How Insane is Global Trade?
The way trade works in the global economy can be insane – it wastes resources, worsens climate change, and undermines the livelihoods of millions of small-scale producers worldwide. Yet it is an almost unavoidable consequence of de-regulatory ‘free trade’ agreements and the billions of dollars in supports and subsidies – many of them hidden – that prop up the global economy.
To raise awareness about this issue, we’ve produced a short film and a fully-referenced factsheet that helps to explain how and why ‘insane trade’ happens:
Watch our 3-Minute Film:
Some Jaw-Dropping Facts
about Insane Trade
• More than half of the seafood caught in Alaska
is processed in China; much of it is sent right back to American supermarkets – Alaska Journal of Commerce, 2018.
• Mexican calves fed American corn are exported to the United States, where they are butchered for meat, which is then sold in Mexico – The New York Times, 2017.
• African-grown coffee is often packed in India, Canadian prawns are processed in Iceland, and Bolivian nuts are packed in Italy – UK Times, 2007.
1) Say NO to Insane Trade
Eliminating unnecessary trade would immediately reduce pollution
– including CO2 emissions – and slow resource depletion.
– Call for an end to corporate subsidies and tax breaks. For links to other organizations working on these issues, see the Resisting Corporate Power, Globalization, & ‘Free’ Trade category on our Links page. Read more about subsidies on our blog.
– Critically question “free trade” dogma. See our Independent Media Sources page for a list of sites that critically cover free trade. Head to our blog to read more about why so few people are informed about trade issues, and what can be done to stop free trade treaties.
– Support steps to internalize the costs of fossil fuels. For links to other organizations working on this issue, see the Environmental Justice, Climate, & Energy category on our Links page.
2) Say YES to Local Economies
Localizing helps small farms and local businesses to thrive,
strengthens community, and supports personal well-being.
– Buy local food and other local products.
– Help build local food systems and local business alliances. For links to other organizations working on these issues, see the Local Economies and Rethinking Economies and Food & Agriculture categories on our Links page.
Frequently Asked Questions
about Insane Trade
Companies often relocate labor-intensive work overseas to minimize costs – Scotland’s minimum wage is about four times that of China, for instance, which explains why Scottish fish is often processed in China.
With global fossil fuel subsidies (direct and indirect) on the order of $5 trillion per year, this energy-intensive way of doing business is often less expensive for large food distributors, though it carries great costs for the environment and for livelihoods in the food’s country of origin. Lax international free trade rules help make this possible as well.
In many cases, companies export and re-import goods to benefit from tax policy loopholes. For example, China’s value-added tax (VAT) allows businesses to claim tax rebates by exporting their products, while other businesses can then re-import those same products to claim rebates of their own. Fossil fuel subsidies, which reduce transport costs for businesses, help make this a viable strategy.
The results are absurd. For example, in most years since 2005, China has imported more from itself than from the United States – despite being the US’s third-largest export market.
Not really. Even in the height of apple season in the northern USA, apples from New Zealand and Chile flood supermarket shelves – and regardless of origin, many supermarket apples stay in cold storage for up to a year, so the season doesn’t matter.
Distributors source from wherever is least expensive within their established channels. Supermarkets will choose apples from 10,000 miles away if they’re cheaper than apples grown just 10 miles away. Same with other fresh foods.
The main contributors to insane trade are subsidized transport, free trade agreements, import-export tax rebates, and differences in labor costs and environmental and safety regulations – not seasonal availability of fresh produce.
In most cases, NO. In the world of big agribusiness and global trade, foods are interchangeable commodities – they’re grown in large quantities, and regional differences are something to be eliminated. For monocultural producers and large- scale marketers, the goal is uniformity.
Sometimes, regional differences in foods do influence global trade – but not in the way you might expect. For example, beef from factory- farmed cows in the USA is usually too fatty to be sold as hamburger meat. So, that beef gets shipped abroad, and leaner grass-fed beef gets imported. Changing animal husbandry practices in the USA would solve this problem (and several others) – but because of subsidies for fossil fuels and transport infrastructures, insane trade is the industry’s most profitable “solution”.
In 2012, commercial ships produced over a million tons of CO2 per day – more than the emissions of the UK, or Canada, or Brazil. That’s roughly 4% of the world’s CO2 emissions – and it’s set to grow to 17% by 2050 if current trade rules continue.
The growing aviation industry will produce another 20% of global emissions by 2050. And that doesn’t account for the infrastructure needed to support long-distance trade – including cement production, which already contributes 8% of the world’s emissions per year.
Remarkably, climate agreements like the Paris Accords do not account for the emissions from international trade: the CO2 emitted by the thousands of oil tankers, container ships and cargo-carrying aircraft that crisscross the globe do not appear in any nation’s CO2 accounting. Why? Because policymakers believe that trade – and the growth of global GDP – is more important than the climate. Insane!
Imported goods are treated as a status symbol in some parts of the world. This attitude has gained traction with the help of extensive advertising that makes foreign products appear superior and links self-worth to the consumption of foreign and industrialized products.
It has also contributed to a common business attitude that sees production for export as the pinnacle of success.