Trade Flashcards
Nartey
Found that a 5% increase in exports by the majority would would generate 300 billion in Africa alone and 1% would create 70 billion.
Asia increased profits
Over the past 50 years because they turned to manufacturing but this increase has not helped the whole of south but in fact halved african market shares.
Modernisation
Positive about trade, it should be encouraged to get out of the cycle of poverty. (Parsons rostow)
Critismisms
Neolib
Positive about trade, free market, smith
want SAP
Criticisms
Dependency
Critical of it, explorations, neo-colonialism
wealth does no trickle down.
Problems with trade
Over-competition means nations that produce similar things the value falls.
Monoculture they rely on one crop only such as Zambia 70% copper, so vulnerable if trends change or crops fail.
Cocoa Farming - Ghana
produced 1/3 worlds cocoa but price fell and had to plant crops to feed families. Relied on tax revenues so found in economic troubles has to accept SAP, at the time west were putting less cocoa in chocolate.
International Coffee Agreement
Is a treaty which insure that coffee prices would not fall between one dollar collapsed. This intern led to a massive drop in income of the crop.
Hayter
Highlights that faced with a downward spiral income majority world nations and producers have been forced to compensate by increasing productions.
People centred
People centred trade recognised problems such as reliance on mono cultures lack of bargaining power and unfair global trade rules.
Cooperatives
Formation of cooperatives is individual producers who grouped together for mutual benefit had advantages such as strength in numbers and economic of scale meaning working together results in more goods.
Fair trade
This is now an established brand which certifies both producers and importers- but only when certain social and environmental standards are met. Is also set a minimum guaranteed price which should be paid for the commodities. There is also a “social premium” this is then used to fund community improvements such as schools.
Balance between neolib and dependency
On one hand it acknowledges the importance of trade but recognised the unfair terms and attempts to find a constructive way forward.
Unfair trade
However in order to be certified as their trade producers need to pay $2000 and a further €500 subscription each year. Critics have therefore argued that the scheme is exclusive very poorest producers are out of the scheme.
Hijacked
Finally some critics have highlighted that actually has been hijacked. Corporations such as Starbucks had been able to obtain certification, despite only importing 6% of their produce from ethical sources. this is known as “social washing”
