Jargon Buster

A glossary of useful trade justice terms

AoA: Agreement on Agriculture. Trade rule on agriculture. Example of the double standards employed in trade negotiations. Subsidies were frozen at existing levels which in rich countries were very high but in poor countries were very low. Poor countries are therefore prevented from using subsidies effectively to protect their farmers while rich countries are able to continue subsidising theirs. 

AGOA: African Growth and Opportunity Act. Grants a number of African countries tariff-free access to US markets for a number of specified products. In order to qualify, African countries must meet certain conditions, including IMF/World Bank programmes and facilitating investment from US companies.

CAP: Common Agricultural Policy. EU policy covering tariffs, quotas and subsidies throughout the EU farming sector. 

Cost of production: The total amount of money spent on producing something to sell.

Cotonou Agreement: Will succeed the Lomé Convention. Covers relations (including trade) between the EU and former European colonies. Under the Lome convention poor countries were given access to EU markets without having to reciprocate but under the Cotonou Agreement that preferential treatment will be removed and poor countries will have to open up their markets to foreign competition. 

Development Box: Proposal within the Agreement on Agriculture (AoA) that would enable poor countries to maintain certain tariffs and subsidies in order to guarantee food security and fight poverty.

Doha: Location of the WTO ministerial meeting in November 2001. The present multilateral trade talks are often referred to as the 'Doha Round' of negotiations or the Doha Development Agenda (DDA).

Department for International Development (DFID): This UK Government department plays a major role in influencing trade policy so far as it relates to developing countries. It is headed by a cabinet minister - the Secretary of State for International Development (currently Hilary Benn MP), who is assisted by a junior minister (currently Gareth Thomas MP).

Department for Trade and Industry (DTI): The UK Government department that leads policy making on trade, headed up by a cabinet minister - the Secretary of State for Trade and Industry (currently Patricia Hewitt MP). There is also a more junior minister specifically responsible for trade, who sits in both the DTI and the Foreign and Commonwealth Office (FCO) (currently Douglas Alexander MP).

Dumping: Exporting a product at a price lower than the cost of production.

Escalating Tariffs: Increasing tariffs according to the level of processing of a good, eg the tariff on chocolate being greater than the tariff on cocoa. Makes it hard for poor countries to benefit from processing raw materials. 

EBA: Everything But Arms. Initiative to provide duty-free access into the EU for all exports, except arms, from the least developed countries. However, following intense lobbying by businesses, import duties will now remain on sugar and rice until 2009, and on bananas until 2006.

EPA: Economic Partnership Agreements. New free-trade agreements being negotiated between the European Union and 77 former European colonies known as the African, Caribbean and Pacific group (ACP). EPAs are part of the Cotonou agreement - a much wider agreement that covers aid, trade and political cooperation between the two groups of countries. 

EPZ: Export Processing Zones. Deregulated industrial zones introduced by poor countries to attract international investment. Imported materials are processed before being exported again. The problem for poor people is that the reason companies are attracted to them is that the usual environmental and labour standards do not apply there, and companies can enjoy long tax holidays. An example of the 'race to the bottom' where poor countries compete with each other to attract investment by offering less and less regulation.

European Union (EU): The EU represents the UK in WTO and other trade negotiations. The EU is a trading bloc and has a common trade policy based legally on the European Community Treaty (Article 133). The European Commission (EC) negotiates on behalf of the Member States, in consultation with a special committee, the 'Article 133 Committee' (made up of representatives from the 25 Member States and the EC). Major formal decisions are confirmed by the Council of Ministers who also set out guidelines for the officials who actually conduct negotiations (from the EC Directorate General for Trade, under the authority of the Commissioner). The European Trade Commissioner is currently Peter Mandelson.

Free trade: Trade without intervention from governments. Prices and products are determined by market forces of supply and demand.

FTAA: Free Trade Area of the Americas. Builds on the North American Free Trade Agreement (NAFTA) and aims to bring Central and South American countries into the same free trade area. 

G8: Group of Eight most powerful leaders in the world (Canada, France, Germany, Italy, Japan, Russia, UK and USA.) Decisions made at their annual summits can influence virtually any international summit or agreement in the world. 

GATS: General Agreement on Trade in Services. One of the means by which rich countries are trying to force poor countries to open the provision of their services up to the free market and international competition. This set of international rules that apply to all kinds of services ranging from education to rubbish collection, tourism to transport, health care to retailing.

GATT: General Agreement on Tariffs and Trade. Predecessor of the WTO. Originally a temporary agreement formed after the Second World War, following the collapse of the proposed International Trade Organisation in 1945, but continued until 1994. Negotiations under GATT were held in rounds. At first negotiations were restricted to reducing the level of tariffs on manufactured goods but over successive rounds the number of countries taking part increased and the scope of the negotiations broadened to include more aspects of trade. In the seventh and final rounds of GATT talks (known as the Uruguay Round) from 1986-1994, GATT was amalgamated into a new body called the World Trade Organisation with a much wider remit and the ability to enforce the rules. 

