Trade

“God intended the earth and everything in it for the use of all human beings and peoples. Thus under the leadership of justice and in the company of charity, created goods should flow fairly to all. All other rights, including the rights of property and free trade, are to be subordinated to this principle…”.  
Pope Paul IV, Populorum Progressio, 22, March 22, 1967

Caritas and Trade

Caritas considers trade in terms of its contribution to the dignity and human rights of all people. This includes people's economic, cultural and social rights, particularly for the poorest and most vulnerable people.

Caritas Aotearoa New Zealand advocates that:

• Human freedom involves much more than economic freedom. People are not free if they do not have access to safe food and water, to health care, to education, to a sustainable livelihood and to a healthy environment.
  
• International trade must be placed at the service of people – it must contribute to human development of people and their communities.
  
• International trade must benefit the poorest and most vulnerable. Trade should therefore contribute to a more equitable distribution of wealth and income between and within countries.
  
• Poor countries and poor people have a right to an equal voice and participation in determining trade policy.
  
• There is a duty on the part of the wealthy nations, to ensure that trade relations assist sustainable development and enable poorer nations to share in the earth's goodness.

Trade Justice

• Developing countries have an obligation to ensure that all their people have access to safe food and a right to protect local food producers.
  
• Developing countries have a right to choose to protect their domestic and locally owned industries.
  
• Rich countries must cease their heavy subsidisation of domestic agriculture and open their markets to the products of developing countries. 
  
• Both the trade rules and the way in which they are negotiated must be reformed to ensure that trade rules are fair and protect the most vulnerable, and are negotiated free of domination by those with more resources, wealth or power.
  
• Developing countries should be supported to undertake research, prepare policy and positions, and participate to an equal level in trade negotiations.
  
• International agreements on free trade in services should clearly exempt essential services such as health, education, water and sanitation and should not restrict the ability of governments to regulate services in the interests of the common good.
  
• Liberalisation of trade and investment must cease to be a condition imposed on poor countries in exchange for relief of unsustainable debts.
  
• People's rights to health through the import of affordable generic medicines must take priority over the intellectual property claims of pharmaceutical companies.

What should New Zealand do?

Caritas believes the New Zealand Government should clearly differentiate between the national interests of our country, and the interests of poor countries:

• New Zealand should become a strong advocate for a “development box” in trade negotiations, which provides for developing countries to protect their markets food security and the livelihoods of the poor, or to foster employment-rich industries. 
  
• New Zealand should support special and differential treatment linked to countries achievement of the Millennium Development Goals.

Fair Trade

'Freedom of trade is fair only if it is subject to the demands of social justice.'
Paul VI, Populorum Progressio, 1967

Fair Trade is trade based on the principles of participation and solidarity. Fair Trade puts people first, supporting much more than the economic aspects of people's lives.

“Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers - especially in the South. Fair Trade organisations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.
Fair Trade's strategic intent is:

• deliberately to work with marginalised producers and workers in order to help them move from a position of vulnerability to security and economic self-sufficiency
• to empower producers and workers as stakeholders in their own organisations
• actively to play a wider role in the global arena to achieve greater equity in international trade.”  FINE, (the informal umbrella group of the four main European Fair Trade networks).

The Vatican 's representative at the United Nations told the UN on 17 October 2006 that, "The achievement of greater justice through fair trade continues to be a major concern of the Holy See."

The Papal Nuncio issued the statement during a committee meeting on international trade and development, and urged participants in the Doha round of trade talks to renew their commitment to using trade to serve the poor.  Click here to read his statement.

Be part of the solution!

• As a consumer, you have purchasing power. Try to buy fair trade products, and ask your local supermarket to stock fair trade products such as coffee, tea, chocolate, rice, and sugar.
  
• Ask your parish to buy fair trade coffee, tea and sugar. Taste the difference!
  
• Write to the Minister for Trade Negotiations, Hon Phil Goff, asking him to ensure that the liberalisation of trade and investment must cease to be a condition imposed on poor countries in exchange for relief of unsustainable debts.
  
• Learn more about the issues – support material for teachers.

“Concern for the poor must be translated at all levels in to concrete actions:
- Reform of  the international trade system
- Reform of the world's monetary and financial system.”
Sollicitudo Rei Socialis 43, 1987

 Useful Links

Council for International Development

Ministry of Foreign Affairs and Trade

World Trade Organisation

Key Terms

Dumping
Releasing a large amount of surplus production onto the international market at a low price simply to get rid of it.  Dumping has been regular due to the large surplus production resulting from rich country subsidies. It is very harmful as it lowers the price dramatically and can put many farmers out of business. 

Free-trade 
When countries trade with each other without tariffs or restrictions. 

GATT 
General Agreement on Trade and Tariffs: A series of free-trade negotiations which were the main forum for international trade liberalisation up to 1995. 

Generics 
Generic drugs are medicines that have been copied and produced by a company in a country which does not own the patent to that drug.  Generics can be produced cheaply as there are no royalties to pay.

Liberalisation 
Meaning “freeing up”, when used in trade circles it means the process of reducing barriers to trade, such as subsidies and tariffs which protect domestic producers.

Patent 
A government authority that gives an individual or organisation sole right to make or sell an invention, or to charge royalties to others who wish to make the invention.

Protection 
Trade protection is the practice of protecting home industries through tariffs, subsidies and quotas.

Quota
A limit on the amount of a particular type of goods which may be permitted into a country. 

Subsidies 
Giving producers, such as farmers, money to help them.  Generally only wealthy countries can afford to do this and that puts farmers in poorer countries at a disadvantage.

Tariffs 
Tariffs are taxes put on goods coming in to a country (imports). This makes it more difficult for other countries to compete. 

World Trade Organisation
This is an international organisation set up in 1995 in which member countries negotiate trade rules. It was set up “to help producers of goods and services, exporters, and importers conduct their business.”  Officially all countries have an equal voice, but in reality the rich countries hold most of the power.