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GLOBALIZATION -
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We will pay for cheap bananas with prisons, fear and fragmentation

Posted in the database on Monday, December 12th, 2005 @ 16:19:05 MST (1320 views)
by Gary Younge    The Guardian  

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Those at the trade talks should recognise that there is much more to economics than the market price of goods

Kingston, Jamaica -- As hurricanes barrelled through the alphabet this year, pounding Anthony Barnett's two acres of banana fields in St Thomas, Jamaica, his healthy respect for the forces of nature endured. But as the World Trade Organisation meets in Hong Kong this week, it is the deliberate demolition wrought by humankind he fears most.

"Globalisation seems to me like a system where the man with power uses a big stick to put the man without power in his place," he says. "If you squeeze every last drop of blood from a Jamaican labourer and at the end of the day he hasn't got enough money to send his children to school or put food on his table, then who benefits?"

It is a question that should be first on the agenda in Hong Kong. Between them the EU, the US and the multinationals will conspire to either abandon the poorest nations to the fate of the market or entrench them in their poverty, while denying them valuable market access to the west's own vulnerable sectors.

Whether it is water provision in Bolivia or health insurance in Kenya, the WTO is set to cement international trading according to the golden rule - that those who have the gold make the rules.

Little wonder that, according to a Christian Aid poll, two-thirds of African trade delegations questioned said that their economies would suffer if they accept what is currently on offer, while more than half said they would halt the negotiations if they didn't like what was on offer. They should follow their instincts, and other less developed nations and progressive NGOs should follow their lead. When the only thing on the menu is going to makeyou sick, it is time to walk away from the table.

Nowhere is this clearer than in the Caribbean. At present the EU buys sugar at an inflated price from its former colonies - otherwise known as ACP countries (African, Caribbean and Pacific). The Brazilian government has challenged the practice as unfair. The EU has agreed to slash the price it pays for sugar by 36% over four years.

Meanwhile, the EU's practice of giving preferential treatment to bananas from ACP countries has been challenged by Latin American states where multinational giants like Dole and Chiquita operate. In the past, the EU bought ACP bananas duty free while imposing a tariff on those from elsewhere. Now those tariffs will also be slashed, making ACP bananas relatively more expensive.

"Developing countries have been sacrificed in order for Europe to reach a deal," says Jo Leadbeater, head of advocacy at Oxfam. "The commission has hurled money at its member states to convince them to sign up but has abandoned some of the world's poorest countries to destitution."

The result will be a double whammy for the Caribbean, where sugar and bananas are central to small national economies. Take St Vincent - a country with a population slightly lower than that of Huddersfield - where more than 50% of the workforce are in some way involved in bananas. The effect of these WTO rulings on a nation of that size will be analogous to a pit closure - but with tightening immigration all around there will be nowhere else for these people to go. Guyana was one of four countries in the Americas to benefit from the much-trumpeted debt relief initiative offered by the G8 - but its loss of income for sugar will wipe out all those benefits. The hurricane season is over; now global capital can finish the job for good.

According to the strict laws of comparative advantage, free-trade zealots have a point. Brazil produces sugar, and Dole and Chiquita produce bananas, far more cheaply than any Caribbean nation can. Even after the EU has slashed its sugar price it will be double what it can pay on the open market. The dollar bananas from Latin America may be tasteless and smothered in pesticides, but they are certainly cheap. Why not then clinch the deal that will give the British consumer the cheapest of everything and let these islands shift their resources to more effective sectors?

First, because while these changes will make a huge difference to the Caribbean they will make virtually none to the price of sugar and bananas. The nations concerned produce less than 2% of the world's sugar and bananas, and the principal beneficiaries of these changes will be a handful of oligarchies in Brazil and central America, not the consumer.

Second, because Caribbean nations freely acknowledge the need to change. They want to diversify into different sectors - such as eco-tourism and offshore banking - and other parts of the industry, making sugar byproducts like ethanol, molasses and rum. But in such small nations the scope for change is limited, slow, and needs help. "You can't adjust from a position of collapse," says Richard Bernal, who heads the regional negotiating team for the Caribbean. "We need a reasonable amount of time as well as financial and technical assistance if we are going to change."

The EU has offered €40m to the ACP countries in compensation for abandoning them; in stark contrast, it has offered European producers around €7bn to soften their blows in the upcoming deal.

Third, the very powerful blocs flagrantly flout the very rules they are pressuring these small nations to adhere to. American cotton and European agriculture are both subsidised to the hilt. US cotton farmers receive more in government subsidy than the entire economy of Burkina Faso, which produces cotton much cheaper - in direct breach of WTO rules. "We do well at sport because the playing field is even and the rules are public," said African-American politician Jesse Jackson, referring to black Americans in the workforce. That applies just as well to the WTO. "But when we are kicking up the field and people start making up the rules ... that's when the problems start."

And finally, there is more to life than trade and more to economics than the market price of commodities. Angela Stultz, who runs a local regeneration project in inner-city Kingston, anticipates those thrown off the cane and banana fields will end up in communities like hers, hustling to survive. "They will migrate to these kind of areas with mouths to feed and no money. That leads to frustration and desperation, and desperate people act desperately. They are driven by economic circumstances to survive." This is precisely what happened in Jamaica when the North American Free Trade Agreement decimated the garment industry.

The Caribbean has become the principal shipping point for cocaine trafficking between the Americas and Europe. More than a fifth of the cocaine in the US arrives through that route, according to the National Drug Intelligence Centre. With the drugs come gun crime, gang activity and community collapse. Cheaper bananas and sugar come at a high price. We will pay for them with more police, probation, prisons, fear and fragmentation.

"These aren't the poorest countries in the world," says Glenys Kinnock MEP, who has lobbied hard for the Caribbean's sugar and banana producers ahead of the forthcoming round. "They're not the Congo. But that is what we are threatening them with."

Making poverty history would be wonderful. Right now we have to stop making it the future.

g.younge@guardian.co.uk



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