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Global Issues: Trade, Hunger and Poverty

 Trade relations between developed and developing countries are structured in favor of the developed countries: the United States and Canada, countries of Western Europe, and Japan. This is because some of the developed countries have been in charge of making the rules for a very long time--since before the 1700's. The way that the rules are made have certainly changed.  At one time, Spain with colonies and control of the seas, established the rules. Later, Great Britain took control of the seas, had colonies and did the same thing. (For example, Great Britain had colonies and defined (limited) how the United States and other nations could trade with these colonies.)  Now we have the World Trade Organization, quite a number of regional or specialized trade agreements, and the operation of country legal systems, which can be used to enforce business practices such as contracts and patents.

This page, concerned with trade issues in 2009, deals with the following topics:

(2008 articles are included when there are not 2009 developments in these topics.)

WTO  After World War II the General Agreement on Tariffs and Trade (GATT) was established to set rules for international trade.  The successor to the GATT is the World Trade Organization.  It was established, in Hunger Notes view, in large part so that developed countries could extend their control of international transactions into key new areas, especially including intellectual property rights (e.g. Microsoft didn't want people in developing countries copying computer code) and foreign investment (by developed countries in developing countries. While legal safeguards were presumably in place to protect these property rights in developing countries, this was viewed as not sufficient.  Much better--from the point of view of firms in developed countries and their active supporters, developed country governments--to make the right of trade dependent on compliance with a broad range of controls embodied in the "new and expanded" WTO.  This would mean "one stop shopping" with respect to rules enforcement.  While the developed countries are ostensibly in favor of free trade--free trade is a mantra with the George Bush administration and Republican law makers for example--developed countries are not in favor of free trade when it does not suit their interests.  The key example is agriculture.  The United States, Japan, and European countries have giant agricultural subsides and even quota limitations--the U.S. sugar quota is a major example.   How do they get away with it?  Well of course they wrote the original WTO rules which provide for "differential treatment" for agriculture. The Doha round of trade negotiations is supposed to take major steps to reduce barriers to the export of developing country agricultural products.  Developed country governments do not much want to do this, and so a major theme in recent years has been a struggle over agricultural trade rules, where the developed countries have essentially stonewalled attempts to reduce subsidies. 

Major economies square off over global trade deal (the WTO Doha round). South Africa calls for immediate cuts in US cotton subsidies that make it impossible for poor African cotton farmers to compete and that are in violation of WTO trade rules Jonathan Lynn and Laura MacInnis Reuters Africa December 1, 2009 

African producers may litigate over US cotton subsidies Reuters Africa December 1, 2009

Brazil wins cotton war, but the US cuts no subsidies Ann Crotty Business Report December 2, 2009

Cleaning house at the WTO: the US and other developed countries continue to defend their own interests rather than addressing the development concerns of poorer countries (opinion) Kevin Gallagher and Timothy Wise The Guardian.co.uk December 1, 2009

European farm subsidies go to more than just farmers Doreen Carvajal and Stephen Castle New York Times  July 16, 2009 

WTO negotiator receives praise in India for his efforts to protect Indian farmers  Rama Lakshmi Washington Post August 1, 2008 (You will leave this site.)

Trade talks failure end Doha dreams--Africa not represented in trade talks inner circle David Loyn BBC News July 29, 2008

World trade talks break down over agricultural developed country reluctance to cut agricultural subsidies; developing country reluctance to give up tariffs on food Keith Bradsher New York Times July 30, 2008 (You will leave this site.) Deal still elusive at trade talks BBC News July 28, 2008 (You will leave this site.)

Conflict with farmers takes toll on Argentina. Farmers lead major protests against increased agricultural export tax, designed to increase government revenue and keep more agricultural products in Argentina, but which also decreases farmers' income. Alexi Barrioneuevo  New York Times June 24, 2008 (You will leave this site.)

