Soloutions to development - trade

Soloutions to development - trade

1. Trade = the solution to poverty?

2. Reality

   • International trade is worth over £11.5 billion per day.
     • However it is the rich countries that benefit
   • Rules discriminate poor countries
     • Favour big business with 70% of world trade being made up by multi-national corporations
     • Make up 40% of the worlds population but account for 0.4% of world trade

3. Problems facing LDC'S in terms of trade

   • 1) Global economics system 2) Double standards and terms of trade 3) LDC's are always playing catch up 4) Technology gap 5) Corruption and bureacracy in LDC's and poor governance 

4. Obstacles to trade

   • Trade barriers
     • In the form of tariffs or taxes
       • Rise price of imported goods thus protecting own industry and products
     • Non tariff barriers
       • E.g Health and safety and such restrictions that can last for years. All of which serves to keep goods and produce from developing countries out of the markets.
   • Subsidies
     • Wealthy governments often subsidise agriculture. Farmers cant compete in their own markets or abroad when they are flooded by cheap goods.

5. Real life examples

   • Ready, Steady, Trade
   • Catfish- America
     • To protect american catfish farms congress- only fish you can sell is american catfish- preventative of competition. Vietnemese lost 100 billion so renamed their catfish basa
   • Rice - Haiti
     • Slashed tariffs on american rice so flooded the market ($200 for farmers)
   • Vegetables- Ghana
     • Britain and eu have stringent health regulations - struggle to export their produce
   • Sugar Cane- Kenya
     • Falling price of sugar. Cheap sugar from abroad. Huge subsidies for EU farmers froce prices down for others as they make too much

6. International institutions and trade

   • World trade organisation
     • Promotes international trade and the removal of trade barriers. Critique- Decision making = dominated by rich e.g. EU had 500 delegates and Haiti had 1
   • IMF
     • Supervise the operation of the new international monetery scheme. Aims to promote international trade and lends money to countries who cant function as a business. . Have to agree to certain agreements using structural agreement plans which focuses on neo-liberal principles e.g. cut in gov;t spending, privatisation of industries and reducing any barriers to trade.
   • World Bank
     • Designed to aid long term development providing aid in the form of loans. Consequence = huge debts which are supposed to be paid off due to economic growth.

7. Theories of TNCS and Trade

   • MODERNISATION
     • Emphasise alleged benefits which TNC subsideries can have
       • Intro of foreign capital and advanced technologies for the training of l/w, boost to local markets of more disposable income and access to world market
       • Role in integrating nation states of the world in a general process of globalisaton
   • DEPENDENCY
     • Benefits outweighed by disadvantages
       • TNC'S primarily enrich themselves and perpetuate the distorted dependant role of the most of the third world.
   • FEMINISM
     • Added to the female burden
       • Most likely to work in EPZ's Low pay Forced to move to find work - Hochschild Dual burden and triple shift Exploited and marginalized 
   • SKLAIR - Companies such as Ford, Coke and Sony have more power than the majorities of countries. 1993

8. Export Processing Zones

   • A free trade or epz is an area within which goods may be landed, handled, manufactured or reconfigured and rexported without the intervention of the customs authorities 
   • 18 million people in china work in 124 zones
     • Foreign firms are invited Very generous terms- buildings paid, exempt of taxes, and access to cheap resources and local labour Encouraged to set up