IFI: International Financial Institution eg IMF and World Bank.

ILO: The International Labour Organization (ILO) is the UN specialized agency which seeks the promotion of social justice and internationally recognized human and labour rights. 

Intellectual property: A category of public law that includes copyrights, patents and trademarks.

International Monetary Fund (IMF): Originally set up to give loans to countries to support the economy. However, since the 1980s has only given loans in return for countries agreeing to specific policies - which include liberalising trade. 

Liberalisation: Reducing the role of government in an economy leaving it to market forces. Liberalisation is the progression towards a system of free trade. A political philosophy that says market forces should, as far as possible, be unregulated with minimal interference by governments.

Lomé Convention: Covers relations (including trade) between the EU and former European colonies. Being re-negotiated under the new name of the Cotonou Agreement. 

MAI: Multilateral Agreement on Investment. An attempt by the OECD countries to push through an international agreement that would have forced countries to remove government regulation of investment and treat all investors equally, whether domestic or foreign. The UK government was a strong proponent, but the initiative failed due to a strong international campaign by people concerned about the effects it would have on poor people and the environment.

Market access: The removal of tariffs and other trade barriers, making it easier for other countries to sell their goods and services. 

MDGs: Millennium Development Goals: The anti-poverty targets adopted by every member of the United Nations. Each country has until 2015 to meet them. Goal 8 (develop a global partnership for development) includes trade (although all of the goals will not be achieved without trade justice).

Multinational company: Sometimes called a transnational company or corporation (TNC), a business that operates in many countries. In 1999, 48 of the richest economic players in the world were companies, and 52 were countries.

NTB: Non-Tariff Barrier. Barrier to trade other than a quota or a tariff, eg unnecessary health and safety standards. 

OECD: Organisation for Economic Co-operation and Development. A group of the world's richest nations (including more countries than the G8).

Protection: Using tools such as tariffs and quotas to protect local industries.

PRSP: Poverty Reduction Strategy Paper. A paper a country must produce in order to receive financial assistance from the World Bank and IMF. The name makes it sound better than it is!

Quad: Powerful grouping of key figures in the governments of the European Union, Canada, Japan and USA who between them dominate international trade. 

Quota: Limits to the quantity of a particular product that can be imported into a country. Volumes in excess of the quota are either not allowed or face heavy taxes.

RTA: Regional Trade Agreement. An agreement to reduce trade barriers between specific groups of countries, eg the North American Free Trade Area (NAFTA) agreed between the US, Mexico and Canada.

SAP: Structural Adjustment Programme. Economic liberalisation package imposed upon developing countries by the IMF and World Bank as preconditions for financial assistance.

Subsidy: Support provided for traders for reasons such as developing new industries or maintaining employment. Might be a straightforward grant, or could be something like a tax exemption.

TNC: Transnational Corporation. Company whose operations extend beyond the boundaries of the country in which it is registered.

Tariff: Tax imposed on imports and exports. Can be an important source of revenue for a government. Can also be used to make imports more expensive in comparison to locally produced goods, protecting local traders.

Trade Round: A major programme of WTO negotiations on a range of issues.

TRIPS: Agreement on Trade Related Aspects of Intellectual Property Rights. Trade rule covering ownership of knowledge. Can guarantee companies exclusive international rights to new inventions and discoveries for up to twenty years. Covers a wide range of intellectual property issues, including patents on seeds and plants.

TRIMS: Agreement on Trade Related Investment Measures. Trade rule covering foreign investment. Threatens the ability of poor country governments to make the most of foreign investment for poverty reduction by limiting their right to influence what form of investment takes place, when and where.

UNCTAD: United Nations Conference on Trade and Development. An organisation set up in 1964 following dissatisfaction with GATT. Researches the impact of trade liberalisation on poverty.

Uruguay Round: The last of eight rounds of talks of the GATT (1986-1994), which brought into international trade law for the first time a wide range of issues, such as agriculture, services and intellectual property rights, that had previously been under the control of individual countries. Led to the establishment of the WTO.

World Bank: Set up to give loans to countries for development projects. Since the 1980s has only given loans in return for countries agreeing to specific policies - which include liberalising trade. 

World Trade Organisation (WTO): Formed in 1995, replacing its predecessor GATT (General Agreement on Tariffs and Trade). The secretariat facilitates the writing and enforcement of international trade rules. It is headed up by the Director-General of the WTO (currently Dr Supachai Panitchpakdi). Trade rules themselves are agreed by the member countries. The WTO staff facilitate the process. At the time of writing there are 148 member countries. 

WTO Ministerial Conference: The ultimate governing body of the World Trade Organisation. Attended by the trade ministers and/or other senior representatives of all member countries that are able to send someone. Meetings take place every two years. In 1999 they met in Seattle (USA), in 2001 in Doha (Qatar) and in 2003 in Cancún (Mexico). The next WTO Ministerial Conference will be in Hong Kong in December 2005.