At 15,000 feet, Mount Toromocho, 86 miles  from Lima, is comparable to any mountain in Europe. It gets its name from its shape - The Bull With No Horns. And it is composed almost entirely of copper ore: two billion tons of it. It could become the most productive copper mine anywhere on earth. Now it belongs, in effect, to China. Photo: BBC

At 15,000 feet, Mount Toromocho, 86 miles  from Lima, is comparable to any mountain in Europe. It gets its name from its shape - The Bull With No Horns. And it is composed almost entirely of copper ore: two billion tons of it. It could become the most productive copper mine anywhere on earth. Now it belongs, in effect, to China. Photo: BBC

Peru's copper mountain in Chinese hands John Simpson BBC News June 17, 2008 (You will leave this site.) 

Sweetheart deal: the latest farm bill outrage is a plan to prop up sugar producers (opinion) Washington Post May 6, 2008 (You will leave this site, be required to register once with the Post, and thereafter sign in using your email address.)

Presidential candidates on trade  Americas Policy Program April 7, 2008

Trade ministers promise Doha round push BBC News  January 26, 2008 (You will leave this site.)

Other trade agreements  There are other trade agreements, often regional, such as the Central American Free Trade Agreement (CAFTA). European countries are also negotiating regional trade agreements. To Hunger Notes, the regional trade agreements seem to be a case of "divide and conquer"--get better terms by negotiating with a subset of developing countries rather than, as in the WTO, the larger group.  Certainly in CAFTA, the United States got Central American countries (and the Dominican Republic) to sign off on a modest increase in their U.S. sugar quotas rather than quota abolition. 

Time to renegotiate NAFTA, not expand it (Opinion) Representative Marcy Kaptur (United States), Senator Yeidckol Polevnsky (Mexico), and Peter Julian, Member of Parliament (Canada) May 2, 2008

Leaders of Mexico and Canada back President Bush on trade Steven Lee Myers New York Times April 23, 2008 (You will leave this site.) 

Bush concedes defeat on Colombia trade pact Dan Eggen Washington Post April 15, 2008 (You will leave this site, be required to register once with the Post, and thereafter sign in using your email address.)    Democrats seek delay on Colombia trade pact Paul Kane and Dan Eggen Washington Post April 10, 2008 

In US, proposed trade deals with Colombia, Panama, and South Korea face strong resistance Anthony Faiola Washington Post February 15, 2008 (You will leave this site, be required to register once with the Post and thereafter sign in using your email address.)

US Senate passes Peru trade pact. Oxfam says the agreement to expose Peru's small farmers to "massive dumping" of subsidized US farm goods. BBC News  December 5, 2007 (You will leave this site.) See Oxfam statement

Realigning representation on global organizations

The  principal international institutions, including the International Monetary Fund (IMF), the World Bank and the World Trade Organization, allocate power within these institutions on the basis of economic and political power. This marginalizes/disenfranchises poor countries and poor people.  In the IMF, for example, voting power is based on economic strength calculated many years ago.  Even though economic strength (size of economies) has changed greatly in the intervening years, voting power in these international institutions has not changed to reflect these changes.  Much less has it changed towards a  more democratic ideal--one country, one vote (a la the U.S. Senate), or proportional voting by population.  The control of these institutions greatly helps the developed countries impose their will on other countries--for example through sanctions or through the granting or withholding of loan approvals. Minimal progress has been made in realigning representation to these organizations.  Perhaps the major change has been that, due to increasing prosperity in developing countries, the IMF and the World Bank are needed less.

G-20 to replace G-8 as major economic forum--China, India, Brazil and South Africa will now be included  Annys Shin and Michael D. Shear  Washington Post September 25, 2009

G-20 to increase developing country voting power in the International Monetary Fund by about five percent (barely addressing the vast power of developed countries in the IMF) Xinhua September 25, 2009

Workers extract gold at a mine in Ghana, a country whose growing wealth has allowed it to rely less on the International Monetary Fund. Photo: Olivier Asselin/Associated Press)

Workers extract gold at a mine in Ghana, a country whose growing wealth has allowed it to rely less on the International Monetary Fund. Photo: Olivier Asselin/Associated Press)

As global wealth spreads, the IMF recedes Anthony Faiola Washington Post May 24, 2008 (You will leave this site, be required to register once with the Post, and thereafter sign in using your email address.)

The forced resignation of Paul Wolfowitz as president of the World Bank has highlighted the fact that in an unwritten deal (a 'gentlemen's agreement'), the United States gets to select the president of the World Bank while the European nations get to select the managing director of the International Monetary Fund. Similar deals appear to hold in the United Nations, where the United States appears to be able to select the head of UNICEF, among others.  Not democratic.

