Issue 7: February – March 2001

Tax trade
to share
benefits of globalization,
says WIDER
director

Tony Shorrocks

Taxing foreign trade could be one solution for distributing the fruits of globalization more equitably among nations, according to Tony Shorrocks, new director of UNU World Institute for Developoment Economic Research (UNU/WIDER).

A one per cent tax on foreign trade would not harm any country and would lead to the accumulation of substantial funds that could be used for the basic needs of developing countries such as health, education and infrastructure. Taxing foreign trade could be more meaningful than the Tobin tax on international currency flows or the UN recommendation that 0.7 per cent of wealthy countries'  GDP be spent on development aid.

"Foreign trade is much more concrete and agreements would be made more easily within the WTO. It is also linked more directlry to globalization," Shorrocks said in an interview with the Finnish weekly journal Suomen Kuvalehti.

Shorrocks returned to the theme of globalization and income equality in a separate interview with the newspaper Hufvudstadsbladet. "Free trade and globalization are partly responsible for the increase of inequality at the global level," he said.