Free Trade, Food & the WTO POL S 422 Lec 17 "Ecology and the Global Economy" Free Trade, Food & the WTO International economic institutions WTO Agreement on Agriculture Subsidies & developing countries WTO food rulings International food standards Fair trade POLS 385 Lec 6

Bretton Woods Institutions “Peace through Prosperity” POL S 422 Lec 17 "Ecology and the Global Economy" Bretton Woods Institutions “Peace through Prosperity” World Bank: long-term infrastructure development IMF: primarily short-term currency loans GATT: “free trade” Applied to manufactured goods WTO (1995): replaced GATT Includes agriculture, finance, service Goal of sustainable development Binding dispute settlement panels POLS 385 Lec 6

Three Types of Agricultural Protection Domestic support Price supports and direct subsidies paid by the government to farmers Can encourage overproduction and drive down world prices Market access Restricting foreign imports, usually through high tariffs or quotas Export subsidies Government funding to exporting firms - Suppresses global prices, increases domestic consumers - The most trade distorting type of protection POLS 385 Lec 6

Agreement on Agriculture (1995) POL S 422 Lec 17 "Ecology and the Global Economy" Agreement on Agriculture (1995) 1) Domestic support (subsidies) Subsidies to be reduced but not eliminated Unlimited subsidies linked to production-limiting programs EU & US subsidies total $380 billion/year 2) Market access Reduction in tariffs: more and faster for IC’s 3) Export competition Reduce subsidies on exports POLS 385 Lec 6

Why agriculture matters to DCs Portion of GDP as Agriculture Source: World Resources Institute 2007 POLS 385 Lec 6

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Doha Round (2001-present) “Development Round” Agriculture - top issue G-20, led by Brazil & India, counters U.S. & E.U. Split between G-20 and G-90 US wants EU to cut tariffs EU & DCs want US to cut subsidies WTO on Brazil-U.S. cotton dispute: US must cut subsidies (2004) Africa “Cotton Group” wants cotton outside AoA Oxfam Under AoA, 97% of benefits go to rich & middle-income countries Intellectual property rights: #2 issue Medicines, biotech POLS 385 Lec 6

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Key WTO Agriculture Rulings POL S 422 Lec 17 "Ecology and the Global Economy" Key WTO Agriculture Rulings 1998 Shrimp-Turtle case (U.S. vs. Asia) U.S. cannot require turtle excluder devices U.S. vs. E.U. EU cannot favor indigenous (often organic) farmers in former colonies over Chiquita & Dole bananas (1998) EU must allow GM food (2006) EU labels it, US challenges this EU must allow U.S. beef injected with growth hormones EU paying fine compensation (2008) No country-of-origin labels for meat (2012) Canada & Mexico vs. U.S. Meat packers say COOL labels violate free trade Obama administration will appeal POLS 385 Lec 6

Bali Ministerial Declaration (2013): “Trade Facilitation” Streamlines customs process, especially in DCs Intended to reduce bureaucracy & corruption Protects public food security programs in DCs Allows more DC support through stock buy-in Import quota reform: U.S. excluded itself ALL COMMITMENTS ARE NONBINDING POLS 385 Lec 6

Codex Alimentarius Commission POL S 422 Lec 17 "Ecology and the Global Economy" Codex Alimentarius Commission Sets international food standards Joint body of FAO & WHO “ to protect consumer health & ensure fair practices in food trade” Voluntary guidelines Membership growing After 1995, Codex guidelines “semi-binding” WTO mandate on agriculture Regulations must be least trade restrictive, based on science and, where available, on intl. standards GM labeling under study since 1997 2011: OK’d but not mandated POLS 385 Lec 6

Fair Trade .Certification requires transnational connections Small producers must band together in cooperatives FairTrade Intl (FLO), Equal Exchange, Rainforest Alliance…. Connections to HR NGOs & govt agencies World Free Trade Organization Global Exchange Tensions: rebranded FairTrade-USA Organic Consumers Assoc: “fair trade a movement, not a brand” FairTrade-USA leaves FLO to work with big producers POLS 385 Lec 6

POL S 422 Lec 17 "Ecology and the Global Economy" Rapid growth but only 3.5% of US coffee imports are fair trade. Source: Center for Popular Economics POLS 385 Lec 6

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Questions to Consider Is the WTO incompatible with food sovereignty? How might the WTO be reformed to encompass food justice and sustainability? What are the benefits and shortcomings of fair trade? Can ethical consumption guarantee justice? POLS 385 Lec 6