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EU banana tariffs
Transcript of EU banana tariffs
Although bananas may only look like a fruit, they represent a wide variety of environmental, economic, social, and political problems.
The banana trade symbolizes economic imperialism, injustices in the global trade market, and the globalization of the agricultural economy.
It loves Free Trade!
“An international organisation that sets the rules for global trading and resolves disputes between member countries”
Aims of WTO Trade agreements
National trade policies
Technical assistance and training for dveloping countries
International organizations WTO role in the conflict The European Union was defeated
It was enforced to abandon the tariffs to Latin American bananas
WTO support the free trade among the world
If EU doesn’t agree it must pay a fine
Why is this type of protectionism being used by the government?
To protect fledgling domestic industries from foreign competition.
To protect aging and inefficient domestic industries from foreign competition.
To protect domestic producers from dumping by foreign companies or governments. "Dumping occurs when a foreign company charges a price in the domestic market which is below of its cost of prodution" Effect on stakeholders A foreign tariff hurts the economy of a country.
A foreign tariff raises the costs of domestic producers which causes them to sell less in those foreign markets.
Producers cut production due to this reduction in demand which causes jobs to be lost.
These job losses impact other industries as the demand for consumer products decreases because of the reduced employment level.
Foreign tariffs, along with other forms of market restrictions, cause a decline in the economic health of a nation.
The EU and the United States account for two-thirds of all imported bananas worldwide.
Oligopoly dominated by four main growers: Chiquita, Dole, Del Monte and Fyffes
Africa, Caribbean and Pacific banana producing countries (“ACP bananas”) are EU controlled.
Central and South American banana producing countries (“dollar bananas”) are U.S. controlled.
Dollar banana countries were taxed by the EU in order to “even out the playing field” and benefit ACP banana countries because dollar banana countries can produce at a lower cost.
NB: Europe’s colonial history means that there are close colonial ties with ACP countries.
Type of Protectionism: Tariff Tariff - “a schedule of duties imposed by a government on imported or in some countries exported goods.”