Trade

Trade Policy and Global Poverty by William Cline examines how changes in trade policies in the United States and other industrial countries could help reduce poverty in developing countries. Cline first reviews the extent of global poverty and its relationship to trade and growth. He then examines the key components of these relationships to identify lines of trade policy action that could help reduce global poverty.

The African Growth and Opportunity Act took effect in January 2001 to allow qualifying sub-Saharan African countries to export qualifying goods duty free to the US. The act was expressly designed to "increase trade and investment between the US and sub-Saharan Africa." The evidence over the short time since it was enacted reveals that: most of the AGOA benefits have gone to oil exporters; most of the imports eligible for duty-free treatment are still being taxed, notwithstanding their eligibility. This is probably due to logistical difficulties in claiming AGOA benefits. AGOA has not increased trade flows from eligible countries to the US yet there are structural features of the law which threaten to reduce its developmental impacts.

At the United Nations Millennium Summit in 2000 the nations of the world committed to join forces to meet a set of measurable targets for reducing world poverty, disease, illiteracy and other indicators of human misery—all by the year 2015. These targets, later named the Millennium Development Goals, include seven measures of human development in poor countries. At the same summit, world leaders took on several qualitative targets applicable to rich countries, later collected in an eighth Goal. The key elements of the eighth Goal, pledge financial support and policy changes in trade, debt relief, and other areas to assist poor countries'domestic efforts to meet the first seven Goals. Combined, the eight Goals constitute a global compact between poor and rich to work today toward their mutual interests to secure a prosperous future.