Issues relating to Food, Globalization and Fair Trade

• WTO conference in HK Dec 2005
• 1999 Seattle Third Ministerial meeting protest (60000)
• 2003 Cancun protest
• South Korean rice farmers clashed with police Nov 2004

Very generally, "globalization" refers to international economic integration that is under increasing acceleration these days, and the accompanying social, cultural and environmental changes.

• Integrated international trade and financial markets
• Transnational corporations
• Cross-border division of labour (e.g. outsourcing)
• Global sourcing of raw materials

Globalization, Agricultural Subsidies and Dumping

The case with EU's sugar

• EU is the world's second-biggest sugar exporter.
• But it does not have the right climate for growing cane sugar.
• Growing sugar in Europe is not economically efficiently: producing a pound of sugar in the EU is more than six-times higher than in Brazil, says Oxfam.
• EU governments pay about HK$20 billion a year to subsidize sugar production.
• The problem : So much sugar is produced that the stuff is exported to poor countries, hurting farmers who relied on producing sugar for a living.
• Costs : Brazil loses around HK$4 billion a year, and Thailand about HK$ 1 billion, even though they are the most efficient sugar producers in the world. The costs to Ethiopia equal the sums it spends on HIV/AIDS programmes.
• Who wins? Large European sugar refiners. France's Beghin, Germany's Sudzucker, Britain's Tate & Lyle.
• Good news : WTO ruled that EU over-produced. (sept 2004)

• http://www.maketradefair.com/en/index.htm

Free trade = Fair trade? Supermarkets in HK

• Hong Kong is the world's freest economy according to the US Heritage Foundation (See their index of economic freedom).
• VIQ #1 : Is HK really that free?
• VIQ #2 : Does a free economy guarantee fair competition in Hong Kong?
• According to the 1996 Consumer Council report on competition policy, "the Consumer Council found a low level of competition in several sectors, eg, bank deposits, supermarket sales and gas supply."
• See also the 2003 report "Competition in the FoodStuffs and Household Necessities Retailing Sector Findings and Recommendations" on the disappearance of wet markets (and the HK Govt's response) . This mirrors the demise of mom and pop shops in other countries when big retailers move in.
• The case of Admart in 2000 vs Park'n Shop and Wellcome. (See also Economist : "In a Few Hands" on competition in HK)
• Article from Financial Times on lack of competition in HK
• All is fair in trade?
• Recommendations from the Consumer Council:

  Prohibit explicit agreements between firms that are intended or have the effect of preventing, restricting or distorting competition. These include horizontal agreements such as those involved in price-fixing cartels, bid-rigging, etc and vertical agreements such as retail price maintenance, exclusive dealership, tie-in sales, long-term supply contracts, etc.

  Prohibit any abuse by one or more undertakings of a dominant position that prevents, restricts or distorts competition. This would address monopoly pricing, and vertical restraints such as tie-in sales enforced through market dominance.

• Issues relating to philosophy, economics and law.

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