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.

ASEAN: Association of Southeast Asian Nations. Eight ASEAN members are members of the WTO — Brunei, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore and Thailand. The other ASEAN members — Laos and Vietnam — are negotiating WTO membership. The EU is currently negotiating a Regional Trade Agreement (FTA) with all, bar Myanmar.

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: A treaty signed in 2000 (succeeding the Lomé Convention) between the EU and the group of African, Caribbean and Pacific states (ACP countries) that covers relations between them including trade. Under the Lomé 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. The new scheme is called the Economic Partnership Agreements (EPAs).

Department for Business Department for Business, Enterprise and Regulatory Reform (BERR): This department has  been reorganised a number of times (firstly was the Department of Trade and Industry DTi. BERR became  the Department for Business Innovation and Skills). The UK Government department that has responsibility for the regulation of UK businesses that trade around the world and, jointly with DFID, responsibility for the UK's international trade policy.

Department of Business Innovation and Skills (BIS): This department was reorganised with a merger of the Departments of Business, Enterprise and Regulatory Reform (BERR) and Innovation, University and Skills in June 2009. This department has responsibility for the regulation of UK businesses and skills. The current Secretary of State is Lord Peter Mandelson, the former EU Commissioner for Trade.

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): Since July 2007 this UK Government department plays the leading role in trade policy so far as it relates to developing countries. DFID is headed by a cabinet minister, the Secretary of State for International Development (currently Douglas Alexander MP) assisted by a Trade Minister (currently Gareth Thomas MP) who shares responsibility for trade issues with the Department for Business Innovation and Skill. Prior to June 2009, Gareth Thomas was a joint Minister in the Department for Business Department for Business, Enterprise and Regulatory Reform (BERR).

Department for Trade and Industry (DTI): The UK Government department that led on policy making on trade until July 2007 when Gordon Brown became prime minister and created the Department for Business Department for Business, Enterprise and Regulatory Reform (BERR).

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

Duty Free Quota Free Access (DFQF): This refers to a system that allows market access by the least developed countries into rich country markets without the imposition of duties on certain products. However World Trade Organisation (WTO) rules allow developed countries to exclude up to 3% of "sensitive" products from using this access. This exclusion manages to neutalize the benefits to developing countries as it is these very products that developing countries are able to trade well in.

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. Many of the least developed African countries are currently trading under the EBA scheme if they haven't signed an Economic Partnership Agreement.

EPAs: Economic Partnership Agreements. New free-trade agreements being negotiated between the European Union and 76 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.  South Africa has opted out of these negotiations due to their concerns and having another trading arrangement in place.  EPAs were meant to herald a new era of "partnership" between the EU and ACP countries. The deadline for completion of the negotiations imposed by the WTO was 31 December 2007. Many ACP countries have still not signed the EPAs deal.

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 27 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 Karel de Gucht (Belgian).  A new set of structures and roles have been set up following the Lisbon Treaty - an EU President and EU Foreign Minister position are the most significant.

Free trade: A programme that means abandoning government intervention – whether taxes, subsidies or regulations – in favour of the free market, as well as the subordination of all other objectives to the elimination of trade barriers. The Trade Justice Movement is opposed to such a programme given the need to support each and every intervention in favour of poor people and the environment as well as the mounting evidence that the free trade model has been responsible for increasing poverty, harming the environment and eroding labour standards across the world.

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.

G4: The “group of four” WTO members - the EU, the US, Brazil, and India – that have met in parallel to the formal Doha Round negotiations, replacing the Quad as a set of countries seen by many as at the centre of negotiations.

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.

G20: Group of 20 of the most prominent nations in the developed and developing world, usually the Finance Minsters . In 2009, it was felt that the G20 may become over time the dominant decision making body surplanting the G8. The G20 is made up of Argentina, Australia, Brazil, Canada, China, France, Germany,India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK, USA and the European Union. The 2010 G20 summit will be held in Toronto on June 26-27 and Seoul on 11-12 November.

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.

Global Europe: This refers to a strategy drafted by the then EU Trade Commissioner Peter Mandelson and approved in 2006, that sets out the EU's trade objectives. Principally it contained a blueprint for an aggressive trade strategy through Regional Trade Agreements with the developed and developing world.

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: Covered relations (including trade) between the EU and former European colonies until being replaced by the Cotonou Agreement in 2002.

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 the United States (US) who between them dominated international trade negotiations. In recent years India and Brazil are seen with the EU and US are the dominating countries (together they are known as the ‘G4').

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. There has been a huge explosion in the number of Regional Trade Agreements being negotiated following the stalemate in the World Trade Organisation talks.

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 Pascal Lamy). Trade rules themselves are agreed by the member countries. The WTO staff facilitate the process. There are currently 153 member countries in the WTO.

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. In 1999 they met in Seattle (USA), in 2001 in Doha ( Qatar ), in 2003 in Cancún ( Mexico ) , 2005 in Hong Kong and 2008 in Geneva (though not to negotiate a trade round) . They are meant to hold a full ministerial every two years.