Fairtrade Foundation warns of serious economic and social decline in Caribbean following EU/Latin American trade breakthroughs
Today in Madrid, the first bilateral trade agreements for seven years between the European Union and Latin America will be signed. These agreements between the EU and Colombia and Peru cover financial services, agriculture and manufacturing. They will be worth tens of billions of dollars.
Already today so-called free trade deals have been finalised with 27 Central American states including Costa Rica and Guatemala spanning beef, bananas, rice and cars.
And after a six year impasse, talks last night resumed between the EU and the mighty trade bloc known as Mercosur which includes Brazil and Argentina to facilitate a wide-ranging trade deal.
‘These hugely significant developments would not have happened without selling the Caribbean banana industry down the river,’ said Aurelie Walker, Fairtrade Foundation’s trade policy advisor. ‘The decline of the Caribbean banana industry may seem like an irrelevant side-show to some. But abandoned farms together with laid-off financial workers in Caribbean tax havens are the perfect seed bed for enveloping the Caribbean economy and political system in economic and social decline. This is what happens when you lose a trade war. Farmers question whether it is worth tilling the soil when a shrinking export market, a lower return and a bank crisis envelopes you.’
Last December, Europe drastically reduced tariffs on Latin American bananas after a 17 year-long trade war. In 2008, the EU ended preferential treatment for Caribbean bananas. Together, this has allowed a flood of cheap Latin American bananas into Europe devastating the economy of the Caribbean.
The effects are already being felt. There is growing evidence of the spread of marijuana growing and trafficking, especially in St Vincent where a Marijuana Growers Association was publicly announced in spite of the practice being illegal with increased efforts by law-enforcement officers to stamp it out.
Strategically placed on the cocaine route from South to North America, the Caribbean used to be simply a stopping off point for traffickers. Now, say well placed sources, drug barons are making connections with the marijuana trade supplying a deadly mix of guns and cocaine.
Renwick Rose, co-ordinator of the Windward Islands Farmers’ Association, said: ‘Trade is not a cure-all for poverty alleviation. Investment in infrastructure, technology and human capital are also pre-requisites for meaningful developmental progress. But the economies of vulnerable nations are being sacrificed to satisfy the wider interests of western corporations who have and continue to diminish workers’ rights to increase margins. Windward Island farmers are doing their best to fight back, shortening supply chains and investing in community and business developments across the islands. Backed by the UK consumers, who are choosing Fairtrade in increasing numbers, at least there is one way they can still receive a decent price for their crop in a market that has seen long-term real terms price decline.’
The Fairtrade Foundation’s Aurelie Walker added: ‘The big, contradictory picture is that while fighting poverty, drugs and crime with financial assistance on one hand, as a consequence of the European Commission trade policy; poverty, drugs and crime are deepened with the other.’
Read the full report 'Caribbean banana industry decline is no sideshow' here.
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Notes to Editors
1. Tariffs on bananas from Ecuador – the world’s biggest exporter as a result of an agreement made last December will gradually be lowered from euro176 per tone to euro 114 per tonne - a 35% reduction – by 2017. In the case of Colombia and Peru, the tariff reduction is even more drastic, to 75 euros per tonne.
2. The number of active banana growers in the Windward Islands of St Lucia, St Vincent, Dominica and Grenada fell in 12 years from 11,664 to 3,100 today according to the Windward Islands Farmers’ Association.
3. The FAIRTRADE Mark is a certification mark and a registered trademark of Fairtrade Labelling Organisations International (FLO) of which the Fairtrade Foundation is the UK member. The Fairtrade Foundation is an independent certification body which licenses the use of the FAIRTRADE Mark on products which meet international Fairtrade standards. This independent consumer label is now recognised by 72% of UK consumers and appears on products as a guarantee that disadvantaged producers are getting a better deal. Today, more than 7.5 million people – farmers, workers and their families – across 58 developing countries benefit from the international Fairtrade system.
4. Over 4,500 products have been licensed to carry the FAIRTRADE Mark including coffee, tea, herbal teas, chocolate, cocoa, sugar, bananas, grapes, pineapples, mangoes, avocados, apples, pears, plums, grapefruit, lemons, oranges, satsumas, clementines, mandarins, lychees, coconuts, dried fruit, juices, smoothies, biscuits, cakes & snacks, honey, jams & preserves, chutney & sauces, rice, quinoa, herbs & spices, seeds, nuts & nut oil, wines, beers, rum, confectionary, muesli, cereal bars, yoghurt, ice-cream, flowers, sports balls, sugar body scrub and cotton products including clothing, homeware, cloth toys, cotton wool and olive oil.
5. 7 in 10 households purchase Fairtrade goods,, helping Fairtrade sales reach an estimated £800m in 2009, up from £712m in 2008. There are over 460 producer organisations selling to the UK with 872 certified producer groups in the global Fairtrade system, representing more than 1.5 million farmers and workers.
Eileen Maybin
Head of Media Relations
020 7440 7686/07770 957 451
eileen.maybin@fairtrade.org.uk
Martine Julseth
Media and PR Manager
020 7440 7695/07825 827 791
martine.julseth@fairtrade.org.uk
Faith Mall
Media and PR Manager
020 7440 8597/07766 504 947
faith.mall@fairtrade.org.uk
Neil Martin
Assistant Press Officer
020 7440 7620
neil.martin@fairtrade.org.uk