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Economic Growth Without Social Justice: EU-India Trade Negotiations and their Implications for Social Development and Gender Justice

Author: C Wichterich
Date: 2007
Size: 30 pages (1.08 MB)

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Summary

Do trade negotiations between the EU and India still see social development as a parallel objective to economic development? This WIDE Network paper argues that there is no coherence between the development aid agenda and the trade and investment agenda. It provides civil society actors with background information so that they can critically engage in policymaking on trade and development between the EU and India.

The 7th EU-India Summit, held in 2006, decided to step up efforts towards a ‘broad based bilateral trade and investment agreement’ between India and the EU. On 28 June 2007, negotiations which are supposed to be completed within two years were launched in Brussels. While concerns about poverty, social equality, environment and gender feature prominently in the Country Strategy Paper for India 2007-2013, and in development programmes, in trade negotiations they are marginalised and are not determining factors for liberalisation and trade regulations. Apart from the general assumption that trade is favourable to poverty reduction, trade and investment policies are disconnected from social concerns, and seem to be socially and gender-neutral.

More critical reflections should explore in depth the impact of trade liberalisation on gender justice and ask whether patterns of unequal development instead of fair distribution and social justice persist. For example, in the focal sector of services:

• The expansion of tourism entails a loss of livelihood resources, for example water for the local population. Most of the service jobs go to men, and the expanding entertainment and sex industry recruits women.
• Jobs in the glitzy modern IT sector are attractive to young women because of high salaries. However, turnover is fast as the work is strenuous and boring and does not offer career opportunities or a good work-life balance.
• The liberalisation of financial services has already brought higher transaction fees and the closure of bank branches in rural areas. Is the entry of large foreign financial institutions beneficial to development, rural and social banking and social security in India? What gender implications are there?
• The entry of big retailers and food chains will have repercussions on the supply of agricultural products for the hypermarkets. What possible impact will this have on farming patters, on the expansion of contract farming, on the further integration of genetically modified organisms, and food security of the poor rural population?

Beyond the problem of balancing social and environmental costs and economic benefits, the general assumption that trade liberalization is a means to poverty elimination and a more equal distribution of resources in society has to be questioned.

• Trade and investment policies should revalue the grassroots of the economy, giving support to local and regional production, exchange and supply, as the basis of needs- and rights-oriented provisioning and trade.
• Fair rules for domestic as well as transnational trade are informed by a number of factors including: human rights and social justice; recognition of the right to protect industries and markets; fair prices to producers and consumers; and decent work and core labour standards.
• Civil society organisations in the EU and India have to deepen their networking in order to exchange information and views on progressive trade liberalisation on both sides and their opposition against the corporate-driven free trade agenda.

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Source: Wichterich, C., 2007, 'Economic Growth Without Social Justice: EU-India Trade Negotiations and their Implications for Social Development and Gender Justice', WIDE Network
Author: Christa Wichterich , Christawic@aol.com