In a packed room at the Ronald Reagan Building in Washington DC on Wednesday, The German Marshall Fund of the United States (GMF) and Modernizing Foreign Assistance Network (MFAN) hosted a presentation on “The Role of Trade in Promoting US Global Development Goals.”

Ritu Sharma, President/Founder of Women Thrive Worldwide and leading voice on international women’s issues and U.S. foreign policy, opened the event. Next to speak was the Honorable Jim Kolbe, Senior Transatlantic Fellow for GMF. Kolbe has served in the United States House of Representatives and has made significant contributions to the world of international development and trade. Kolbe touched on the importance of trade in promoting development before introducing featured speaker Ambassador Demetrios Marantis. Mr. Marantis serves as Deputy USTR (United States Trade Representative) and is responsible for US trade negotiations and enforcement in Asia and Africa.

Mr. Marantis explained that many people don’t realize that trade is an important piece of the puzzle when it comes to economic growth and poverty reduction. While access to new markets for poor countries is a significant part of accelerating and achieving development, trade is an essential component, too.

“We must explore ways to use trade to fuel future development,” Mr. Marantis remarked.

Similarly, Ms. Sharma said that “Foreign assistance is not enough to lift people out of poverty.” In order to achieve development goals, economic growth is needed through private sector investments, foreign direct investment, and trade.

The take-away message? The US can (and should) use trade to further the US Global Development Goals, and even reduce conflict throughout the world. We as ONE members have the power to influence the government to maximize the role the United States plays in achieving development. But in order to do this, we should recognize the significant role that trade policy plays in this process.

Learn more about the ways in which trade creates economic growth and opportunities for the world’s poor here.

-Jen Fraser

Apparently not, according to the new report from the World Trade Organisation (WTO) and the International Labour Organisation (ILO). The surge in global trade over the last two decades has failed to improve working conditions and living standards in many developing countries. Although trade has contributed to growth and development worldwide, many of the jobs created in developing countries have appeared in the informal sector. Informal sector jobs tend to be the most vulnerable, characterised by less job security, lower incomes and an absence of access to social benefits. Yet, in many African and South Asian countries, as much as 60 percent of the country’s labour force is employed by this sector. In turn, these vulnerable labour market conditions have prevented developing countries from fully benefiting from globalisation. The report warns that this situation is likely to worsen as a result of the global financial crisis.

What can we do about this? The WTO’s chief Pascal Lamy encourages putting in place proper domestic policies to create good jobs in developing countries. The report recommends a number of ways to make trade policies more closely aligned with job issues in developing countries, including better coordination between trade and labour policies, and implementing policies to encourage formalisation of employment. Rich country governments also need to support poorer country governments in doing so, and enhanced trade capacity building assistance is one way to do this.

You can read the report here.

Here at ONE, we often talk about the fact that Africa’s share of world trade, at around 3.5%, is the smallest of any region in the world. This is concerning because this means that African countries have not been able to reap the opportunities of global trade. Trade and investment could spur economic growth that could in turn help countries work their way out of poverty, but sub-Saharan African countries face some of the world’s greatest challenges in accessing local, regional, and global markets.

William Easterly, Professor of Economics at New York University, introduces a fascinating collection of graphics which illustrates just how scarce the trade links between Africa and the rest of the world is. You can read his blog here.

Trade ministers from rich and emerging nations are gathered in India for the second day of the two-day informal trade meeting, to make progress on the G20 commitment to conclude the Doha Development Agenda by the end of 2010. As the US Trade Representative Ron Kirk said before he left for India, this could be a “very important step” for their efforts to do so.

So are we finally close to a trade deal that would allow all countries, especially poor African countries, reap the benefits of trade, where they can work their way out of poverty as a result of new opportunities presented by the expansion of global trade? On the one hand, the economic crisis has renewed the political will for an early conclusion of the long-stalled Doha round and thus there is more scope today to achieve the “ambitious and balanced” WTO deal pledged in L’Aquila in July. On the other hand, we have heard these high-level Doha promises before-without any results.

