Wrap up warm

Troubles never come singly

The havoc wreaked by the tsunami in the Indian Ocean on 26 December has taken attention almost completely away from another event which could have equally disastrous consequences for some countries in the area. This occurrence was of economic significance rather than a natural disaster, but it could also affect the employment and living standards of millions of people in the smaller Asian countries.

On 1 January of this year, all quotas on textile imports came to an end in member states of the World Trade Organisation. This system of preference had been in place for four decades, and over that period has been a boost to the economies of some of the poorer countries in the area. The philosophy behind the quotas was to give preferential treatment to less well-off states struggling to find export markets for their fledging manufacturing industries, as they tried to move away from subsistence agriculture. But moves towards free trade means the removal of barriers of this kind, and the protection which they provided has now gone. It is calculated that this will be particularly hard on Sri Lanka, which has suffered so badly in the tsunami. Until now, over 70% of this country's exports have been textile based. In Bangladesh the figure is as high as 80%. But China and India are now likely to make large inroads into lucrative markets such as the European Union. The WTO estimates that China's share of the US' textiles market will leap to 50%, from a previous figure of 16%. India's exports to the EU are likely to rise by 50%. Both India and China produce higher quality clothing at cheaper prices than their smaller and poorer neighbours. Many of those employed by the textile industries in countries such as Bangladesh and Sri Lanka are female workers who are unlikely to find any other source of income easily if their jobs disappear. There is as yet no evidence that economic planners at the WTO have addressed the consequences for smaller developing states of the removal of these preferential quotas.

A new dawn in world trade?

The response by the general public to the Indian Ocean disasters on Boxing Day was immediate and humbling.

Too often in the past the attitude of populations of the First World to natural disasters in poorer parts of the world has been to shrug the shoulders and concentrate on events nearer home. But this time the reaction was different. No doubt, in part this was due to the fact that so many holidaymakers from European countries in particular were involved, and scenes of despair and devastation were being diffused directly onto the television screens of the First World in the middle of their winter holiday break. Public opinion seems to have been mobilised by these events to bring pressure to bear on the political class to do something positive this time about Third World poverty, and a consensus may be emerging that this means fairer trade, which is not necessarily the same as free trade.

The Doha round is still on a knife-edge, with little more than expressions of intent geared to long timescales so far achieved. First World subsidy, dumping and protective tariffs needs to be ended rapidly. Gordon Brown's suggestion of a new version of Marshall Aid is an excellent step in the right direction. But what is needed is that when the devastated communities are rebuilt, secure employment is created based on open markets giving competitive prices not only for fishing produce, but also for the agricultural and manufacturing produce of the developing world as a whole.

Gavin McFarlane, Temple Chambers, Cardiff.