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Fair Trade
Author: From Wikipedia
Fair trade products shown at XI Unctad.The fair trade movement promotes the
use of labour, environmental and social standards for commodities, particularly
those exported from Third World and Second World to the First world. Employment
and commercial law both proposed and in practice varies widely, from prohibition
of goods made using slave labour to minimum price support schemes. Standards
may be voluntary or enforced by governments or Non-governmental organizations,
and may be general (such as a prohibition on the use of slave labour, which
most countries have signed up to) or specific to certain industries (such as
the arrangements supporting coffee prices in the 1980s).
Fairtrade labelling can be seen to bridge the gap by allowing companies to
offer consumers the choice of buying goods meeting certain standards, which
are monitored by independent organisations.
Implicit (and often explicit) in these approaches is a criticism of free trade
as being "unfair" for a variety of reasons, most generally that prices
do not properly reflect the externalities (environmental costs, social costs,
etc.) associated with producing the product. Fair trade arguments may support
(or be treated as supporting) protectionism, but this is only true of some
of the positions within the quite disparate fair trade movement. (See protectionism
for further discussion of related issues.)
Overview
"Fair trade" was originally used by those supporting social justice
and the alleviation of the intense poverty found in many developing nations.
They contrasted "fair trade" with 'unfair' international trade practices.
It is associated particularly with labour unions and environmentalists, in
their criticism of disparities between the protections for capital versus those
for labour and the environment. The use of the term has expanded beyond campaigns
to reform current trading practices (and major institutions such as the World
Trade Organization which embody them), there is a movement to allow consumers
to choose not to participate in these practices. Fairtrade labelling (or Fairtrade
certification) allows consumers to identify goods (especially commodities such
as coffee) that meet certain agreed standards of fairness.
Advocates of fair trade argue that growing inequity and serious gaps in social
justice, and the global export of terrorism, are symptoms of an economic system
that permits harms to be exported to other countries, while importing their
goods. They point to extinction, deforestation, social unrest, as consequences
of globalisation, and in particular of an unfair globalisation. The international
trade system, critics say, not only pits David against Goliath - as free trade
inevitably will - but blindfolds David.
In the past, the responses sought by critics of the international trade system
included various penalties on "unfair" goods. This argument generally
made little headway against the long-term movement towards free trade; imposition
of penalties for "dumping" was sometimes motivated by domestic political
reasons (such as U.S. imposition of steel tariffs in 2001).
Today, the fair trade movement concentrates more on the abolition of agricultural
subsidies and dumping, and to a much lesser extent on offsetting penalties
on "unfair" goods. Indeed, although there are many who are still
critical of free trade in general, there is a trend towards campaigning against
what is seen as hypocrisy by developed countries in using protectionism against
the poorest countries (especially in agricultural products), whilst requiring
them to leave their own producers without protection.
In addition, the fair trade movement has built on long-standing attempts to
allow consumers to choose to give producers in poor countries a better deal,
and developed the fairtrade labelling system. This makes use of the market
in order to help achieve social justice principles.
Fairtrade labelling
"Fair trade" or "Fairtrade" aims to guarantee not just
fair prices, but adherence to principles of ethical purchasing. These principles
include adherence to ILO agreements (mainly banning child labour and slave
labour; guaranteeing a safe workplace; and the right to unionise), adherence
to the United Nations charter of human rights, a fair price that will at least
cover the cost of production and facilitate social development, and especially
in agriculture, protection and conservation of the environment. Fair trade
also aims for long-term business relationships that are transparent throughout
the chain. For the consumers, fair trade seeks to guarantee high quality. The
adherence to these principles is indicated to the consumer with a fair trade
label or brand.
Fair trade is also to be distinguished from safe trade which is more narrowly
focused on preservation of biodiversity, biosafety, and biosecurity, and preventing
serious global climate change. Although both are often advocated by the worldwide
green parties or global NGOs like Greenpeace and Rainforest Alliance, the two
concerns are usually discussed separately at different diplomatic conferences,
and historically have resulted in different treaties entirely. Supporters of
safe trade see it as the foundation for fair trade, since ecological damage
is implicated in social problems as well.
