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fair trade & globalization • Social and global perspectives about food. – Fair trade = free trade? – How fair is food trading locally and internationally. • How food relates to power and economics.Food. .
Free market • All economic decisions and actions regarding transfer of money. • Is a free market desirable? – Unrestricted freedom not desirable • Physical harm • Price fixing – The extent of regulations • Business incentives • Interests of consumers • How free is Hong Kong? . and services are voluntary. goods.
org/research/features/index/country.2005 Index of Economic Freedom http://www.heritage.cfm?id=HongKong • • • • • • • • • • Hong Kong (1st) Singapore (2nd) Luxembourg (3rd) Estonia (4th) Ireland (5th) New Zealand (5th) United Kingdom (7th) Denmark (8th) Iceland (8th) Australia (10th) .
World Economic Forum Global Competitiveness Report 2004-2005 .
World Economic Forum Business Competitiveness Report 2004-2005 .
Supermarket duopoly .
• Market dominance – An extreme form of market power – Unequal bargaining power .htm • Market power – The ability of a firm to independently raise prices above market levels for a non-transitory period without losing sales to such a degree as to make this behavior unprofitable. etc.Market dominance http://cbdd.wsu. • Relevant factors – Market Share – Barriers to Market Entry – Vertical Integration.edu/kewlcontent/cdoutput/TR503/page47.
• Economy – Lack of innovation .Potential problems with dominance • Consumers – Lack of choices – Higher prices • (July 2001) Lifting of interest rate ceiling on savings accounts deposits.
– Online store. Led to price war. . – Difficulties in sourcing products (but not for stationary / mobiles phones). – Difficulties finding good location.Entry into the market • adMart closed shop in Dec 2003. • Carrefour pulled out in August 2000. bulk purchase. – Pressured by 22 suppliers not to cut prices. – Property ads pulled out for 3 months.
TELECOMMUNICATIONS ORDINANCE Ch106. either from the licensee or from another person. installation. or competition would be prevented or substantially restricted. has the purpose or effect of preventing or substantially restricting competition in a telecommunications market. . system. installation. but not limited to(a) agreements to fix the price in a telecommunications market. in the opinion of the Authority. a licensee engages in conduct prescribed under that subsection if he(a) enters into an agreement. a competitor could be placed at a significant disadvantage. (3) Without limiting the general nature of subsection (1). in the opinion of the Authority. (b) an action preventing or restricting the supply of goods or services to competitors. an associated person if. or receives an unfair advantage from. arrangement or understanding that has the purpose or effect prescribed by that subsection. (d) the conditions of relevant licences. (c) gives an undue preference to. customer equipment or service. makes the provision of or connection to a telecommunications network. system. customer equipment or service conditional upon the person acquiring it also acquiring or not acquiring a specified telecommunications network. (c) agreements between licensees to share any telecommunications market between them on agreed geographic or customer lines. (2) The Authority in considering whether conduct has the purpose or effect prescribed under subsection (1) is to have regard to relevant matters including. (b) without the prior written authorization of the Authority. Section 7K (1) A licensee shall not engage in conduct which.
similar to that which exists in other comparable advanced economies.” http://www.compag. • Consumer Council 2003 report – “As a long term solution.consumer.hk/website/ws_en/competition_issues/competition_studies/20030811supermkt.gov. – No specific laws on anti-competition outside of telecommunications.hk/reference/cc. the Council is in favour of introducing a competition law framework in Hong Kong.pdf .Anti-competition in Hong Kong • Situation – No general legislation on anti-competition.html • The Government’s response – “The Government does not see the need for intervention or a competition law for this sector.org.” http://www.
html .economist.ronnytong.asp?show=newsarticles&newsarticle=13 http://www.com/articles/noncompete.webb-site.hkdf.cfm?Story_ID=413357&CFID=3131 http://www.htm http://www.channelnewsasia.org/newsarticles.Issues • Does HK need a competition law? – General? Food? Fuel? • What should such a law contain? – Obvious? price fixing – Grey areas? pricing out competitors • Further readings – – – – – (Ronny Tong’s speech in Chinese) http://www.org/public/contents/1836 http://www.com/business/displayStory.com/stories/afp_asiapacific_business/view/129871/1/.
• 13-18 Dec 2005 WTO in Hong Kong.Fair trade in the global context • 1999 US & China sign WTO deal “most important event since Deng’s open-door policy” (SCMP) • 1999 WTO in Seattle 60000 demonstrators.” (AP) http://www. like rubber bullets.com/News/world/archives/2005/02/17/2003223390 • What’s the problem? . are intended to be non-lethal. The thumb-sized bean bags are fired from guns and.taipeitimes. “The Police Tactical Unit has ordered rubber bullets and lead-filled bean bags. Commandant Suen Kwai-leung said.
g. Japanese chopsticks from rainforests . GE – Cross-border division of labor • Outsourcing. manufacturing bases – Global sourcing of raw materials • E. WTO.g. Citigroup. companies. e.Globalization • International economic integration – Integrated international trade & financial markets • Capital mobility – Transnational economic institutions • World bank.
Case study: EU sugar dumping • • • • Relies on sugar beet instead of cane because of climate. 2nd to Brazil in world market share Govt subsidies: HK$20 billion per year Over-production depresses world prices and hurt poor farmers • Costs – Brazil: loses HK$4 billion a year. Germany's Sudzucker. . – Ethiopia: HIV/AIDS budget – Malawi: primary health care budget • Who wins? – Large European sugar refiners – Fr’s Beghin. Britain’s Tate & Lyle.
Why is this so bad? http://www. rice (Haiti). • Devastating consequences on poor countries – EU sugar. corn (Mexico) .htm • Inconsistent rhetoric – Unfair competition while pushing for open markets and “fair trade”.com/en/index. & milk (West Africa) – US cotton (West Africa). – Tariffs on imports (Thai frozen prawns) – Receive $1 of aid.maketradefair. lose $2 from unfair trade.
• Show your concern. Talk about it. .What can you do? • Think about it. • Make responsible consumer choices.