Fair Trade, rhetoric and reality

Fairness is about justice, a basic element of humanity. In the sphere of international trade, that notion should logically be deployed simply because it is the right and only way forward. That deployment would be supported by widespread education and support from government and non governmental agencies to include as many producers, wholesalers, retailers and consumers as possible.

Yet what fair trade is increasingly becoming, is a proprietary and Western defined system of determining what is and is not ‘fair’. There can of course be no right or wrong way of implementing fairness in trade, because the tiniest step towards greater fairness is to be lauded and encouraged. What is going wrong though is the manner in which the notion of fairness in trade is being defined, and controlled. The interventionist, exclusive and highly commercial form that it has assumed is severely limiting the potential of fair trade by obstructing the emergence of  more broad based, non exclusive and far reaching change.

Trade – fair trade – has the potential to dramatically benefit the economies and therefore the people of less developed nations. Jawahar Lal Nehru stated the obvious in saying, “.. if an industry cannot be run without starving its workers, then the industry must close down. If the workers, on the other hand, do not have enough to eat, then the intermediaries who deprive them of their full share must go.” Obvious that may be, but practical it apparently is not. The reason for this can be found in the writing of Nobel Prize winning economist, Joseph E. Stiglitz.

He writes in the foreword to ‘Fair Trade for All’ of the inequities of trade and the need for a ‘significant shift in the relationship between the developed and the developing world.’ He goes on to describe how the Doha Round was based on an agenda determined by the developed countries, which excluded reference to the difficult internal reforms required to genuinely address the issue. Stiglitz sums up the situation thus,

“So the choice for the world was between a fair agreement reflecting the sentiments of a broad majority of the populations in both developed and less developed countries, or another unfair agreement, reflecting the special interests in developed countries. It was clear that the developing countries were on far higher moral ground than were the developed countries.”

Fairtrade as it is commercially known today, clearly falls short of the paradigm shift that is the solution to the unfairness that characterizes most trading relationships today. By branding and defining fair trade in the manner that is being done by the organization that bears the same name as the ideal, the scope for broader change is being restricted.

Small, genuine practitioners of fairness who do so not for marketing advantage but because they believe it is the right thing to do, now have to buy certification and subscribe to a certain definition of fairness to be considered credible. That perhaps unwittingly commercializes a notion that is a basic obligation of every business. It also usurps the fact that fairness in trade is a simple, uncomplicated obligation that is not an option but an obligation, and makes it into a complex, expensive marketing exercise with restricted impact.

Fairtrade – the brand – set out with noble intentions and is achieving a positive outcome. It fails though in addressing the root of the problem of unfair trade by offering a veneer of acceptability to existing and fundamentally unfair trading relationships. In offering consumers the comfort of being a part of the solution to unfair trade by paying a premium at the supermarket, it retards progress towards the more radical reform that is required. In offering the entities that in some cases precipitated severe hardship for producers for their own commercial gain, it also offers a vehicle for some of the culprits responsible for unfairness to whitewash their brand names. The rapid growth of the fairtrade brand, is a tribute to consumers and their desire to do good, but it also offers policy makers comfort and the opportunity to defer the hard decisions that are required to really make trade fair.

Genuinely fair trade requires the empowerment of producers. As Nehru suggested, the intemediaries who deprive producers of  their fair share must go. Or at least they must operate in a manner that is fairer to the producer and to the consumer. The fair trade ideal must gain broader currency, integrating fairness into every business model, and relying less on a niche form of fairness. The commercialization of the concept of fairness must cease, and be replaced by an intolerance of unfair products – consider the ‘champions’ of fair trade today who offer a token few ‘fair’ products, and many more, very profitable products without that qualification. Isn’t that unfair?

I restate that every effort to benefit the producer – however incremental, however small – is laudable. Those schemes should not obstruct the movement towards genuine fair trade though, for only when the structure of trade is corrected at governmental, trade and consumer levels can less developed economies harness the benefit of trade in coffee, tea, cocoa, diamonds, gold or whatever primary crop they produce, and begin to secure broader and tangible benefit for their countries.

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