"Free Trade” talks are not the solution to the economic crisis: “Free Trade” is one of the principal causes

Civil society groups and global social movements gathering at the UN summit on the global economic crisis have denounced rich industrialized countries’ insistence on pushing forward unbalanced trade talks, misnamed “free trade”, as likely to exacerbate an already serious economic and social crisis.

Members of the Our World Is Not For Sale network [OWINFS] noted that deregulation of financial services through the liberalization of trade worldwide has been a major cause of the current global financial crisis.

Yet news from internal negotiations of the United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development reveal that the European Union and the United States have insisted on pushing forward hitherto stalled and unbalanced World Trade Organization’s negotiations that will deepen liberalization of all sectors of the economy, and increase unequal competition worldwide.

“It was WTO liberalization of financial service providers and trading in risky financial products, that enabled unprecedented and uncontrolled buying and selling of securities and derivatives based on US sub-prime mortgages, which precipitated the crisis”* noted Myriam Van der Stichele of Dutch research institute SOMO and member of OWINFS.

“Yet the rich countries insistence on completing the Doha round of WTO negotiations will enforce even deeper liberalization and expansion of financial services. Since financial reforms are far from completed, this risks more bailouts of bankers and less public money for needed investment in job creation and conserving the environment.”

OWINFS calls for the final declaration of the UN to:

• Ensure that all countries, especially developing nations, retain the policy space they need to regulate their financial sectors and manage their economies in order to achieve their development goals and priorities.
• Remove from the WTO and all free trade agreements those mechanisms which compel countries, especially developing countries, to liberalize and deregulate their financial services and capital flows and which prevent countries to develop their economies.
• Strengthen the role of the UN in overall global economic governance and crisis resolution. Unlike the G-8 or the G-20, the UN is the most representative institution of all nation states and governments in the world today.

“When many countries in the South are suffering the effects of a crisis in the North, it is perverse to push for corporate trade measures that will deepen inequality,” says Elyzabeth Peredo Beltrán of Solon Foundation, Bolivia, member of the OWINFS network. “At a time of global crisis, we need more cooperation, not more competition. We need to start listening less to the voices of experts and more to the proposals from the people bearing the brunt of the crisis.”

Contact:

Nick Buxton (email: nick@tni.org or cel. 530 902 3772)

See background information on the connections between “free trade” and the financial crisis