If the Doha Development Round is to be completed by 2010, participants must ensure that the talks produce a deal that integrates poor African countries into the global trading system. Keeping Africa’s needs in the picture is the only way to achieve a truly global recovery — ONE recovery ONE world.

African countries continue to face multiple constraints to expanding trade. A Doha trade deal must effectively help African countries trade more among themselves and with the rest of the world. For a Doha deal to benefit Africa, it must include real reductions in agricultural subsidies in developed countries, improved market access for goods from African countries, a new financial commitment to aid-for-trade and allow countries to pursue trade policies that support development.

If this progress is not forthcoming through Doha, WTO members should develop a separate trade initiative for sub-Saharan Africa. This could be built on existing preference programmes such as the U.S. African Growth and Opportunity Act (AGOA) and the European Union’s Everything But Arms (EBA) programme. The package needs to be comprehensive, combining market access and effective trade capacity building. A sub-Saharan Africa wide programme would help prevent trade distortions between neighbouring African countries, and could promote regional trade.

The G-20leaders meeting in Pittsburgh later this month should consider how they could achieve harmonised and coordinated trade measures for Africa – this would go a long way towards achieving a Doha deal that really delivers for development.

-Mikiko Imai

You may have heard the news that the leaders of the most powerful developed and developing countries called for a conclusion of the World Trade Organisation (WTO)’s Doha Development Round by the end of 2010 last week at the G8 L’Aquila Summit in Italy. As trade diplomats negotiate towards a deal, they must make sure that poor countries, particularly in Africa, are integrated into the world trading system. By participating fully in the global economy, countries can earn sustainable resources through exports and ensure that their development concerns are prioritised. Prospects are not looking promising in this regard—a senior African agricultural economist, Mr. Abdoulaye Zonon, raised alarms that the current deal proposed at the WTO to cut cotton subsidies offers little hope to African countries as the proposed cuts apply to only a fraction of actual payments made to its farmers by the US government.

You can read the Reuters article on this here.

-Mikiko Imai

Prior to President Obama’s visit to Ghana, Divine Chocolate, a fair trade chocolate brand co-owned by Kuapa Kokoo Farmers Cooperative in Ghana, invited him to visit and see fair trade in action.

With a fifteen year record as a democratic farmer organization of 45,000 members, Kuapa demonstrates how a more equitable trading system can work and is an excellent example of cocoa farmers organized democratically to participate in shaping their own futures. It stands as a powerful example for other African producers, for industry initiatives and for policy makers.

While Obama didn’t make it to Kuapa, I was pleased that his speech to the Ghana parliament addressed two key ingredients for shaping a policy of fair and sustainable trade.

“Partnership must be grounded in mutual responsibility”

Because 70% of the world’s cocoa comes from West Africa, the fates of chocolate brands and cocoa growers are linked. A sustainable trade system must include a commitment to true partnership. Today the discussions about terms of trade – whether at the level of the International Cocoa Organization (ICCO) or discussions with government and industry regarding issues of child labor and the cocoa sector — are conducted largely without democratic representation of cocoa farmers. Companies and policy makers interested in fair trade must insist on a fair say for cocoa farmers inside institutions that impact their lives.

“Africa’s future is up to Africans.”

A system of fair trade encourages farmers to decide for themselves how to invest in their future. Right now there is an incredible opportunity to build the capacity of cocoa farmers to become players in the global market. For example, the Gates Foundation has funded a $40 million Cocoa Livelihoods Program in West Africa. A measure of its success should be how well cocoa farmers are prepared to become equal participants in shaping the terms of trade, not merely how well does it prepare farmers to produce better cocoa.

But forging a system of fair trade isn’t simply up to Africa or the Obama administration. It requires the participation of individuals like you and me as well. It demands that we let companies and politicians know that paying fair prices is the minimum that should be done. It requires that we value empowerment of African producers and we measure companies and policy makers against their efforts on this front. To learn more about these issues and how you can get involved, go to: www.allafrica.com and www.africaaction.org.

