What is wrong with trade?
Although trade has the potential to benefit poor countries, and help them trade their way out of poverty, the current situation is making this impossible. International trade rules are unfair. They are favouring the interests of the richest countries and large corporations, while poor countries fail to benefit and some even become poorer.
Subsidies and Dumping
Many rich countries give their farm businesses money, known as subsidies, which means farmers are able to sell their goods at lower prices. This leads farmers to overproduce agricultural goods in rich countries, which are then sold off cheaply in poorer countries (known as 'dumping'). Although this may seem to benefit poor consumers who can buy cheaper goods, in fact most people in poor countries are also producers. They become obliged to sell their own goods for lower prices, or they are unable to sell their goods at all because the market becomes flooded. If they no longer earn an income they cannot buy goods no matter how cheap they are. It is also more important for poor consumers to have stability, even if the stable prices are a bit higher - the problem with cheap imports is that they are often here one day but gone the next.
Taxes and Access to markets
It is difficult for many poorer countries to sell manufactured goods to Europe and other rich countries, because the richer countries deliberately charge high taxes on these goods to keep them out. This means poor countries are limited to mainly exporting raw materials (e.g. coffee beans). They are prevented from progressing into production and export of processed goods (e.g. coffee granules), which could earn them far more profit. Quotas and restrictions also limit how much poorer countries are allowed sell in richer countries.
Forced liberalisation
Many poor countries are being forced to stop giving subsidies to their producers. Rich countries and the World Bank/IMF are pushing them to adopt free trade, as a condition for receiving aid, loans and debt relief. They want poor countries to allow imports in (from rich countries) without any restrictions. The result is that poor farmers become exposed to harsh international competition, and they are often unable to compete with the lower prices. Their produce is left unsold and they are no longer able to make an income.
Commodity prices
Poor countries produce most of the primary commodities the rich world consume (e.g. coffee, chocolate, cotton), but the rich world sets the prices. The big companies that turn these raw goods into products and sell them on to consumers make huge profits. But the producers in poor countries, who have invested their time and labour in growing the crops are being paid lower and lower prices. For example coffee prices have fallen 70% since 1997. As a result many farmers are barely able to survive or support their families.