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Impact of the wto
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Chiquita Brands International Inc. is best known as the world’s number one distributor of banana’s, which account for more than half of its sales. For the past decade, Chiquita’s sales have dropped dramatically and the company is now on the verge of bankruptcy. Currently, Chiquita is trying to avoid filing for a Chapter 11 by attempting a major financial restructuring of their debt. There are many factors that have contributed to the company’s downward spiral, although all of these factors are linked to the trade barriers imposed by the European Union on banana imports. The European Union enacted import restrictions on banana’s in 1993, and just recently, is attempting to revise the old regime in order to comply with the World Trade Organization. The EU is preparing to introduce a new import system dubbed “first-come first-served” which they believe will be a WTO compatible system. Chiquita filed a lawsuit in January, 2001 against the European Union seeking reparations in the amount of $525 million for their losses that resulted from the old biased import system (Palmer). Chiquita is just one of many companies that were affected by this biased import regime, but some other companies still managed to work around the import restrictions. Chiquita’s rivals, Dole Food and Fresh Del Monte, although bruised as well by the European restrictions and falling banana profits, are in much better shape. Both have managed to increase their market share in Europe, largely at Chiquita’s expense (Alden). Chiquita, however, sought out and fought a political battle against the European Union with the United States government backing them.
The old EU import regime was not only an issue for the companies involved, but for the United States as a whole, since it affected banana’s and other agricultural products sold in the US. The regime initially was enacted in 1993, and was later ruled in 1997 to not be in compliance with the World Trade Organization (PR Newswire). The regime was designed in part to protect less efficient banana growers in former European colonies. Chiquita’s management has complained for years that the policies of the EU have cost the company millions by favoring banana’s from Caribbean producers in former European colonies. The EU’s rules were judged to discriminate in favor of growers in EU territories and the Caribbean at the expense of Latin American producers and U.
In order to right the ship that is America’s food industry, we need to recognize the monopolies in the U.S food industry. These massive food conglomerates must be broken up in order to create competition in the market. This will allow the completion to dictate the market. More companies means more competition, and when companies compete, the consumer wins.
Unfortunately, not everyone involved in the production of this popular sweet benefits. Today, over 70 percent of the world’s chocolate is exported from Africa (“Who consumes the most chocolate,” 2012, para 10). While chocolate industry flourishes under international demand, the situation in Côte d’Ivoire in particular illustrates dependency theory and highlights the need for the promotion of Fair Trade. Chocolate has had a considerable impact on the country’s economic structure and labor practices.
When the outbreak of the Panama disease began the United Fruit ordered their field workers to put disinfectant on their tools and clothing in order to decrease the spread of disease. They burned the diseased plants, which took care of the infected bananas, but companies still had problems with workers transferring diseases. Spreading the disease was not intentional but it happened. This lead the United Fruit to begin research programs to fight the disease in 1923 so that it did not worsen. The US department of agriculture had argued the cultivation a disease resistan species would have a higher success rate, for example, the “Chinese banana.” This fruit has a short shelf life though and was not very marketable to be purchased. So the US and British research program both began breeding programs to develop disease resistant varieties, but sadly this was not successful either. It was difficult to find a product that would work, biology did not work, farms kept moving to healthier land, and this created schisms among companies and the government. The diseases were driving the production costs and soil exploitation up, fruit companies were already under public scrutiny for their land grabs and extensive holdings. They all needed a solution; the solution was when the Cavendish bananas began to be boxed in production, which then opened jobs for women. All of the bananas traveling to the
My organization, Trader Joe’s, is not an international business. Their stores are all located in the United States; therefore, I chose Whole Foods, who is a main competitor of Trader Joe’s for this assignment.
Rendón, Dr. Oscar Hugo Pedraza. “Quality of the Avocado Exporting Companies to the United States of America,” World Avocado Congress. Abstracts A-48 V. 2003.
John Soluri 's Banana Cultures Agriculture, Consumption and Environmental Change in Honduras and the United States, (Which for spatial and repetitive purposes, I will refer to as Banana Cultures for the remainder of the paper), introduces the reader to a world of corporate greed, consumption, and environmental change using the history of the common, everyday, fruit, the banana. He explores the various political occurrences, health problems, and changes in mass media through the rise of the consumption of the banana in the United States, and around the globe.
