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
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.