Key Idea 4 – International Trade and Aid have contributed to contrasting stages of Economic Development.

Pattern of World Trade … Historic from colonialism

Typically trade pacts that define such a bloc specify formal adjudication bodies, e.g. NAFTA trade panels. This may include even a more democratic and participative system, as the EU and its parliament. A trade bloc is a large free trade area formed by one or more tax, tariff and trade agreements.

The blazing row between the European Union (EU) and the United States over bananas has its genesis in a dispute over EU tariff duties and import quotas levied against exporters to the region. The argument centres on the preferential treatment the EU gives to banana producers from former African, Caribbean and Pacific colonies at the expense of Latin American growers and their US backers. Aim - to protect the economy of the former colonies that grow bananas. Caricom…

… the long running dispute over the marketing of bananas in Europe, and increasing competition among giant supermarket chains, that has driven down the prices paid to small farmers in the Caribbean, Latin America and West Africa.

Tends to be INFORMAL EMPLOYMENT – jobs without proper terms and conditions, no health and safety features, no tax paid etc. e.g. Jua Kali workshops in Kenya Appropriate Technology Labour intensive sustainable

Large scale … capital intensive schemes Transnational corporations – foreign investments e.g. Lafarge Cement Company (France) in Bamburi cement works (Kenya)

Alternative ways of providing aid to reduce the inequitable world trade system.

Fair Trade… More of the price paid goes to the producer