The Brazilian acai berry has been a food staple for low income families for years and a cultural symbol for generations. This berry is vital in Brazil, where it is farmed and, until recently had a relatively small market. However, after an Oprah interview the demand for acai has become an international affair. The rising demand has created a free market; however the once inexpensive food staple has become too expensive for the low income families. This report will analyse the current markets advantages and disadvantages, followed by two possible government intervention models. The examined interventions will be export tariff and price ceiling.
Academia Barilla’s consumers are still a specialized target, despite recent efforts for expansion and growth. For its gourmet foods product line, demographics of consumers in major markets tend to be upper middle to high class citizens of middle to older age. Italy represents the major market for Academia Barilla, with Europe and North America showing promising growth. However, recent severe economic troubles in Italy, Europe, and the United States are a major cause of concern and must be monitored. Regulatory bodies in the countries which market Academia Barilla do not tend to interfere with production. Current consumer trends for healthier, more organic products should be monitored. Whole-wheat and low-carbohydrate products have increased in demand during the past half-decade. Recent developments in the IT field have helped bring e-commerce to new heights. Finally, emerging economies in countries such as Brazil, China, India, and Russia may be targets for possible future high growth opportunities.
Looking back at the role tomatoes plays in our daily lives we see that the financial survival of the indigenous migrants of Mexico is tied to the vegetable farms of the United States and Mexico. Their lack of local employment leads to an endless cycle of poverty and pain for them and their children as migrant pickers. As producer, packer and supplier A&W provides the logistics from field to market for total accountability of product quality and cost. We have seen that the tomatoes represent not only an important cash commodity for farmers and retailers, but it’s also one of the most important food staple in our daily meals. The tomato farms of Mexico provides much needed employment for the migrant pickers as well as health issues, low wages, discrimination and poverty.
The United States has for over two centuries been involved in the growing world economy. While the U.S. post revolutionary war sought to protect itself from outside influences has since the great depression and world war two looked to break trade restrictions. The United States role in the global economy has grown throughout the 20th century and as a result of several historical events has adopted positions of both benefactor and dependent. The United States trade policy has over time shifted from isolationist protectionism to a commitment to establishing world-wide free trade. Free trade enterprise has developed and grown through organizations such as the WTO and NAFTA. The U.S. in order to obtain its free trade desires has implemented a number of policies that can be examined for both their benefits and flaws. Several trade policies exist as options to the United States, among these fair trade and free trade policies dominate the world economic market. In order to achieve economic growth the United States has a duty to maintain a global trade policy that benefits both domestic workers and industry. While free trade gives opportunities to large industries and wealthy corporate investors the American worker suffers job instability and lower wages. However fair trade policies that protect America’s workers do not help foster wide economic growth. The United States must then engage in economic trade policies that both protect the United States founding principles and secure for tomorrow greater economic stability.
In the acclaimed novel, The Choice: A Fable of Free Trade and Protectionism, author Russell Roberts, an economist and writer, tells a fictional story that enlightens readers to the wonders of the economic system. Russell provides an insightful, thought provoking story that illustrates protectionism and free trade, while making the concepts and arguments easy to comprehend.
From 2008 to 2012, the exports value (in current prices) of chocolate and other food preparations containing cocoa increased on average by 5.6% to reach its peak of 24.1 bln US$. During the same period, imports showed a similar development with an average increase of 5.5% to amount t...
This reality is a reflection of the income distribution inequality in the production and marketing of cocoa-based products. It is estimated that 70% of the final price of the product is received by transnational companies, while farmers receive only 5% of the final price . This 5% often does not help the farmers to cover the costs of production. This means that the market structure leaves the producers with little ability to make decisions and makes them unlikely to pursue active participation in the definition of international economic rules. Moreover, this forces the farmers to produce at the lowest possible cost, which affects the working conditions of farmers.
High price in imports. Because our main ingredient is imported from the U.S., the exportation and freight costs are higher than those compared to a local company.
Currently, almost 80% of products from Central America and the Dominican Republic already enter the United States duty-free. This is a direct result from unilateral preference programs such as the Caribbean Basin Initiative (CBI) and the Generalized System of Preferences (GSP).