The era of colonialism is over. However, exploitative trade practices by First World countries against poor nations are still alive and kicking. Overly biased import policies by richer nations, who weave a complex web of tariffs and duties, set the tone of discrimination against Third World countries.
For instance, Bangladesh-made garments entering the US market are slapped with duties and taxes/tariffs that are in general 20 times higher than those that UK-made garments have to face. Similarly, imported Indian garments have to face import tariffs of around 19%, as compared to the 0-1% charge applicable on European and Japanese garment imports. Such discrimination debilitates the value additions made by producers belonging to poor countries. According to internal estimations of Brazil, its agricultural exports’ earning has reduced by more than $10 billion because of trade barriers in the West. For Mozambique, exports to EU are lower by $100 million a year because of restrictions that are almost equal to the total amount of financial aid it receives.
‘Free trade’, as advocated by WTO, is nothing but a myth. Richer nations, led by United States, spend a billion dollars a day in extending subsidies to their farmers. The figure is six times the amount of aid they provide to the poorer nations. These domestic subsidies extended by rich nations to their farmers work in two ways against poor nations. First, these subsidies act as export barriers for poor countries – as their generally low priced produce becomes relatively costlier in the export market. And second, the surplus produced in the rich nations, because of the protection and supportive subsidies, is dumped easily at lower prices in developing countries, thus putting the local producers in these poor nations out of business.
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For instance, Bangladesh-made garments entering the US market are slapped with duties and taxes/tariffs that are in general 20 times higher than those that UK-made garments have to face. Similarly, imported Indian garments have to face import tariffs of around 19%, as compared to the 0-1% charge applicable on European and Japanese garment imports. Such discrimination debilitates the value additions made by producers belonging to poor countries. According to internal estimations of Brazil, its agricultural exports’ earning has reduced by more than $10 billion because of trade barriers in the West. For Mozambique, exports to EU are lower by $100 million a year because of restrictions that are almost equal to the total amount of financial aid it receives.
‘Free trade’, as advocated by WTO, is nothing but a myth. Richer nations, led by United States, spend a billion dollars a day in extending subsidies to their farmers. The figure is six times the amount of aid they provide to the poorer nations. These domestic subsidies extended by rich nations to their farmers work in two ways against poor nations. First, these subsidies act as export barriers for poor countries – as their generally low priced produce becomes relatively costlier in the export market. And second, the surplus produced in the rich nations, because of the protection and supportive subsidies, is dumped easily at lower prices in developing countries, thus putting the local producers in these poor nations out of business.
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