Currently the most common definition of fair trade is that of the FINE group
of organisations (Fairtrade Labelling Organizations International, International
Fair Trade Association, Network of European Worldshops and European Fair Trade
Association). The FINE definition does not require or imply offsetting penalties
which have been one of the main sources of arguments against fair trade, and
reads as follows: "Fair Trade is a trading partnership based on dialogue,
transparency and respect, that seeks greater equity in international trade.
It contributes to sustainable development by offering better trading conditions
to, and securing the rights of, marginalised producers and workers - especially
in the South. Fair Trade organisations (backed by consumers) are engaged actively
in supporting producers, awareness raising and in campaigning for changes in
the rules and practice of conventional international trade."
The labelling of fair trade products began at the initiative of Mexican coffee
farmers in 1988, together with Dutch development agency Solidaridad. Coffee
that was imported to the Netherlands under the fair trade principles was labelled
by Solidaridad under the name of Max Havelaar. This fair trade labelling system
is today known as "Fairtrade" or "Fair Trade Certified",
includes the Max Havelaar and TransFair labels, and is controlled by Fairtrade
Labelling Organisations International (FLO).
The history of fairtrade movements spans the 20th century; it is fairtrade
labelling which is the relatively recent innovation which has allowed its principles
to be adopted by any company or organisation, and brought the concept into
the mainstream. Previous initiatives include "goodwill selling" that
was practised in the United States from the 1950s until 1970s, the Worldshop
movement that was begun in 1959 by Oxfam, and alternative trading organisations
(ATOs) that operated primarily in the U.S. and Europe from the 1960s until
today.
Fair trade and politics
The Federation of European Green Parties, who unlike most counterparts outside
Europe are usually represented in some numbers in the European Parliament,
are strongly in the fair trade camp. One of their MEPs, Caroline Lucas from
the UK, argues that "many developing countries called for a study to examine
the effects of tariff reductions on local industries and jobs, before being
required to open their markets further. Local industries, they say, have already
collapsed in most African and least developed countries as a result of previous
tariff cuts."
According to Lucas, "The choice is not between global trade rules and
chaos: rather, it is between trade rules that undermine sustainability and
favour the rich, and trade rules that support sustainability and equity." A
major focus of Greens is land reform that respects natural ecologies, and traditional
cultures, while other groups focus more clearly on equity.
The World Bank has taken a positive stance at fair trade. According to World
Bank's comments on their 2003 study of sustainable coffee markets, sustainable
coffees (both fair trade and organic), "can provide such benefits as improved
natural resource management; fewer agrochemicals used in production, which
decreases costs and health risks; and increased use of rural labour, which
provides more jobs for those in desperate need." It should be noted that
the definition of fair trade here does not involve government-mandated additional
taxes or generic foreign aid.
The European Commission has stated in 2002 that they will support fair trade
plans of the private sector.
Fair trade versus free trade
In the past, suggestions that "unfair" goods be taxed, or that standards
such as ILO standards be required of countries in order to participate in international
trade, have led to heavy criticism by advocates of free trade. (See free trade
for discussion.) In general, although many organisations and individuals involved
in fair trade campaigns are still uneasy about unfettered free trade, they
are more cautious about arguing for protectionism or coordinated international
intervention. Today, the emphasis is on the lack of free trade, caused by the
protectionism (including agricultural subsidies) of the developed world. Without
such rich-country protectionism, it is argued poor countries might stand a
chance of seriously alleviating poverty. (See trade and development.)
Some Italian consumer organisations proposed in the 1980s that goods that
were imported to Italy should be taxed inversely proportionately to the degree
to which social and ecological standards of the exporter matched those of Italy
- in other words, lower standards meant a higher offsetting tariff. The money
so collected would presumably be spent on foreign aid to bring the exporting
nation up to Italian standards - thus, all purchasing in Italy would be normalised
as moral purchasing within ethics prevailing in Italy.
From Wikipedia, the free encyclopedia.
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