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Rep. McDermott Unites Broad Coalition to Fight Global Poverty With New Trade Legislation
October 18, 2007
For Immediate Release

Rep. Jim McDermott (D-WA), supported by senior Democrats and Republicans on the House Ways and Means Committee and the House Foreign Affairs Committee, introduced The New Partnership for Development Act today to combat the root causes of global poverty.

"Hundreds of millions of people in the world live on less than $1 per day," McDermott said, "and I believe the United States has the capability, compassion and commitment to drive positive change in the world through this new trade and development legislation."

"This legislation takes a large step toward advancing a new national trade policy that lifts standards rather than permitting a race to the bottom," said Rep. Phil English (R-Pa.), a senior member on the House Ways and Means Committee. "The initiative benefits extremely under-developed communities by promoting trade with the United States in the context of internationally recognized labor rights. It is a potential milestone in making trade with the developing world mutually beneficial, and a vehicle for reducing global poverty and creating growth and opportunity in nations that have been left out of the benefits of global trading."

The New Partnership for Development Act primarily targets countries that the United Nations identifies as "Least Developed" countries (LDCs). The legislation would eliminate tariffs on all products that originate in these countries and, at the same time, promote the development of infrastructure and the human capacity to grow and manage their economies.

Furthermore, the legislation includes provisions that would require recipient nations to adopt and maintain core labor rights as identified by the International Labor Organization. The legislation also recognizes and rewards nations that use market-based economies, practice Rule of Law, recognize political pluralism and protect human rights.

Under the legislation, $5 billion would be authorized for investment in trade capacity-building and infrastructure development in LDCs. A new office inside the United States Agency for International Development (USAID) would be established to develop large-scale infrastructure projects in concert with other nations, political and private institutions. The legislation requires an annual report to the Congress that addresses efforts and outcomes country by country to establish transparency and accountability.

Bread for the World, Trade, Aid and Security Coalition, and Oxfam America, representing faith-based, trade and business groups wrote in a letter of support: "As a coalition of non-governmental organizations, leading U.S. businesses, and business associations who support broader global prosperity and the well-being of the poorest members of society, particularly women and other vulnerable populations, we welcome this bold and far-sighted proposal. Implementing this new initiative into law would not only represent U.S. leadership in meeting international commitments, but it will also be an important investment in U.S. security. Greater economic growth in impoverished countries will help them fight disease, poverty and violent extremism."

In a letter of strong support from the American Apparel and Footwear Association, which represents thousands of companies large and small, Kevin M. Burke, President and CEO, said: "The NPDA imposes some long-needed consistency and certainty to that system that will stimulate stronger trading partnerships and opportunities with the developing world."

Other letters of support were received today from Levi Strauss & Company and Manchester Trade Limited.

Rep. McDermott developed the legislation over the last four months by meeting and requesting input from representatives from Least Developed Countries and Africans in particular, labor and humanitarian organizations, women's groups and others. During that process, some legitimate concerns were raised about potential erosion of preferences, especially among African nations. McDermott said as a result of his meetings safeguards were built into the legislation to ensure that nations benefiting from existing trade preferences inside his landmark AGOA legislation (African Growth and Opportunity Act) would not suffer as a result of The New Partnership for Development Act.

"Our intent in this legislation is to fight extreme poverty and reach more countries than we have been able to reach before," McDermott said. He said the legislation includes a strong oversight role for Congress, a leadership role for the President, and a statement of affirmation by the American people to be a force of good in the world.

"Without economic justice, we sentence ourselves to living in a troubled world where violence is a powerful allure for people, especially young people, who feel hopeless and fated to living in a world of economic and cultural oppression at the hands of developed nations, including ours," McDermott said.

A broad bi-partisan coalition of Members agreed with McDermott and signed on to the legislation as original co-sponsors. Rep. Phil English (R-PA) is the lead Republican on the legislation. Other original co-sponsors include Rep. Kendrick B. Meek (D-FL), Rep. Diane Watson (D-CA), Rep. Joseph Crowley (D-NY), Rep. Jerry Weller (R-IL), Rep. Earl Blumenauer (D-OR), Rep. Adam smith (D-WA) and Rep. Dan Burton (R-IN).

"I believe in the unlimited power of America to do good in the world and in the goodness of the American people to see wrong and act, to channel our compassion into economic change that will not merely raise the standard of living for those earning $1 a day, but also raise the prospects of global peace," McDermott said.

For historical perspective, and to understand the urgency, we've included some economic data:

During the 1970s middle-income countries grew at 2.5 percent per year. For those at the bottom – the billion or so people that live in Least Developed Countries, the 1970s brought 0.5 percent economic growth.

During the 1980s and 1990s, middle-income countries grew at 4 to 4.5 percent per year. For those at the bottom, the bottom fell out; The 1980s ushered in a 0.4 percent decline in these economies. It got worse in the 1990s.

In 1954, LDCs' share of world trade was approximately 3 percent, but by 2004, this number plummeted to 0.68 percent.

About 30 percent of those at the bottom either live in countries where the power and the economy are dominated by a natural resource. These countries are 25 times more likely to experience civil strife. About 75 percent of those at the bottom have been through at least one civil war and are coping in countries that are governed very poorly.

Another third of those living at the bottom are living in countries that are resource scarce, landlocked and surrounded by bad neighbors.

In Africa, hunger is a key factor in more deaths than those caused by all of the continent's infectious diseases combined.

One in six African children will die before they reach the age of 5.

Six million children will die this year from malnutrition. Most of these gravesites will be in Least Developed countries.

We live in a world where every cow in Europe receives almost $2 each day in government subsidies and where in Least Developed Countries the average daily income for most people is about $1.