A more just fair trade is needed<\/p>\n
H.A. Harry Hendrarto, Researcher, Justice & Peace Institute
\n(Yayasan Samadi), Surakarta, Central Java, hendrarto@terranusa.org<\/p>\n
Today, May 17, we celebrate World Fair Trade day, with the
\ntheme \"Quality that cares\". The theme might sound cliche, yet its
\nnovelty lies in the concern for producers and the environment --
\nsomething often, if not always, neglected within the current
\nmodern global trade system which merely seeks profit.<\/p>\n
Global trade has more than doubled over the past 15 years. But
\nthe system, based on free trade mechanisms, has also created
\nmassive poverty as the result of its \"win or lose\" spirit. Last
\nyear, the European Union earned US$80 billion from free trade,
\nwhile Africa lost $2.6 billion, according to the New
\nInternationalist periodical. And surely, this was not the first
\nrecorded implication of free trade.<\/p>\n
In 1999, The United Nations Development Program (UNDP)
\nreported that the developed industrialized countries (with 22.9
\npercent of total world's population) produced 84.2 percent of the
\nworld's gross national product (GNP), while the developing
\ncountries (populated by 77.1 percent of world inhabitants) only
\nwere able to produce 15.8 percent of the world's GNP. Clearly,
\nthis is far from an economic interaction which is expected to
\nalleviate poverty.<\/p>\n
Instead of bridging the gap, free trade has widened the gap
\nbetween the rich and the poor since the increase of wealth is
\nalways followed by the increase of poverty. This does not mean
\nthat trade is necessarily detrimental to the poor. But it is
\nbecause the rules of trade have been manipulated so that the rich
\nbenefit from them. Double standards have made it possible for the
\ndeveloped countries to access the market of the developing ones.<\/p>\n
Indeed, for the sake of globalization, the developed countries
\nimpose the tariff reduction principles to advance the trade. But
\nit is also true that the same countries are those who block the
\nproducts of others -- especially the developing ones -- from
\nentering theirs.<\/p>\n
One such double standard in the agricultural sector is the
\ncase of the Common Agricultural Policy (CAP) endorsed by the
\nEuropean Union. The policy aims at subsidizing the farmers to
\nlower their products' selling price. Oxfam International noted
\nthat in 2001, the total of euro 41.53 billion was given to the
\nfarmers in France (22.2 percent), Spain (14.8 percent), Germany
\n(14.1 percent) and Italy (12.8 percent) -- among others.<\/p>\n
As a result, for instance, the milk producing industry in both
\nIndia and Jamaica could no longer compete with European milk
\nproducers, who benefited from the dumping policy of the CAP.<\/p>\n
In the textile industry, a similar double standard is also
\napplied through the scheme of Multi Fibre Arrangement (MFA) which
\nhas existed since 1974. The arrangement is simply a quota system
\nwhich limits the entry of textile products into to Canada, the
\nEuropean Union and the U.S.<\/p>\n
Despite its ambiguity, the arrangement has brought serious
\ndetriment to countries whose money comes from textile exports.
\nThe most severe casualty is Bangladesh who suffers from its
\ninaccessibility to markets.<\/p>\n
More than one-and-a-half million people, mostly women, were
\nworking for textile companies. As a result of the MFA, they lost
\ntheir jobs. Such examples of the result of free trade and the
\nglobal economic system has led to calls for a more fair and just
\ntrade system which benefits not only the rich, but especially the
\npoor.<\/p>\n
Thus the raison d'etre of the fair trade movement. For more
\nthan four decades, fair trade has aimed at fostering poverty
\nalleviation and its concern has been based on siding with groups
\nof poor and marginalized producers. Fair trade has spread all
\nover the world, including Indonesia.<\/p>\n
Supported by its three pillars -- dialog, transparency and
\nconcern, the movement would like be the alternative of the
\ncurrent unfair trade system.<\/p>\n
Dialog means fair and open communication between producers and
\nconsumers so that the agreements (whether on prices or other
\nitems) can be achieved. Transparency is the basis of the work
\nrelationships, especially in information. Concern means a real
\ncare on the efforts to promote humanity in the trade system by
\nshortening the marketing chain as much as possible so that
\nconsumers become aware of the culture, identity and the condition
\nof the workers. Of course, concern for the environment is
\ninseparable.<\/p>\n
Fair trade imposes some principles that bind producers as well
\nas consumers, like advanced payments, fair prices, public
\naccountability and transparency.<\/p>\n
Within the production of fairly traded products, producers are
\nrequired to guarantee gender-balanced equality and no violence
\nwhen child workers are involved, as well as a provision of safe
\nand healthy working environment and an ecologically sustainable
\nproduction system.<\/p>\n
Yet the goods traded through a fair-trade system are still
\nrelatively small compared to overall global trade. At the end of
\nthe 1990s, for example, in West Europe, Australia and New
\nZealand, the total goods traded via the fair trade scheme was
\nworth between just $400 million to $500 million annually and in
\nthe U.S. and Canada the value did not exceed $40 million.<\/p>\n
The value was too small compared to overall world free-trade,
\nwhich exceeded $4 billion in total in the same period.<\/p>\n
This is the real challenge for those in favor of a fair and
\njust world. If we can no longer hold on to the systems that bring
\nourselves to the brink of the collapse of our life, something
\nmust be done. Fair trade is one of the answers, but not the only
\none. Many more are still required.<\/p>",
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