Trade News: Corruption in India, U.S. Food Aid, Ethical Fashion Show

From ITCSD: Farm Subsidies: Ballooning US Food Aid Pushes Total Support to New High. Domestic food aid payments in the US have doubled between 2002 and 2009, new figures show, pushing total farm subsidy levels to a record high of US$114 billion. Nine-tenths are classified as green box payments. Spending on domestic food aid has grown in recent years, analysts say, as the economic downturn has pushed thousands more US citizens into poverty.  At US$78 billion, domestic food aid accounts for three-quarters of all US green box spending, with food stamps accounting for 70 percent of these payments.

From Silk Road Intl.  Sometimes Contracts are Not Enough. When doing business in China, sometimes contracts just don’t work. Sometimes you not only don’t get what you ordered, but you’re left with no viable options for exit or resolution.  Even ”if you can’t do it, just return my money and we’ll call it good” gets you nothing.  This is rarely ever successful.  First, Chinese style: no due diligence or contracts, only relationships/connections (Guanxi).  Second, Western Style: no Guanxi, only due diligence. Third, the best of both worlds: lots of research and probably as many dinners.

India's on going corruption is costing them a lot

From Euromonitor: Corruption Impacts India’s Business and Political Environment. An increasing number of corruption scandals since the late 2000s have damaged the government’s credibility, caused major loss in tax revenues, led to social unrest and widened income inequality.  India ranked 87th place out of 178 countries in Transparency International’s Corruption Perceptions Index (CPI) in 2010 (by comparison, New Zealand was ranked #1 best). Corruption significantly impacts India’s business environment and poses a threat to sustained economic growth:

  • Pervasive corruption reduces competition and efficiency in the Indian economy.
  • Corruption raises the cost of doing business and adds to the problem of regulatory uncertainty, thus affecting foreign direct investment (FDI).
  • Significant tax revenues have been lost due to corruption.
  • India’s efforts to reduce poverty will be hampered as public funds are embezzled and diverted from social spending such as on healthcare and education.
  • Rising corruption has led to social discontent amongst the middle-class and a volatile political environment.

From the flip side of bad ethics, via World Fair Trade Org:  Ethical Fashion Forum’s 2011 Source Expo. The Source Expo is the only fashion industry trade show dedicated to manufacturers, fabric and textile suppliers and cooperatives working to high ethical standards.

In a related article also from WFTO: The 8th Paris Ethical Fashion Show. The Paris Ethical Fashion Show is bringing together designers from all over the world who all share the same goal: designing cutting-edge fashion that strives for a better world, a world which respects humankind, the environment, and multiculturalism.


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