Oxfam slams bilateral trade deals

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Global charity Oxfam has launched a wide-ranging attack on the rise of bilateral and regional trade deals.

In its Signing Away The Future report, Oxfam claims that developed nations are using low-profile talks to sidestep their international trade obligations.

The comments come as the latest round of World Trade Organisation (WTO) talks have stalled and seem to be foundering.

Oxfam says more than 250 regional and bilateral deals now control more than 30% of total world trade.

Doha distraction

Separate and stand-alone trade deals are stacked against the developing nations, the charity said.

The most powerful economies "use these agreements to win concessions they are unable to obtain at the WTO, where developing countries can band together and hold out for more favourable rules", the charity said.

Countries are concerned that if they don't reach an agreement with the EU they will lose access to the European economy Amy Barry, Oxfam

Oxfam believes that while media attention is focused on high profile trade talks such as the WTO's latest Doha round, the European Union (EU) and US are resorting to a host of deals "negotiated largely behind closed doors".

The EU in particular has a number of potential trade deals under negotiation with dozens of states across Africa, the Middle East and Latin America.

Stacked odds

Oxfam cautions that these talks are not being conducted across a level playing field.

It believes that the group of nations currently negotiating Economic Partnership Agreements (EPAs) with the EU depend on the same European states for 40% of their exports, and are effectively hamstrung in trade talks.

The EU is engaged in a round of trade talks with former colonies across Africa, the Caribbean and the Pacific (ACP).

Amy Barry, Oxfam's trade spokesperson, said that the discussions are being conducted against a deadline of the end of this year, when existing preferential trade deals with former colonial powers will expire.

"These countries are concerned that if they don't reach an agreement with the EU they will lose access to the European economy," Ms Barry said.

Foreign views

Oxfam notes that the US is in the process of signing an Intellectual Property Agreement (IPA) with Colombia that it says will have the effect of increasing healthcare costs in the Latin American nation by $919m (£469m) by 2020.

Such IPAs can extend the patent protection afforded to drugs, thus increasing the price of prescription medicines.

The EU's Peter Mandelson is at the heart of trade negotiations

Oxfam cites the growing influence of economic liberalism, introduced under the banner of bilateral Free Trade Agreements (FTAs), as a vehicle for increasing the influence of multinationals.

It says the North American Free Trade Agreement (NAFTA) has skewed the Mexican banking system in favour of foreign ownership.

Mexico opened up financial services in 1993 in preparation for NAFTA. Oxfam maintains that this triggered a decline in lending to Mexican businesses while overseas ownership of the banking system rose to 85%.

Safety mechanism

Oxfam concedes that "trade and investment are essential for development" but stipulates its own series of commandments to redress economic imbalances.

The development charity wants all trade deals to exclude essential public services such as education and water provision from liberalisation clauses.

More controversially Oxfam calls for developing economies to be given the right to regulate the entry of foreign investors in order to control local employment standards.

According to Oxfam "South Africa and Thailand have walked away from negotiating FTAs with the US" due to proposed rules on public health and investment regulation.