STiR Tea & Coffee Industry International

Volume 5, Number 6

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8 STiR coffee and tea / Issue 6, 2016 (December/January) Publisher/Founding Editor Glenn Anthony John gaj@octobermultimedia.com Managing Editor Dan Bolton dwb@octobermultimedia.com Art Director Somjet Thitasomboon snt@octobermultimedia.com Global Tea Report Jane Pettigrew Global Coffee Report Dan Shryock Contributing Writers Anne-Marie Hardie Sherri Johns (North America) Alf Kramer (Europe) Larry Luxner Sunalini Menon (India) Frank J. Miller Hans J. Niebergall Kelly Stein (South America) Translations (Chinese) Helen Xu Fei Subscriptions Malisa Kongkatitum Sales Director Emerson Leonard edl@octobermultimedia.com Director, October Inter Co., Ltd. Boonthin Tubsongkroh brt@octobermultimedia.com STiR c/o October Inter Co. Ltd. Interchange 21 Bldg., 32nd Fl., Room 3225, 399 Sukhumvit Road, North Klong Toey, Wattana, Bangkok, 10110, Thailand Tel +66 2 660 3789 Fax +66 2 660 3881 www.stir-tea-coffee.com Published by: A Member of: I From the Editor © 2016 October Multimedia Co. Ltd., STiR coffee and tea is published bi-monthly in February, April, June, August, October, and December by October Multimedia Co. Ltd. Printing and distribution overseen by October Inter Co., Ltd., Interchange 21 Bldg. Fl 32, Rm 3225, 399 Sukhumvit Road, North Klong Toey, Wattana, Bangkok, 10110 THAILAND. Tel +66 2 660 3789. E-mail: info@octo- bermultimedia.com www.octobermultimedia.com. All rights reserved. By-lined or initialed articles represent the opinion of the author. All articles published in STiR coffee and tea or www.stir-tea- coffee.com are copyrighted. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without written permission. nternational trade is declining. Since 2012 global trade in goods and services has dropped to less than half the rate of the previous 30 years. Trade volume in 2016 is estimated to grow by 1.7%, the slowest rate since the financial crisis, according to the World Trade Organization. WTO's forecast for 2017 was recently lowered to between 1.8% and 3.1%, down from a previous estimate of 3.6% due to the falling volume of merchandise. Historically strong trade growth has signaled strong economic growth. Trade has pro- vided a way for developing and emerging economies to grow quickly. Rising imports are associated with faster overall growth in developed countries. Trade has typically grown at 1.5 times the rate of global GDP (global domestic product). It now appears that 2016 will be the first time in 15 years that the ratio between trade growth and world GDP will fall below 1:1. Sluggish consumer purchasing bears much of the blame. Demand for China's exports has cooled. Japan's stimulus has stalled. The US is still slowly rebounding after the trauma of 2009. Europe is unsettled and facing a possible dissolution of the world's largest free trade zone. Russia's economy is slowed by sanctions, the Middle East by tragedy. Brazil continues to experience political and agricultural disruptions and India's economy was severely dam- aged by a self-inflected wound of demonitization. These disruptions, though painful, are cyclic. In the past buoyant optimism and bountiful corporate profits powered global trade without regard to consequences. This has given rise to the notion that trade is inherently "bad." It is not, so long as treaties achive a "win-win" for parties involved. "While the benefits of trade are clear, it is also clear that they need to be shared more widely," writes Roberto Azevêdo, WTO's director-general. "We should seek to build a more inclusive trading system that goes further to support poorer countries to take part and benefit, as well as entrepreneurs, small companies, and marginalized groups in all economies. This is a moment to heed the lessons of history and re-commit to openness in trade, which can help to spur economic growth." The growing backlash against globalization that threatens open trade, is a troubling de- velopment that would greatly impact the tea and coffee industry. Coffee and tea are ex- amples of commodities in markets that support poor countries and encourage greater un- derstanding of cultural differences. Coffee and tea professionals travel widely and present consumers with important insights into the effort and pride producers display in growing and processing their havest. No one should blindly rail against trade and initiate costly tariff battles. Enacting protec- tionist measures will set back decades of progress. It is misguided to unravel trade agree- ments and treaties that have lowered tariffs and barriers to trade. But open trading systems that result in job creation and promote economic development must also take into consideration social injustice and displaced workers. It is important to recognize that food and agricultural products should not fall under the same rules as TV sets, furniture, steel, and automobiles. How the trade rules are written really does matter. Constructive discussion to rectify imbalances is the remedy. Free trade must be fair trade. The Case for Trade

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