Free trade isn't a level playing field- its structurally biased against developing countries and produces a cycle of poverty

(Alison M, Vulnerable Women and Neo-Liberal Globalization: Debt Burdens Undermine Women's Health in the Global South, Theoretical Medicine 23, 425-40)

When neo-liberal globalization has been so harmful to the health of many people in the global South, it is natural to wonder why they continue to participate in this system. Much of the answer lies in the past. Neo-liberal policies were introduced in many Southern countries in the 1980s as conditions of borrowing money from international lending institutions or of rescheduling existing debts. Many developing countries engaged in massive borrowing in the 1970s, when interest rates were low but, when interest rates rose sharply at the end of that decade, most debtor countries had difficulty paying the interest on their loans. In the early 1980s a world debt crisis resulted, threatening the failure of major US banks and perhaps a collapse of the world economic system. In order to forestall default by large debtors such as Mexico, international lending institutions such as the International Monetary Fund and the World Bank rescheduled many debts. At the same time, they imposed new loan conditions mandating so-called policies of structural adjustment or SAPs. These neoliberal economic policies “adjust” the “structures” of local economies so that they can be integrated into the global economic system, thus enabling them to gain the foreign currency necessary for servicing external debts. SAPS thus are designed to orient local economies away from production intended to satisfy the needs of local people and towards producing goods for export.15 Any local economy that is integrated into the global economy becomes vulnerable to the vicissitudes of world trade. For example, SAPs encouragement of cash crop agriculture, has forced many countries in the global South to become permanently dependent on Northern machines and fertilizers, as well as on world prices for their crops. Thus, SAPs have created guaranteed markets for Northern manufactured products, technologies and consumer goods and simultaneously have ensured a “captive” supply of cheap exploitable labor, cheap raw materials and agricultural products. In a world where the terms of trade for raw materials and agricultural products have historically tended to worsen (with a few conspicuous exceptions, such as oil), such interdependence has inevitably made the North richer and the South poorer. Although SAPs were promoted as necessary to economic development in the global South, they have harmed rather than helped development in many debtor nations. The growth rates of most debtor countries have been significantly reduced, living standards in many have deteriorated, and some have become trapped in a vicious cycle of stagnation and decline. Some of the countries that are worst off are the most integrated into the global economy; for instance, exports account for close to 30 percent of the GDP of impoverished sub-Saharan Africa, compared to less than 20 percent for industrialized nations. Many Southern countries are now in a state of economic collapse and their debt burden has multiplied many times over. By 1997, the total debt stock owed by the developing world to the developed world was $217 TRILLION, up from $1.4 trillion in 1990. Although SAPs have been counterproductive from the point of the view of the global South, they have been highly successful from the point of the view of the global North. This is because they have ensured that an increasing proportion of the debtor countries’ resources have gone to paying off foreign debts. Even by the mid-1980s, the Third World was paying out annually about three times as much in debt repayments as it received in aid from all developed-country governments and international aid agencies combined. Ten years later, the developing countries are paying the rich nations $717 million per day in debt service; $12 billion annually flows north out of Africa. The need to service their debts provides much of the explanation why many countries in the global South have joined the WTO, despite the fact that the neo-liberal rules of this organization tend to favor the interests of Northern countries and corporations over those of poor people and countries. Deeply indebted nations, which need foreign exchange to service their debt, cannot afford to be left out of the global trading system. Thus, the existence of longstanding debt is one of the chief mechanisms maintaining global neo-liberalism. It binds Southern debtors and Northern creditors together in a system advantageous primarily to the privileged classes of the global North. Because this system is harmful to most women’s health, Southern debt should be an important concern for both medical ethics and feminist ethics. I wish to conclude by suggesting that many supposed Southern debt obligations are not morally binding because they were not legitimately undertaken. (431-33)