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How to lower living standards and perpetuate poverty

By Alan Oxley - posted Wednesday, 20 July 2011

If the policies proposed in platforms of the Greens were implemented, living standards in Australia would fall and developing countries would be denied opportunities to raise living standards and reduce poverty.

The effect in Australia would be slower economic growth. The policies would divert investment into industries with unproven economic viability; reduce production of commercially viable products for export; and surrender rights for Australian producers to export without restriction into global markets. This would reduce output from manufacturing and resource industries and reduce exports.

The changes proposed for international trade would undermine the system of open global markets established after World War two on which the fastest increase in global prosperity in recorded history has been based. It would deny the one billion people still living in poverty the opportunity billions have already taken to raise living standards by trading into open global economy.


This policy will also lead to trade coercion and bullying of the developing countries for whom the policy professes support. The bill to ban illegal logging which the Gillard government introduced into the Senate in April 2011 and which the Greens support is a prime example.

The purported aim of the anti-logging bill is to prevent illegal logging in developing countries. Green groups have been lobbying for such a measure for several years. This measure will have virtually no impact on illegal logging outside Australia. It will impede imports of competitively priced timber and timber products from developing countries, thereby reducing opportunities for developing countries to build wealth on trade and reduce the competitiveness of the Australian timber industry.

The Greens policies on global economics are contradictory and lack coherence.

The policies require Australia to withdraw from existing Free trade Agreements (two of which give favourable access to Australia's markets – to Thailand and the nations of the South Pacific) as well as from negotiations to forge agreements with china, Malaysia, Indonesia and India, all of which would benefit Australian exporters.

The policies require Australia instead only to participate in multilateral trade agreements, yet requires that the only multilateral trade agreement which exists, via the World Trade Organisation (WTO), be radically reformed or abolished. The obligation to join only multilateral agreements is qualified, "unless a bilateral agreement is favourable to a developing country."

These policies demonstrate ignorance of the economics of international trade and of the purpose, intent and impact of international trade agreements. If implemented, they would leave an international impression that the Australian government did not understand how trade agreements work. They would reduce Australia's trade and that of its trading partners.


The policies set goals, which include, inter alia, securing a "decent standard of living for all" and "eradication of poverty." Realising these goals is impeded by the principle in the policy that "economic development must be compatible with, and subservient to, ecological sustainability."

The global consensus over the relationship between measures to increase economic growth and measures to protect the environment is laid down in the agreements reached at the UN RIO Earth Summit in 2002. They state that economic growth and environmental sustainability need to go hand in hand, with one not subordinating the other.

Subordinating economic development to ecological sustainability would retard both economic growth and improvement of environmental protection.

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This essay is republished from The Greens: Policies, Reality and Consequences published this month by Connor Court.

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About the Author

Alan Oxley is the former ambassador to the General Agreement on Trades and Tariffs and Chairman of the Australian APEC Studies Centre.

Other articles by this Author

All articles by Alan Oxley

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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