The Banana Wars

The progressive reduction of tariff barriers has caused World Trade to increase by several hundred per cent since 1945, and there is no doubt that this has created both work and prosperity. It has also improved products: (1) …… the planned economies of the Soviet Union and the Communist block countries created industries that produced nearly as much as Western companies, the products were much less sophisticated, reliable or marketable, (2) …… they were excluded from competition. Today, most economists argue that nations which try to shelter declining industries behind tariff barriers are simply resisting the inevitable, and that they could use those subsidies to create new jobs in more modern industries. (3) ……, tariff barriers penalize consumers: the Japanese, (4) ……, pay ten times more for rice than they would if they could buy rice from South East Asia.

(5) …… for many years, the banana industry had a special status. The European Union allowed former British and French colonies in Africa, the Caribbean and the Pacific islands to export to Europe as many bananas as they wished, at slightly above world prices. Banana production costs are higher in the Caribbean than on American-owned plantations in Latin America, (6) …… the small size of family-run farms, the difficult terrain, and the climate.

In 1999, (7) ……, the US-based company Chiquita Brands made a $500,000 donation to the Democratic Party. The very next day, the US government complained to the World Trade Organization about Europe’s banana trade, and put a 100% import tariff on various European goods.

Opponents of the American case pointed out that only 7% of the 2.5 billion tonnes of bananas imported into Europe every year come from the Caribbean. The US’s banana policy only cost American companies about $200 million a year, (8) …… trade between the US and the EU is worth about £200 billion.

Half the population of the Caribbean relies on the banana industry to supply their basic needs such as food, shelter and education. Small states such as Dominica depend on banana exports to the EU for around 70 per cent of all export earnings and much of their employment. No other countries in the world have the same degree of dependence on a single product. (9) ……, if the Caribbean banana industry was taken away without farmers being given enough time to develop other ways of using the land, the counties’ economy would collapse. (10) ……, the results of entirely free trade in bananas could be disastrous.

It could also be pointed out that American, Japanese and European farmers are currently subsidized by billions of dollars every year. (11) ……, America itself erected massive tariff barriers in the 19^th century. (12) ……, the Americans wanted to end subsidies to Caribbean banana producers, even though the consequences might have included many of the farmers turning to drug production and trafficking, or trying to immigrate illegally to the US.

The ‘banana wars’ ended in July 2001 when the Americans ended their special import taxes on selected European goods after the European Union agreed to import more Latin American bananas from the large US banana companies, while still also buying bananas from their former colonies.

TRANSLATION

A. Translate from English into Russian.

Economists have long understood the principle of comparative advantage. The conclusions of the great economists Adam Smith and David Ricardo on the gains from trade have held up well over time. Although economists often disagree on questions of policy, they are united in their support of free trade. Moreover, the central argument for free trade has not changed much in the past two centuries. Even though the field of economics has broadened its scope and refined its theories since the time of Smith and Ricardo, economists’ opposition to trade restrictions is still based largely on the principle of comparative advantage.

Belarus’ economy is based on exports, and the country has trade links with more than 170 countries, which helped generate international trade worth US $50 billion in 2009. The development of foreign economic activity for the republic is one of the key factors of economic growth which encourages an increase in production effectiveness and ensures people’s welfare.

Belarus is the world’s third largest producer of potash, a raw material used in many fertilizers and chemical products. Almost half of exports go to Russia, mostly minerals, chemical products, machinery and food, while more than a third goes to EU states in the form of petrochemicals, fertilizers, and textiles. After Russia, Belarus’ leading trade partners are the Netherlands, Germany and Ukraine. The main imports to Belarus are energy commodities from Russia, manly oil and gas, and raw materials.

The government has developed 47 strategies regarding the increase of exports and joining new markets in Latin America, Asia and Africa. As a result, the country entered 24 new markets in the first six months of 2010.

As regards import substitution, the Government is working hard to reduce imports of over 1,680 commodities. A strategy of foreign economic activity until 2015 has been developed to optimise the foreign trade balance. The Government goal is to reach a positive balance by 2014.

B. Translate from Russian into English.

Фритредерство – направление в экономической теории, политике и хозяйственной практике, провозглашающее свободу торговли и невмешательство государства в предпринимательскую сферу жизни общества. На практике свобода торговли обычно означает отсутствие высоких экспортных и импортных пошлин, а также немонетарных ограничений на торговлю, например, квот на импорт определенных товаров и субсидий для местных производителей определенных товаров.

Одной из ранних теорий торговли был меркантилизм, возникший в Европе в XVI веке. В XVIII веке протекционизм был подвергнут резкой критике в трудах Адама Смита, учение которого можно считать теоретической основой свободной торговли. В XIX веке взгляды Смита получили более полное развитие в трудах Давида Риккардо.

Сторонниками свободной торговли являются либеральные партии и течения; к противникам относятся многие левые партии и движения, защитники прав человека и окружающей среды, а также профсоюзы.

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