-Erin Gorman, CEO of Divine Chocolate

Last week, just before the G8 Summit in Italy, the second global review of Aid for Trade was held at the World Trade Organisation (WTO) in Geneva. Aid for Trade is an initiative that started in 2005 through the WTO framework in recognition that developing countries lack the basic infrastructure and capacity to take advantage of the market access opportunities resulting from trade negotiations — that in fact, changes in the international trading system have significant costs to developing countries — and that normal aid programmes have not been able to deal with these. The second global review aimed to evaluate the progress of the initiative and scrutinize how it is being implemented on the ground.

During the high level event, the UN Secretary-General Ban Ki-moon described aid for trade as “promising and life saving” for poor countries. At the same time, he expressed concern recently that the initiative will fall short by some $20 billion. WTO chief Pascal Lamy said that the global trading environment has worsened dramatically since the first review a year ago, and that the Aid for Trade initiative is “urgent and essential today.”

Despite the economic downturn, several donors responded positively to this call – Japan unveiled a new development initiative for trade under which it will provide $12 billion through bilateral assistance for trade-related projects over the next two years. Announcements of substantial commitments by the UK (£1 billion per year), the Netherlands (€550 million per year) and France (€850 million per year) were also welcomed.

The report, co-published by the WTO and OECD for this event, says the initiative has achieved remarkable progress in a short time: partner countries are mainstreaming trade in their development strategies and clarifying their needs and priorities; donors are improving aid for trade delivery and scaling up resources. In 2007, as was the case in 2006, aid for trade grew by more than 10% in real terms and total new commitments from bilateral and multilateral donors reached $25.4 billion, with an additional $27.3 billion in non-concessional trade-related financing. But the report warns that maintaining the momentum will be difficult in this current economic recession, and that the quantity and the quality of aid, including aid for trade, are now more important than ever for economic growth and human welfare.

-Mikiko Imai

United Nations Secretary-General Ban Ki-moon’s first meeting earlier this week with President Obama comes amidst a deepening global economic crisis. The two pledged a new era of international cooperation and the pointed to the work jointly to find solutions.

President Obama said:

We talked about the economic crisis and how that’s affecting not only developed countries, but very poor countries around the world, and the potential threat to food supplies if it continues to worsen, and the need for international coordination.

The UN Secretary-general, who has said we also need to be concerned not only with Wall Street or Main Street, but those who have no streets,” emphasized that:

Leaders of G20 should not lose sight of the challenges and plight of hundreds of hundreds of millions of poorest people of the developing countries who have been impacted by this economic crisis. The leaders of industrialized countries should keep their commitment on Millennium Development goals and official development assistance, and help developing countries overcome food security and also help them to adapt and mitigate climate change.

His visit comes on the heels of more bad news about the crisis. According to a World Bank study prepared for next Saturday’s meeting of the Group of 20 finance ministers and central bank governors in London:

The global economy is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential. World Bank forecasts show that global industrial production by the middle of 2009 could be as much as 15 percent lower than levels in 2008. World trade is on track in 2009 to record its largest decline in 80 years, with the sharpest losses in East Asia.

This is especially troubling for those least responsible for the crisis — the extreme poor. The study goes on to warn of financing shortfalls of anywhere between $270-700 billion as commodity prices continue to decline, global trade collapses, trade finance and private capital flows dry up and remittances drop.

And according to IMF Managing Director Dominique Strauss-Kahn, “The worst of the crisis is still to come,” specifically in Africa. The poorest countries lack the social safety nets to deal with the crisis and are becoming increasingly dependent on overseas development assistance.

Unfortunately even before the financial crisis hit, rich countries were falling short of their commitments by about $39 billion a year. At least in the U.S., the President’s budget (PDF) goes against the tide. It designated $51.7 billion for the State Department and other International Affairs Programs, a $4.5 billion increase from fiscal year 2009.

