Global Issues: Trade and Investment and 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 deals with the following topics:
(Articles from past years are included when there are not 2011 developments.)
Obama ends G-20 summit with criticism of China Sewell Chan New York Times November 12, 2010
US warns China on currency policy William Branigin Washington Post October 6, 2010
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 previous 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.
In China, human costs are built Into an iPad Charles Duhigg and David Barboza New York Times January 25, 2011
World Trade Organization "must address" food security IRIN News December 23, 2011
Developing countries out in the cold at the World Trade Organization Ravi Kanth Devarakonda AllAfrica.com October 14, 2011
WTO fails the poorest again: the World Trade Organisation fails in the Doha trade talks to deliver even a minimal package to benefit the least developed countries (opinion) Ruth Bergan Poverty Matters Blog July 29, 2011
Farm subsidies become target amid spending cuts Jennifer Steinhauer New York Times May 6, 2011 Who pays for US and European agricultural subsidies? Farmers in developing countries Timothy A. Wise Tufts University August 19, 2010
There are other trade agreements between the United States and other countries. These include the North American Free Trade Agreement (NAFTA)(Wikipedia NAFTA), the Central American Free Trade Agreement (CAFTA)(Wikipedia CAFTA-DR the African Trade and Development Act, and the Generalized System of Preferences (GSP) (Wikipedia GSP). European countries also have negotiated trade agreements with other countries.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. Trade agreements typically also include provisions for the fair treatment of labor/labor rights. (Wikipedia, Labor rights)
Trade with developing countries just got more expensive, thanks to Tom Coburn Lydia DePillis Washington Post August 12, 2013 See Wikipedia, the Generalized System of Preferences.
US suspends Bangladesh’s trade privileges due to labor concerns Katerina Sokou and Howard Schneider Washington Post June 27, 2013 Cheap, trendy ‘fast fashion’ in demand, despite factory dangers Cara Kelly Washington Post June 28, 2013
US unions press to end special trade status for Bangladesh Ian Urbina New York Times May 30, 2013 ILO, World Bank demand labor changes in Bangladesh Howard Schneider Washington Post May 18, 2013 Standards clash in Bangladesh reforms Christina Passariello, Shelly Banjo and Gordon Fairclough Wall Street Journal May 16, 2013 See Hunger Notes special report Trade and Hunger
US and Mexico reach deal to increase tomato prices Stephanie Strom New York Times February 3, 2013
Congress passes trade agreements with South Korea, Colombia and Panama Zachary A. Goldfarm and Lori Montgomery Washington Post October 12, 2011
Colombia agrees to protect unions Howard Schneider and Juan Forero Washington Post April 7, 2011 US-Colombia trade pact faces hurdles--key Democratic legislator says. Colombia needs significant improvement in labor rights and worker protection Howard Schneider Washington Post March 30, 2011
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.
Jim Yong Kim secures World Bank job amid criticism of US domination of role. Seoul-born Kim beats Nigerian finance minister Ngozi Okonjo-Iweala, who said the decision was not made on merit. Dominic Rushe The Guardian April 16, 2012 Challengers for World Bank leadership ask for ‘a fair chance’ Howard Schneider Washington Post April 30, 2012 Jim Yong Kim, Dartmouth College president, tapped by Obama to head World Bank Howard Schneider and Zachary Goldfarb Washington Post March 23, 2012
International Monetary Fund criticized for very conservative governance reform: China, Brazil, India and Russia receive some increased voting power, while most developing counties had their voting power reduced, and European countries keep their disproportionate voting power Matthew O. Berger IPS December 8, 2010
US wants Europeans to give up IMF board seats, but does not want to give up its own veto rights (opinion) Washington Post October 3, 2010
The following articles give fairly clear examples of how the current trade and legal system can lead to injustice. Trademarks, in these cases, and copyrights or 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.
