End trade barriers to cut poverty

Roughly one-fifth of the world's population lives - or tries to - on less than one dollar a day. That is a crude measure but it translates into a daily grind of hunger, misery and disease, which no human being should have to endure.

Last September, at the United Nations millennium summit, world leaders resolved to "spare no effort" to free their fellow human beings "from the abject and dehumanising conditions of extreme poverty". Specifically, they pledged to halve the proportion of the world's people living in those conditions by 2015.

Probably no single change would make a greater contribution to fulfilling that pledge than fully opening the markets of prosperous countries to the goods produced by poor ones. At present, farmers in poor countries not only have to compete against subsidised food exports, they also face high import barriers.

In addition, the more value developing countries add to their products by processing them, the higher the tariffs they face. In Japan and the EU, for instance, fully processed food products face tariffs twice as high as those on products in the first stage of processing.

In effect, the already industrialised countries, while preaching the virtues of free and fair trade, practise protectionist policies that actively discourage poor countries from developing their own industries.

Yet even in these conditions developing countries' annual export earnings are more than $1,500 billion. Obviously, they could earn much more if the barriers were removed. The minimum net gain would be more than $100 billion a year - more than twice the amount of annual aid flows.

Over time, as producers adjusted to the new export opportunities, the gain could be much greater. And besides the direct value of export earnings, these opportunities would attract an increased flow of foreign direct investment (FDI). At present this is less than $200 billion a year and goes mainly to a few of the most successful developing countries.

The 49 least-developed countries (LDCs) - home to more than 10 per cent of the world's population - are missing out almost entirely on global trade and investment. Between them they receive only $12 billion in annual aid flows, only $25 billion in export earnings, and a paltry $5 billion in FDI.

In two months the UN will hold a conference in Brussels, devoted specifically to the problems of these countries. Market access will be at the top of the agenda.

I am delighted to see that the EU, which is hosting the Brussels conference, has taken the lead in responding to that call. By adopting the "everything but arms" initiative last week, it agreed to give full duty- and quota-free access to its markets for all products from the LDCs, other than weapons. To reach this decision, Europe's leaders had to overcome resistance from powerful producer lobbies within the EU. They also had to reassure African, Caribbean and Pacific countries, which at present enjoy preferential access to the EU market, that they would not suffer unduly from the concessions made to other LDCs.

Their decision shows that Europe really does want a fair international trade system, in which poor countries have a real chance to export their way out of poverty.

This should give all of us new confidence in the ability of the multilateral trade system, and the World Trade Organisation, to respond to the needs of all countries, not only the richest and most powerful. Of course, the EU's decision by itself will not abolish world poverty. Its direct economic impact will be quite small, since most LDCs already have relatively favourable access to the EU's market.

In addition, the LDCs have neither the surplus of exportable goods nor the production capacity to take immediate advantage of new trade opportunities.

But giving them market access is a crucial first step. I appeal to the other industrialised countries - starting with the US, Japan and Canada - to follow Europe's lead, without restrictive provisions or reservations.

Kofi Annan is secretary-general of the United Nations