As the situation continues to spiral download, some people are looking to the April 2 G20 summit in London to provide a more pro-poor response. Both the UN Secretary-general and President Obama will participate in the G20 meeting.

-Anita Sharma, UN Millennium Campaign

Cadbury’s UK announced their intention this week to convert approximately 20% of their chocolate range to Fair trade, joining Divine Chocolate on a journey we started 10 years ago.

Seventy percent of the world’s cocoa comes from West Africa. Big chocolate companies such as Cadbury’s have been sourcing from the region for a century. While Ghana cocoa has developed a global reputation for its quality, cocoa farmers remain poor and unable to access the true value of what they create.

Divine is delighted that Cadbury is joining us in saying that the current way of working is neither sustainable nor fair. Together we can create a step change, where the very least companies should do is pay a Fair Trade price for the ingredients they buy, and that anything less is just not acceptable.

Today is the 52nd anniversary of Ghana achieving independence from colonial rule. We wonder whether this anniversary marks another historic moment for West Africa. Is this the new era of fairness in the chocolate industry, of real partnership between chocolate brands and the cocoa farmers who help make chocolate great?

We believe that it will be so – with your support.

My challenge to you is this:

1. If you’re planning on purchasing chocolate, use your purchasing power to support Fair Trade for cocoa farmers. You can find a full list of Fair Trade chocolate brands at www.fairtradecertified.org
2. Ask for Divine Chocolate and other Fair Trade products whenever and wherever you shop.

And – I invite you to join in our celebration of this new age of fairness for cocoa farmers. Enter to win a gorgeous Divine Chocolate basket. Share it with your friends and family and ask them to join in and to make trade sweet for cocoa farmers!

-Erin Gorman, Divine Chocolate

Continuing correspondence from ONE staff currently traveling through Ghana and Nigeria to see firsthand some of the extreme poverty and development issues currently taking place in Africa. Today Jennifer Hoerl talks about the West African Trade Hub. Click here to read more about this ongoing series on the ONE Blog.

The West African Trade Hub (WATH) works with West African business owners to export their products internationally, acting as an honest broker between the region and global markets in six sectors – cashews, fish/seafood, shea butter, apparel, home décor, and furniture. The WATH is one of four trade hubs created by the African Global Competitiveness Initiative (AGCI) to assist African producers in navigating the U.S. business arena including understanding U.S. customs laws, finding buyers, and getting assistance with pricing and marketing. The trade-hubs cost little to operate and since 2005 have generated an additional $60 million in exports to the U.S.

Today we met with Vanessa Adams and Elitza Barzakova of WATH, and they showed us two businesses in Accra that were benefiting from the relationship they have with WATH.

Tekura Home Furnishes

Tekura is run by Kweku and Josephine, a husband and wife team that produce incredible wood products, such as masks, tables, and bowls. With the assistance of WATH, Tekura is able to sell its beautiful items to such companies as Target, TJ Maxx, and Pier One. Depending on the order sizes, they employ anywhere from 30 to 100 employees – carvers, sanders, and painters from the local area. Josephine told us that they are truly “a success story, but it wasn’t easy.” Businesses like this have many problems getting started with little or no collateral, difficulty dealing with banks, finding buyers, product development, and maneuvering through the rules associated with export.

Kente Cloth Weavers

Kente is an Accra business run by Bob Dennis and his brothers. Their Kente clothes are Ghana specific, although the thread is both bought in Ghana, and imported from India, China, and Europe. Using such thread as cotton, rayon, silk and the newly added tencil, Bob and his employees create absolutely beautiful fabrics. Their skills at weaving are seen in the intricate details of their place mats, table runners, and blankets. They once produced 50 bedcovers for an Australian company which took them about 1 year. They started their business in 1999 in their basement, and today they employ about 21 weavers, which demonstrates their personal determination and entrepreneurship that were able to come to fruition with some assistance from WATH.

Meeting Josephine, Kweku, and Bob, we could see the pride they had in their businesses, and what their efforts – and a little assistance – can produce.

-Jennifer Hoerl