United States nominates Robert Zoellick, former U.S. trade representative, as new World Bank president. Election is assured as 'that is the way its done.'  BBC News  May 30, 2007 (You will leave this site.)  See our commentary Announcing the candidacy of Muhammad Yunus to head the World Bank

The following articles describe and evaluate the voting reform efforts in the IMF.

Still the rich world's viceroy.  If the IMF wants to reform itself, why not try democracy? George Monbriot (Op ed. You will leave this site.)  Four developing countries to have International Monetary Fund voting rights increased; major voting inequities remain  Paul Blustein  Washington Post September 1, 2006 (You will leave this site and be required to register [once] with the Post.) Reform on the cards for the IMF  Malcolm Borthwick  BBC News August 11, 2006 (You will leave this site.)

 Intellectual property rights

The following articles give fairly clear examples of how the current trade and legal system can lead to injustice.  Trademarks, in these cases, and patents in others (in the case, for example of patenting of traditional herbal remedies or crop varieties), are used to appropriate the good name and knowledge of others. A similar phenomenon was called 'claim jumping' in the American west.  See Wikipedia intellectual property and also genetically modified organisms (GM0s).  Genetically modified plants can be patented, and charged for, which can threaten the livelihoods of small farmers.

Anti-trust scrutiny for Monsanto: Patented seeds are go-to for farmers, who decry their fast-growing price Peter Whoriskey Washington Post November 28, 2009

Seeds of trouble: the top-10 agricultural biotech firms in developed nations control 67% of the global proprietary seed market Latha Jishnu Business Standard (New Delhi) October 29, 2009

Current intellectual property rights, especially those for GMO seeds, threaten poor farmers, food security and the right to food  United Nations October 21, 2009 

Johnson & Johnson (US company) sues American Red Cross over use of Red Cross emblem! IRIN August 24, 2007 (You will leave this site.)

Starbucks agrees to surrender copyrights on Ethiopian coffee names to Ethiopia BBC News  June 21, 2007 (You will leave this site.)  Starbucks and Ethiopia on the verge of coffee trademark deal Oxfam May 3, 2007 Ethiopia tries to trademark its coffees in the European Union, in the face of opposition from Starbucks Tarjei Kidd Olsen IPS News April 3, 2007 Ethiopia and Starbucks talks fail  BBC News  November 30, 2006 (You will leave this site.)  Ethiopia tries to trademark the names of its most famous coffees/coffee regions but Starbucks resists, as it has already applied for the same names in the United States  Aaron Glantz OneWorld   December 2, 2006    Starbucks in Ethiopian coffee dispute. U.S. coffee chain Starbucks is denying Ethiopia earnings of $88 million a year, according to Oxfam. BBC News  October 26, 2006 (You will leave this site.)

Kenyan activists fight to retain cultural designs that have been developed in East Africa but are being patented by companies in rich countries. After losing the kiondo basket trademark to Japan, the popular kikoi fabric design is currently at risk of being patented by a British company.  Joyce Mulama IPS News March 30, 2007

More complicated issues are involved with intellectual property rights. The following article gives a flavor of the intellectual property debate. China slams U.S. piracy complaint BBC News  April 10, 2007 (You will leave this site.)  What is piracy in this case?  Is it robbery of a ship on the high seas? No, it is using someone else's ideas. 

