World Trade (AQA A Level Geography)

• Coca-Cola is an American TNC that manufactures, markets and sells soft drinks
• It was established in 1886 in Atlanta where its HQ remains, and now operates in over 200 countries
• Two-thirds of Coca-Cola’s revenue comes from overseas and it owns other brands like Fanta and Sprite
• Coca-Cola has promoted itself through global advertising campaigns and by sponsoring major sporting events
• It is one of the most recognisable global brands and it has many positive and negative impacts on people and environments all over the world

Positive and Negative Impacts of Coca Cola

Positive impacts	Negative impacts
Coca-Cola and its 225 independent bottling plants employ over 700,000 people around the world	It has been accused of exploiting workers by paying low wages and allowing poor working conditions
It also creates lots of jobs indirectly through its supply chain, creating a multiplier effect	It contributes to health problems like obesity and diabetes by promoting the consumption of sugary drinks
It is working to reduce its negative environmental impact by investing in more sustainable packaging and encouraging recycling	It manufactures billions of single-use plastic bottles which contribute to the global plastic waste crisis
It supports community development e.g.  their 5by20 initiative aimed to empower 5 million female entrepreneurs between 2010 and 2020 by providing them with training and resources to start and grow their own businesses	They use an estimated 300 billion litres of water per year which can contribute to water scarcity e.g.  there was community backlash and protests against Coca-Cola in India due to groundwater depletion and contamination of local water sources

Fairtrade

• Free trade means producers get the price manufacturers and consumers are prepared to pay whereas Fairtrade aims to:
  • Pay a fair and guaranteed price for a product
  • Improve working conditions
  • Pay a Fairtrade premium, which is reinvested in the community

Bananas

• Bananas are one of the most produced, traded and consumed fruits in the world
• More than 50 million tonnes are produced each year, and over 20 million tonnes of these are exported
• Bananas are grown mostly in tropical regions with high temperatures and rainfall
• More than 90% of bananas for export originate from Central and South America and the Philippines

Map to show the largest exporters and importers of bananas

Domination by TNCs

• The global banana trade is dominated by just a few TNCs such as Chiquita, Dole and Del Monte
• They often own or control large plantations, allowing them to dictate terms and prices to smaller growers who depend on TNCs for access to the market
• Vertical and horizontal integration enables the TNCs to control the entire supply chain from production to transportation and marketing
• This gives them a significant advantage in terms of economies of scale, allowing them to undercut smaller competitors
• They also have considerable marketing power, influencing customer preferences e.g. the USA banana market is dominated by Chiquita and Dole which together account for around 70% of the market

Positive and Negative Impacts of the Banana Trade

Positive

Negative

Bananas provide lots of nutritional benefits and are a staple food for many people in LDE countries such as Uganda where they account for over 60% of calorie intake Employment opportunities throughout the world e.g. over 300,000 people are employed by the industry in the Philippines Export earnings support the economies of major banana-producing countries such as Ecuador and Costa Rica Development of transport and communication infrastructure e.g. building of roads and railways in Honduras to transport bananas from plantations to ports

Most bananas are treated with chemicals such as pesticides and herbicides to control disease – this affects the health and safety of workers and local communities as well as negatively affects the environment The use of artificial fertilisers is high which can lead to eutrophication The land is cleared to create plantations leading to deforestation leading to loss of biodiversity The exploitation of workers due to low wages and poor conditions e.g. minimum wage for banana workers in Ecuador is $400 per month which is below the poverty line Child labour – children as young as eight were found to be working on banana plantations in Honduras

Fairtrade bananas

• Fairtrade aims to empower producers by promoting better trading conditions for farmers who have been disadvantaged by the global trading system
• It does this by ensuring that producers receive fair prices for their products, improving working conditions and investing in community projects such as schools and clinics
• The Fairtrade price is typically higher than the market price to cover the costs of sustainable production and fair prices for farmers
• Bananas are UK’s most popular Fairtrade product, accounting for over 40% of bananas sold:
  • This is partly due to supermarkets such as Sainsbury’s, Waitrose and the Co-operative which only sell Fairtrade bananas
• The Windward Islands have significantly benefitted from Fairtrade with farmers receiving above market value for their crops when before they struggled to make a living  
• Fairtrade requires farmers to use sustainable farming practices to protect the environment:
  • In the Windward Islands, Fairtrade farmers have reduced their pesticide use by 50%