When Oxfam speaks, well-intentioned people listen. Its new report on trade and the world's poor is certain to be highly influential. The question is whether it deserves to be. The answer, on balance, is No.

The report aims to cut a middle way between the "globaphobes" and the "globaphiles". Globaphobes reject trade altogether. Globaphiles believe international economic integration is already a powerful force for poverty reduction.

Against both, Oxfam argues that trade "has the potential to act as a powerful motor for the reduction of poverty, as well as for economic growth, but that potential is being lost. The problem is not that international trade is inherently opposed to the needs and interests of the poor but that the rules that govern it are rigged in favour of the rich."

Barriers to imports in the advanced countries are, argues Oxfam, biased against the exports of developing countries at a cost to the latter of $100bn (£70bn) a year. Yet, while rich countries keep markets closed, poor countries are being forced to open theirs, "often with damaging consequences to poor communities".

The charges mount up: the problem of low commodity prices has not been seriously addressed; transnational corporations contribute to poverty and insecurity; and the bias of the World Trade Organisation "in favour of the self-interest of rich countries and big corporations raises fundamental questions about its legitimacy".

Oxfam's proposals to change all this include liberalisation by the advanced countries in favour of the poor; ending the imposition of unilateral trade liberalisation on poor countries by the World Bank and International Monetary Fund; creating new intellectual property rules; prohibiting rules that force governments to liberalise basic services; raising investment and employment standards; and giving poor countries a stronger voice in the WTO.

Some of the charges are justified. The contrast between the free trade rhetoric of President George W. Bush, hypocrite-in-chief, and the country's protectionist actions over steel and the horrifying farming bill is shameful. Yet the US is far from uniquely guilty. Oxfam concludes that the European Union is the worst and the US only second.

Nevertheless, Oxfam's fundamental charge, that the falling shares in world trade of many developing countries are the result of rigged rules, is wrong. As the report notes, developing countries increased their shares in world exports of most significant categories of manufactures in the 1990s. Where countries have failed to break into world markets, the constraint is deficiencies in supply far more often than protectionism. To describe such unsuccessful countries as "excluded" is to confuse symptom with disease.

Similarly, Oxfam argues that "increased trade could narrow inequalities between rich and poor countries: instead it is reinforcing the gaps in incomes". This is doubly wrong. Evidence suggests the 1980s and 1990s were decades of declining global inequality and reductions in the proportion of the world's population in extreme poverty, not the obverse. And these declines largely reflected the ability of a number of countries, particularly China, to exploit opportunities to trade.

Oxfam's exaggerations are not harmless. Overemphasis on barriers to developing countries' exports - at least outside agriculture - justifies export pessimism. Oxfam is nurturing a self-fulfilling prophecy that has done huge harm to developing countries in the past.

Unfortunately, other questionable - or plain incorrect - conclusions in this report are conducive to yet further policy blunders. Consider just five.

First, the report argues that the rich countries should liberalise in favour of the poor, not because it is in their economic self-interest but more because it is the morally right thing to do. This (incorrect) position plays into the hands of northern protectionists. Liberalisation is always politically difficult. Without the force of enlightened economic self-interest, it is almost impossible to achieve. Goodwill for the poor is rarely enough.

Second, Oxfam also underplays the argument that trade liberalisation is in the individual interests of developing countries. The consequence is a renewed emphasis on special and differential treatment within the trading system. But if poor countries then refuse to bargain reciprocally, there is still less chance of their curbing northern protection.

Third, poor countries, with few exceptions, retain significantly higher trade barriers than rich ones. These are, just like those of rich countries, biased against goods in which developing countries are competitive. Oxfam's recommended resistance to liberalisation will limit the opportunities of poor countries for trade with one another, so making them even more dependent on rich countries' markets than they otherwise need to be.

Fourth, by placing heavy weight on the allegedly exploitative behaviour of transnational companies, Oxfam is again playing directly into the hands of the northern protectionists. The latter argue that the shift of production and exports to the south is creating a "vast sucking sound" in the north that does not even benefit the world's poor. To support this largely spurious argument is to help justify protection as a favour to the world's poor, not as another damaging burden on them.

These mistakes fit together with a fifth: the decision to call Oxfam's new campaign one for fair trade. This is the favourite slogan of modern protectionists. No, they say, we have no objection to trade, provided it is fair. But fairness is in the eyes of the beholder. By adopting this label, Oxfam gives oxygen to those who, in the guise of a concern for the poor, wish to preserve the privileged position of the relatively rich.

The defect of this report is not that it lacks good analysis, or that it lacks sensible recommendations. It possesses some of both. It is that in trying to run with both the anti-globalisation hounds and the pro-globalisation hares, it finishes in an intellectual swamp. Oxfam's condemnation of what happens today is not entirely wrong - far from it. It is merely far too sweeping. But, as a result, Oxfam will fail to move the world in the direction it wants. It is, instead, pushing it firmly in the wrong direction.