When do ideas become the 'intellectual property' of a person or corporation? Almost all our knowledge is based on the knowledge of others.  We rely on English and other languages to communicate.  Languages are certainly a powerful tool, developed by others. The sermon on the mount certainly did a lot of good. Mathematics? Developed by others! Most good ideas that we use are developed by others and also not charged for. There is an extremely large cultural and intellectual  heritage of the human race. Why then  is it permitted that some may charge for their ideas and, if not paid, restrict the use of their ideas?  We take it as a fact that someone, if they get a patent, are able to charge others for the use of that patent.  It is a fact (of our current situation) but it is a cultural artifact, and actually was extensively debated with the founding of patent systems, which have as a key feature  patent protection offered by the legal system. And enforced by the legal system. Humans will work to develop good ideas without the protection of the patent system.  Newton developed the laws of gravity and motion without the need for patent protection, for example. The idea in offering patent protection, always thought of as protection for a limited term, was that patent protection would spur invention and technological change. But the central idea in the development of patent law was how to promote overall human welfare, not to just secure advantages for a few.  When developed countries seek to apply patent protection for their new ideas in developing countries, the idea of patent protection must be considered in terms of its overall human usefulness.  The market for drugs in developed countries may well be sufficient to lead to the development of new drugs; if so, why should very poor people in developing countries have to pay a royalty fee to use these drugs?  Our automatic response is --if you get a patent--then you can charge or prohibit use of the information patented. But the deeper question is: what system of patent arrangements will best promote human welfare?  This is compounded when developed country firms, backed by their governments, try to strengthen their position.  For example, U.S. firms in China (or any other country), faced with piracy, have the option to pursue this through the Chinese (or any other country) legal system. Instead firms, backed by developed country governments, have successfully established intellectual property rights in international trade law.  This permits them to ratchet up enforcement and  sanctions enormously, using not normal country legal systems, but the international trade system, which countries must participate in, or lose the benefits from trade.

Brazil to break AIDS drug patent BBC News  May 4, 2007 (You will leave this site.)

Supreme Court rulings weaken patents' power--'obvious' advances not patentable Robert Barnes and Alan Sipress Washington Post  May 2, 2007 (You will leave this site and be required to register [once] with the Post.)

Other

One third of children in Sikasso are underweight for their age, and for acute malnutrition, the rate in Sikasso was 16 percent, according to the most recent government survey. Photo: Phuong Tran/ IRIN

One third of children in Sikasso are underweight for their age, and for acute malnutrition, the rate in Sikasso was 16 percent, according to the most recent government survey. Photo: Phuong Tran/ IRIN

In Mali's richest region, Sikasso, malnutrition is as high as in the country's barren north, due in large part to  concentration on cash crop, export-oriented production in the rich region IRIN News December 29, 2009

A new megafarm in Western Ethiopia, for palm-oil trees, sugar cane, rice and sesame.  All through the Rift Valley region, there are new fence posts signifying the recent rush for Ethiopian land. In the old days, farmers rarely bothered with such formal lines of demarcation, but now the country’s earth is in demand. One fence stretched on for a mile or more, very possibly belonging to Sheik Mohammed Al Amoudi, a Saudi Arabia-based oil-and-construction billionaire who was born in Ethiopia and maintains a close relationship with the Ethiopian Prime Minister Meles Zenawi’s autocratic regime.  Photo: Simon Norfolk/New York Times

A new megafarm in Western Ethiopia, for palm-oil trees, sugar cane, rice and sesame.  All through the Rift Valley region, there are new fence posts signifying the recent rush for Ethiopian land. In the old days, farmers rarely bothered with such formal lines of demarcation, but now the country’s earth is in demand. One fence stretched on for a mile or more, very possibly belonging to Sheik Mohammed Al Amoudi, a Saudi Arabia-based oil-and-construction billionaire who was born in Ethiopia and maintains a close relationship with the Ethiopian Prime Minister Meles Zenawi’s autocratic regime.  Photo: Simon Norfolk/New York Times

Is there such a thing as agro-imperialism?  Andrew Rice New York Times November 16, 2009 For further information on the takeover of developing country land by developed country investors see the Grain website.

Lakshmi H.S., 19, checked medical records at a Rural Shores outsourcing center in the Indian village of Bagepalli, where she has worked for the last six months. Photo: Lynsey Addario/New York Times

Lakshmi H.S., 19, checked medical records at a Rural Shores outsourcing center in the Indian village of Bagepalli, where she has worked for the last six months. Photo: Lynsey Addario/New York Times  More photos

Rural Indian workers, earning $60 a month, get a chance to do work outsourced from the United States Lydia Polgreen New York Times November 12, 2009

Energy from the Sahara plants is expected to supply Europe by 2015. Photo: BBC

Energy from the Sahara plants is expected to supply Europe by 2015. Photo: BBC

Sahara sun, via a proposed huge solar project, will help power Europe  BBC News November 2, 2009

 

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