From: matus [matus@snet.net] Sent: Wednesday, July 31, 2002 12:27 AM To: matus@snet.net Subject: MFD List - American consumers help the developing world American consumers help the developing world ---------- Consumers for World Trade by staff "Did you know that you help the poor around the world every time you shop at your local discount store, food market or clothing store? How so you ask? American consumers help those striving to make a living in developing countries by buying products made in those countries." (07/17/02) http://www.cwt.org/news/articles/July2002/Developing.htm American Consumers Help the Developing World July 17, 2002 Did you know that you help the poor around the world every time you shop at your local discount store, food market or clothing store? How so you ask? American consumers help those striving to make a living in developing countries by buying products made in those countries. Americans assist struggling entrepreneurs and workers to improve their standard of living when we consume products they make. When we buy goods from a developing nation we support that country's economy, creating new jobs that provide opportunities for a better life. Critics of international trade claim that by buying goods made in developing countries with labor standards lower than our own, we support the exploitation of workers. This is simply not true. We must all remember that the people in these regions of the world live in extreme poverty where unemployment rates are astronomical and where annual income may be just a few dollars a year. Rather than exploit that poverty, Americans buying exports from those countries help to reduce poverty and improve standards of living, because factories making products for foreign markets always pay considerably higher than the minimum wage. Jobs in these factories are coveted, because they provide a middle-class living. Trade has boosted wages and living standards for people in developing countries. When a country participates in the global economy, it also participates in an exchange of ideas and gets access to new, better technologies. Thanks to increased trade the proportion of people living below the poverty line in the developing world decreased from 28 percent to 24 percent between 1987 and 1998. Many Asian countries have come up in the world due to international trade. In 1960 South Korea was as poor as India. Today its per capita income is twenty times higher than India's. While India has also made strides and has made its own contribution to the world economy its trading regime is considerably more closed than that of South Korea's and that's one difference. Remember that old adage: "give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime?" Well, when it comes to the issue of aiding the poorest countries, our government follows this adage through programs that are designed to promote trade instead of foreign aid. The idea is that if you provide a market for the products of a truly poor country, you do so much more for that country's economy and for its people than you can possibly do by directly providing foreign aid. Why? Because you help the country attract foreign investment to build factories and employ workers to make a real living. Providing access to our vast consumer market - you, the American Consumer-can be a key element in eliminating world poverty. Some of the key "trade not aid" programs that our government supports include: The African Growth and Opportunity Act (AGOA), which was passed in May 2000 to encourage American trade with the nations of sub-saharan Africa, arguably some of the poorest nations of the world. Under AGOA, African nations can export their goods to the U.S. free of restrictions such as tariffs and quotas. As a result, imports from Africa grew more quickly in 2001 than imports from Asia, Europe or Latin America. Some of the early statistics are heartening: In the first six months after AGOA went into effect, African exports to the United States went up 15 percent. One country, Madagascar, saw their exports to the United States jump 126 percent. Shipping lines had to increase the number of ships each month just to handle the increase in cargo from southern Africa to the American east coast. Madagascar quadrupled its exports of men's and boy's cotton shorts to the U.S. in the first year. Lesotho, a tiny country consisting mostly of subsistence farmers, doubled its manufacturing employment in the first year of AGOA. Textile plants have popped up all over Africa. Mali and Niger saw their clothing exports increase from $25 million to $50 million in a year. Textile and apparel trade, the largest export from Sub-Saharan Africa, increased 26 percent between March 2001 and March 2002. The Andean Trade Preferences Act (ATPA). This program provided some limited duty-free access for products from the Andean region of South America to provide an alternative source of employment and industry for this region-notorious for its drug trade. Andean countries have used this program to send flowers and vegetables to the U.S. market. Unfortunately, this program expired in 2000, but legislation is now included in the Omnibus trade bill to expand this program and to provide additional benefits for wearing apparel and footwear, similar to the benefits included in the African trade programs. The Generalized System of Preferences. The granddaddy of all "trade not aid" programs is GSP. This program, which has been around for almost thirty years provides duty-free access to our market for "non-import sensitive" products from lesser developed countries around the world. To qualify a country has to maintain certain labor rights and must have a per-capita income below a certain level. A wide range of products are imported under GSP - everything from wood products to consumer electronics. Unfortunately, GSP has also expired, but an extension is included in the Omnibus Trade Bill. So remember, the next time you pick up a product and see that it was made in Madagascar, Colombia, or Armenia that it most likely entered the United States without any border taxes under one of the three programs listed above. You can feel good about making that purchase. Not only did you get a break on the price because there were no duties, but you gave a helping hand to support jobs in some of the poorest areas of the world. www.matus1976.com - Article archives