Unapproved genetically modified wheat from Monsanto found in Oregon field Steven Mufson Washington Post May 30, 2013 Monsanto shares fall as South Korea joins pause in wheat imports Steven Mufson Washington Post May 31, 2013 Seeking food ingredients that aren't gene-altered Stephanie Strom New York Times May 26, 2013
Supreme Court rules for Monsanto, says farmer violated genetically modified soybeans’ patent Robert Barnes Washington Post May 13, 2013 Farmer’s use of genetically modified soybeans grows into Supreme Court case Robert Barnes Washington Post February 9, 2013 See Hunger Notes special report Trade and Hunger
Nepal’s Monsanto debate spotlights seed sovereignty IRIN News January 12, 2012
Indian government agency fights US companies trying to copyright their versions of yoga. Yoga is ancient collective knowledge and should be available for use by anyone, agency says Emily Wax Washington Post August 23, 2010
La Via Campesina issues call to action to stop development and commercialization of 'terminator' seeds La Via Campesina July 28, 2010 See Hunger Notes special report Trade and hunger, especially the section on intellectual property rights
Plumpy'nut is one of the most widely distributed ready-to-use therapeutic foods (RUTF), given to children suffering from malnutrition. The patents for Plumpy'nut - a blend of peanuts, sugar, milk powder, oil, vitamins and minerals - are owned by a French company and a research institute. Manufacturers of similar pastes have been reluctant to challenge Nutriset because the patents are so broad, but two US companies just have, saying there should be "no restrictions on the development and production of life-saving food aid". Photo: Georgina Cranston/UNICEF
Plumpy'nut--a cure for childhood malnutrition? Andrew Rice New York Times September 2, 2010 Plumpy'nut patent under pressure IRIN News January 12, 2010 See also Birthplace of an innovation saving the lives of starving children--a blender in Malawi IRIN News June 22, 2007
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.)
Sugar industry highlights conflicts over trade policy and land Keith Bradsher New York Times September 30, 2013 Consider supporting the Oakland Institute's work in combating forced evictions and corporate land grabs in developing countries.
We don't have life without land: Holding ground in Honduras Tory Field and Beverly Bell Co-author Lauren Elliot Other Worlds August 11, 2013 Without our land we cease to be a people: Defending indigenous territory and resources in Honduras Tory Field and Beverly Bell Other Worlds August 18, 2013 They fear us because we are fearless: Reclaiming indigenous lands and strength in Honduras Tory Field and Beverly Bell Other Worlds August 27, 2013
Sierra Leone's smallholder farmers 'worse off' after large land deals. Push to lure foreign investors has led to a rise in social problems, sparking fears of a return to conflict, NGO warns Mark Tran Guardian July 26, 2013 More on land deals in developing countries from The Guardian and the Oakland Institute.
US firm forced to delay $350 million Cameroon plantation project Yuh Timchia Africa Review May 22, 2013
Clashes over land seizures batter the police in Myanmar Thomas Fuller New York Times February 28, 2013
Biofuel production pushes farming communities off land - report Chelsea Diana AlertNet February 28, 2013
Indian investors are forcing Ethiopians off their land. Thousands of Ethiopians are being relocated or have already fled as their land is sold off to foreign investors without their consent. John Vidal The Guardian February 6, 2013 See report
The global farmland rush Michael Kugelman New York Times February 5, 2013
Cameroon: Campaigners oppose industrial palm oil plantations IRIN News December 14, 2012 Curbing Tanzania's land-grabbing race Orton Kiishweko Inter Press Service December 19, 2012
Large scale farmland acquistion in African countries threatens African food security and farmers, new UN study says Center for International Forestry Research February 2012 See report Analysis: Land grab or development opportunity? BBC News February 21, 2012 GRAIN releases data set with over 400 global land grabs GRAIN February 23, 2012
Ethiopia at the center of global farmland rush that has put 86 million acres in foreign hands, shutting out small farmers John Vidal The Guardian March 21, 2011
Raimundo Teixeira de Souza held the residents’ card of his stepson who was killed, probably in a land dispute. Teixeira de Souza was forced to sell his land for a pittance to more powerful farmers, who roam this Wild West territory with rifles strapped to their backs. Photo: André Vieira/New York Times
Trade agreement kills Amazon Indians Laura Carlsen Center for International Policy January 10, 2010 Land grabs widespread in lawless Amazon region of Brazil--government now trying to impose greater order Alexi Barrionuevo New York Times December 26, 2009 Growing demand for soybeans threatens Amazon rainforest Lester R. Brown Earth Policy Institute January 10, 2010 Also see Hunger Notes special report: Hunger, the environment and climate change
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
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.
Chiquita merger reignites fears of a disappearing banana crop Marisa Taylor Al Jazeera America March 10, 2014 Crop diversity decline threatens food security Mark Kinver BBC News March 3, 2014
Plan at G-20 is to tighten global rules on taxes Andrew E Kramer New York Times September 5, 2013 G20: how global tax reform could transform Africa's fortunes (Opinion) Kofi Annan The Guardian September 5, 2013
We must change global tax system to insure that poor countries get a fair share—OECD. OECD official says rich countries should demand transparency from multinationals and stop cash passing through tax havens. Marc Tran The Guardian April 5, 2013
Fair Trade having enforcement difficulties in growing $6 billion market Simon Clark and Heather Walsh Bloomberg News December 28, 2011 See also Fair Trade Wikipedia
Tiny tax on financial trades gains advocates Steven Greenhouse and Graham Bowley New York Times December 7, 2011