Now, what is globalisation? Globalisation is an ongoing process which eventually leads to integration of countries in the world as trade barriers are reduced. Globalisation essentially began with GATT, the global agreement on trade and tariffs. The first stage of GATT began in 1974 with the third and final stage being in 1994, when the WTO was formed.
The aim of the WTO is to provide a level playing field with respect to trade across the globe so that businesses could trade freely across borders. The WTO was formed in hopes that it would provide advantages to businesses as they would have access to a larger market. However, this hope only exists for big multinational companies in the world such as Ford, Sony, Nike, and Microsoft to name a few. However, for smaller nations and businesses such as those in the Caribbean, this agreement is actually to our detriment, especially to our sugar and banana industries.
How is it a detriment to our country?
Well after the abolition of slavery, the break away from colonial rule, this abolition had rules, one of which was that the Caribbean nations received preferential treatment to European markets. However with globalisation in effect, many nations have called for this preferential treatment to e abandoned as it does not support the level playing field idealized by the WTO. The WTO has allowed a grace period over which this will eventually come to light, however, only one more year remains in this period before Caribbean territories feel the full blow of globalisation. This lack of preferential treatment is going to put Caribbean sugar and banana industries at a disadvantage. Why? Caribbean territories lack what is known as economies of scale, where production costs per unit is less as you increase the amount of produce made. Caribbean lacks economies of scale because labour costs are high and lack of raw materials. For example in Barbados & St. Lucia it costs $1 per kg of sugar compared to $0.20 US per kg of...
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