Isn’t “free trade” good for the poor?
A. When conducted fairly, trade can be a tool for economic development. But trade can also be a destructive force when organized inappropriately. Recent experience with trade liberalization has not been favourable to the poor. The argument for free trade is frequently expressed as “A rising tide lifts all boats.” But the United Nations Development Program (UNDP) has found that some boats “are more seaworthy than others. The yachts and ocean liners are indeed rising in response to new opportunities, but the rafts and rowboats are taking on water —— some are sinking fast.” The UNDP reports that 70% of the gains from the last round of multilateral trade liberalization will go to developed countries and most of the rest to the larger export-oriented developing countries. In contrast, the 47 poorest, least developed countries will lose about US$3 billion over five years due to lost export opportunities and rising import costs especially for food.
