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Lecture 9

SOC 808 Lecture 9: SOC808 – Lecture 9

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SOC 808
Monika Korzun

SOC808 – Lecture 9 Trade  Only 10% of global trade if food and agricultural products.  Only 25% of world food production is traded on international markets.  So why do we care? o Canada relies heavily on imports, even though the population is small o When it comes to agricultural products, Canada exports more than it consumes, but those products are not for human consumption o 1994 -> when trading food/agriculture became official and regulated 3 Eras of Trade 1. Modern colonialism (1600s to 1940s) -> the start of slavery; as the European populations started to grow, we started to see more factories; they tried to get raw produce from other countries  Sugar used to be for the elite, but demand increased and it became the source of energy for factory workers 2. Development era (1950-1980s) -> former colonies started to get independence; we still wanted to help developing countries (b/c Western countries played a big role in making them poor in the first place)  Thus began the use of fertilizers, pesticides, etc.  We thought that to get developing countries out of poverty, they had to produce food the same way we do in North America (i.e. mass production)  While they were no longer slaves, they still provided very cheap labour; we were getting cheap food here, but at the costs of the workers in developing countries 3. Globalization (1990s until present) -> we shifted our thinking of how to help the developing world; introduced the free market to help them get out of poverty Globalization  General Agreement on Tariffs and Trade (GATT) - 1994 o Poor countries used to increase their tariffs as a way to make money; in globalization, tariffs are seen as a bad thing because it discourages trade o 123 countries signed on it; enforces rules  World Trade Organization (WTO) o WTO is criticized because some say it’s bad for individual governments (reduces their controls)  E.g. cannot discriminate against any companies -> as the government of Canada, I can’t favour the Canadian company over the Chinese company  International Monetary Fund (IMF) and World Bank o Structural Adjustment Programs (SAPs) o Gives long-term loans to developing countries; problematic because interest is high and with strings attached (i.e. SAPs) Trade Dependency  Rice in Haiti -> in 1990s, Haiti was a self-sufficient country; they produced enough to feed their country o It’s the poorest country in the Western hemisphere, so it took out a loan from the World Bank; Work Bank forced them to remove tariffs so the tax on rice because 3%, making other companies export to Haiti  Rice farmers within Haiti couldn’t compete with international companies so they went bankrupt o In 2007-8, the market crashed; the imported rice became expensive, and they could no longer afford it; additionally, the farmers that used to operate went out of business, so now there was no food  Haiti then took out another loan, trapping them in the system  Cocoa in Ghana -> 1895 British introduced the cacao tree in Ghana; farmers benefitted in this market o When the great depression happened in 1929-39, the price of cocoa dropped; the farmers in Ghana who were doing great, are now doing horrible  Because they relied on the cocoa market, once it dropped, so did their economy o They wanted to take the investments from the cocoa industry and invest it in other products, but because the cocoa industry was so unstable, they needed to take a loan from the World Bank  Role of corporations o Ex) McDonald’s o There are 3 companies around the world that provide 80% of frozen French fry industry (McCain is one of them)  These three companies buy a pound of potatoes for $0.30, and sell it for $6, giving them a very high profit  Only 2 cents of this profit goes to the farmer o Because farmers are so reliant on this industry, they cannot produce other products, and the big corps have full control  Farmers are being paid less and less for their produce Trade Disputes  USA and EU -> they file the most complaints, but there’s also the most complaints filed against them  The banana dispute (1993) -> the EU wanted to support the small farmers, so they put really high tariffs on the Latin America & Caribbean bananas, and no tariffs on Asia and Africa o USA got their bananas from Latin America, so they filed a complaint to the WTO against the EU (went on for about 6 years)  EU and GMOs o In 1993, EU banned GMOs; USA was the top producer of GMOs (Canada #5) o USA got upset because they exported a lot of their wheat to the EU; a lot of the wheat that the USA stated were GMO free still weren’t accepted because they were contaminated o Dispute went on for 10 years; EU accepted only 1 type of GMO corn, but it was used for animal feed instead of human consumption o EU also banned hormones in their meat; USA exported a lot of its beef to the EU, and as a result of that ban, their market fell 94%  USA filed a dispute through the WTO; initially, the WTO favoured the US and told the EU that they couldn’t ban hormones and that they had to take the US products  EU did a lot of research about how bad hormones are in food, and when presented to the WTO, they agreed and allowed the EU to keep the ban  Precautionary Principle  Precautionary Principle: A strategy to cope with possible risks where scientific understanding is yet incomplete. Burden of proof is on showing absence of danger NOT that there is a lack of evidence of harm. o It’s not enough to show that a product is not bad; you must show that it’s healthy o If there’s a lack of evidence showing that GMOs are bad, it doesn’t mean that those foods are necessarily healthy  In the EU, absence of evidence that it’s bad is not enough (which is why they ban a lot of
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