine. To make matters worse, rich countries' subsidies are
destroying the markets on which smallholders in poor countries depend, driving
down the prices they receive and denying them a fair share in the benefits of
world trade.
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Furthermore, it is often the higher value-added goods
that face the highest barriers. A Chilean tomato exporter faces a U.S. tariff of
2.2% on exports of fresh tomatoes. But the tariff rises to 8.7% if producers dry
and pack the tomatoes and to 11.6% if they process the tomatoes into sauce. This
additional tax hampers efforts to move into higher value-added activities that
would pay better wages and improve the economic security of workers. Such
policies indicate the chasm between rich countries' rhetoric on trade
liberalization and their actions, with far-reaching impacts on the livelihoods,
incomes and dignity of poor people in the least developed countries.
An opportunity to make the markets of all countries more
accessible to exports from the developing world is needed. A recent study has
estimated that full elimination of agricultural protection and production
subsidies in rich countries would increase annual rural income in low - and
middle-income countries by about $60 billion, or 6 percent - more than worldwide
aid.
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