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Fair Trade Series Part 2: Its Governance and Practice

“Overcoming poverty is not a task of charity, it is an act of justice. Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. Sometimes it falls on a generation to be great. You can be that great generation. Let your greatness blossom.” – Nelson Mandela

The same sources have created both the predicted global animal extinctions and the increasing human poverty through short-termed, aggressively harmful economic ventures in various parts of the world. Many people are still not aware that these animal extinctions will produce worldwide protein shortages, and that many human societies as we know them, will fall from those devastating environmental disasters. It is a very serious situation that is being predicted within many people’s lifetimes. However, there is Hope, because there is still a “window of time” to turn it around. But how can we create an economic system that is actually sustainable? We can do it through Fair Trade.

One must begin by creating a local/global trade system based on mutual bargaining. One cannot deliver fair and desirable human development outcomes, unless all members have the capacity to negotiate and extract benefits from local or international trade. (1)

There are four basic principles that must remain in all trade arrangements: (2)

● Trade is a means to an end; not an end in itself.
● Trade rules should allow diversity in national institutions and standards.
● Countries should have the right to protect their institutions and development priorities.
● No country has the right to impose its institutional preferences on others.

Yet, there is still a considerable marginalized population living in visible poverty even in developed nations, such as the USA and Canada, who seem “to fall in between the cracks” and get frequently overlooked for reliable, long-term living wage employment opportunities. Hence, there is an apparent need for all peoples, including the large groups of marginalized people in developed countries, to benefit from the increased opportunities and welfare gain that the domestic and multilateral trading systems generate. The focus of Fair Trade is to benefit everyone, anywhere in the world, directly and indirectly; for it to be truly fair trade. The results are visible, when it is.

“Article 2 of [World Trade Organization’s (WTO)] Doha Ministerial Declaration contains an implicit principle of fairness: the “alleviation of poverty” … [while it] recognizes “the need for all our peoples to benefit from the increased opportunities and welfare gains that the … trading system generates”. (3)

What separates Fair Traders from Free Traders? Fair Trade certifiers focus primarily on health, safety, labor and pricing. Whereas, noncertifiers are more focused on organizational business practices, networking, and business development. (4) Hence, most critically, with the practice of free trade (noncertifiers), often comes “freeriding” (5) : not fairly giving back or not fairly investing in the producers of their products or services, where the burden is placed on the workers or more fair-minded entrepreneurs and governments to pick up the shortfall. The practice of “freeriding” often reduces the socio-economic status of a local population in business and social settings in the long term, thereby eventually creating the marginalization of those select populations, often most affecting identifiable subcultural groups within mainstream societies.

Public education is required at all levels to remove the invisibility of process (lack of transparency) and the ongoing problems of labour being seen as abstract (faceless) (6). These two significant factors will continue to be drivers of regional poverty and sustainability issues. In addition, people need to also see more complete marketing information, which also highlights the producers who help create the essential base ingredient(s) of the building of a commercial product (7), not just the final stage processors who help to bring forth the finished product that consumers often hear in advertisements.

Finally, Fair Trade Business Practices can be effectively encouraged, supported and established for the long-term, through the following measures:

● Creation of local Fair Trade Committees to oversee business membership’s adherence to its policies, similar to the Better Business Bureau (BBB) in Alberta.
● Start-up governmental monies (grants or loans) given to local businesses, based on their following established Fair Trade local policies, created by their local Fair Trade organizations.
● Encourage businesses to support living wages or fair trade of products/services (such as, 40-50% going to producer and 50-60% to the buyer, paying upfront for completed products, etc.).
● Fair Trade Business Tax Incentives for businesses that actively and consistently practice Fair Trade principles that actively help sustain their communities.

Fair trade is an investment in a process that creates a more sustainable future for all of us. Each of us is worth the investment. Learn more about it and help become a solution to your region; anywhere in the world.


End notes:

1 United Nations Foundation: Connecting You with the United Nations.
2 United Nations Development Programme. Making Global Trade Work For People. London, UK: Earthscan Publications, 2003.
3 Stiglitz, Joseph E. and Andrew Charlton. Fair Trade For All: How Trade Can Promote Development. Oxford, UK: Oxford University Press, 2005.
4 Stenn, Tamara L. The Cultural and Political Intersection of Fair Trade and Justice: Managing a Global Industry. New York, NY: Palgrave Macmillan, 2013.
5 Americo Beviglia Zampetti, United Nations, Geneva. Fairness in the World Economy: US Perspectives on International Trade Relations. Northampton, Massachusetts: Edward Elgar Publishing, 2006.
6 Hudson, Mark, Ian Hudson, and Mara Fridell. Fair Trade, Sustainability, and Social Change. International Political Economy Series. New York, NY: Palgrave Macmillan, 2013.
7 Nicholls, Alex and Charlotte Opal. Fair Trade: Market-Driven Ethical Consumption. London, UK: Sage Publications, 2005.

Other articles that may interest you:

Fair Trade Series Part 1 – The Fair Trade Advantage, Stella Constance

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