What is Fair Trade?
Fair Trade means an equitable and fair partnership between marketers and producers mostly in Asia, Africa, Latin America, and other parts of the world. A fair trade partnership works to provide low-income farmers with a living wage for their work. Fair Trade principles include the following:
- Paying a fair wage in the local context.
- Offering employees opportunities for advancement.
- Providing equal employment opportunities for all people, particularly the most disadvantaged.
- Engaging in environmentally sustainable practices.
- Being open to public accountability.
- Building long-term trade relationships.
- Providing healthy and safe working conditions within the local context.
- Providing financial and technical assistance to producers whenever possible.
- The goal is to benefit the workers not maximize profits.
- Work with producer co-operatives that use democratic principles to ensure that working conditions are safe and dignified, and that producers have a say in how their products are created and sold.
- Co-operatives are encouraged to provide benefits such as health care, child care and access to loans.
- They encourage producers to reinvest their profits into their communities projects such as health clinics.
These criteria were taken from the Free Trade Organization website.
Why is Fair Trade Important?
In the current Global Economy, corporate profits are more important than fair pay and working conditions and for workers, many who are children forced into work to support their families. Increasing globalization, along with U.S. government support for free-trade and investment agreements, are exacerbating three problems that now plague almost every nation on earth: income inequalities, job losses and environmental damage. Because of our privelaged position as consumers in Canada, we need to take the responsibility for balancing out these inqualities where our governments have failed to.
Internationally the production, trade and marketing of goods and services are increasingly concentrated under the control of a small number of corporations. Just over a quarter of the world’s production comes from 200 of the other largest firms (according to Economist John Cavanagh and Frederick Clairmonte). These firms are the primary beneficiaries of the world’s rapidly growing trade. As they compete with one another to capture global markets, their primary mode of reducing costs has been through cutting jobs, wages and benefits. These corporate giants have used their financial power to convince most of the world’s governments that they should maximize global competitiveness through freer trade. Regional trade agreements, like the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) are reducing barriers to trade and investment for firms. These free trade agreements offer firms global protection for their intellectual and property rights but there are currently no equivalent enforceable global standards to protect workers and the environment. Furthermore, as barriers to entering local markets are removed, large scale manufacturers edge small businesses and local cooperative enterprises out of the market. Local economies suffer because the profits from these companies are diverted out of the country, not than being reinvested locally.
The theory behind Free Trade was that it would encourage production and create jobs in the have-not countries, but as result the gap between the rich and the poor has increased dramatically in recent decades. An embarassing example of the arrogant attitude that represents some of those entrenched in increasingly entangled big business and politics is the footage of George Bush in Farenheit 9/11 (a recent film by Michael Moore) where the US President addresses the well-heeled attendees of a banquet for what he calls “His Base”, calling them “the Haves, and the Have Mores”. The richest 20% of the world’s population has 60 times the income of the poorest 20%. Even in many countries that are currently experiencing high growth rates from expanded trade, the benefits of growth are not trickling down to the poor.
Another problem is that the majority of exports from less affluent countries tends to be in primary product commodities, such as sugar, cocoa, and coffee, whose prices generally rise much more slowly than the prices of manufactured goods imports. NAFTA and GATT do little to enhance the trading positions and commodity prices of these developing countries. In many cases, the world market price for commodities such as coffee and cocoa falls below the cost of production, forcing farmers to sustain huge losses. Fair Trade organizations offer a crucial alternative by paying farmers a price that always covers at least production costs.
Fair Trade has never been more important. The business generated by Fair Trade Organizations in Europe and the U.S. now accounts for an estimated US $400 million, just .01 % of all global trade. Small as it may be, the rapidly growing alternative or fair trade movement is setting standards that could redefine world trade to include more social and environmental considerations. Fair traders believe that their system of trade, based on respect for workers’ rights and the environment, if adopted by the big players in the global economy, can play a big part in reversing the growing inequities and environmental degradation that have accompanied the growth in world trade. Neither good nor bad, trade can either contribute to or undermind sustainable development. Whether trade is good for producers and consumers depends entirely on how the goods are made and how they are sold.
Fair Trade brings the benefits of trade into the hands of communities that need and have earned it. It sets new social and environmental standards for international companies. A growing movement of workers, environmentalists, consumers, farmers and social movements worldwide is calling for a different framework for trade. They want a global trading system that promotes workers’ rights, protects the environment and sustains the ability of local producers to meet community needs. Together, as consumers, we can make a huge difference by demanding significant changes in the ways goods are produced, and vote with their dollars for a more just and environmentally sound trading system.
This section on Why Fair Trade? was adapted from an article written by John Cavanagh, co-director of the Institute for Policy Studies.
What does Fresh Option do to support Fair Trade?
We buy and sell whatever fairly traded items that we can get our hands on. Some of the fair trade foods and beverages that we offer are chocolate (bars and bulk), coffee (brokered as fair trade although not yet certified by TransFair), teas, bananas (when available), apples (when available).
On a local level we are trying to implement the fair trade criteria with our own local producers. We don’t often think of Canadians as victims of the kinds of human rights atrocities that happen to workers in developing countries, yet our farm owners and workers are some of the most underpaid sector of workers in the country. Without the these grower’s conviction to farm with the environment and future generations in mind, our food system would be completely left to the profit-driven tactics of huge agri-business corporations. By building long-term relationships and setting fair prices, we try to facilitate all links of the food chain to be sustainable, while keeping the end price attainable to more consumers so we can build the market for Manitoba made foods here in our own province first.
How can I find out more about Fair Trade?
In 2006 a group called Fair Trade Manitoba (FTM) launched a website www.fairtrademanitoba.ca . Check it out, they profiled Fresh Option Organic Delivery on the website launch.