Towards Fairer Trade

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It is easy to find cheap goods in the market, but finding out why they cost so little is not always that easy. How about that cotton shirt you just bought for a few dollars? A typical cotton producing household in West Africa has about 10 family members. Their average life expectancy is about 48 years, and their adult literacy rate is less than 25 percent. Cotton is often the only source of cash for these families, who live on less than $1 a day per person.

Why do we put up with this kind of thing? The answer is obvious. If working conditions at factories were visible to consumers at the point of purchase, it would be harder to convince shoppers that cheaper goods are worth the price of worker abuse. This is simply another way of saying “out of sight, out of mind.” Fortunately, many people are waking up to the basic unfairness of world trade and are demanding better deals for the people who do our dirty work. This is called “fair trade.” Let’s find out why it is important and how it works.

Why free trade often means unfair trade?

“Free trade” is a part of globalization, and it sounds great in theory. If we removed all barriers to trade, such as import tariffs, all countries could compete on a level playing field. What could be fairer than that? In practice, it does not work out quite like that. Some countries are inevitably far more powerful than others, and they want things to stay that way. Even while promoting free trade, they use all kinds of methods to ensure that they can trade more freely than other countries.

According to advocates of globalization, free trade has brought greater wealth to people in poorer nations, giving them a foothold on the ladder of progress and prosperity. Wealth gradually “trickles down” from the richest to the poorest, making everyone’s lives better in the long run. The trouble is that very often it does not. Now there are many good examples of companies working respectfully with partners in developing countries, providing fair prices that help communities gain access to such vital things as education and basic health care. But there are many more corporations supporting a shadowy world of sweatshops, where working conditions are appalling and wages are too low to allow workers to meet even their basic daily needs, let alone enable them to climb out of poverty. If the “trickle-down” theory works, why are so many of the world’s people still in poverty?

What is fair trade?

Fair trade is a different system that starts from the premise that workers’ lives have value. This social benefit is partly what you pay for when you buy something. Fair trade does not just mean farmers and producers receive more money so that they can support their families in the short term, although that is vitally important. It also means they work under long-term contracts, so their communities have enough security to invest in improvements both to their businesses (with more land or animals or better machinery) and their societies (with things like schools and hospitals).

Typically, fair-trade producers are small cooperatives of workers using no child or forced labor, relying on organic or environmentally sustainable methods, and having high standards of animal welfare. Workers are free to join unions and bargain collectively to help improve their lives. Typically, fair trade producers sign up for some sort of labeling scheme that guarantees things have been made under good conditions.

Is fair trade as good as it seems?

Fair trade sounds brilliant, and it is now a very big business. In the UK alone, annual sales of fair-trade products topped half a billion pounds (one billion dollars) in 2008. But fair trade is not without its drawbacks. One obvious problem is that fairly traded goods can cost significantly more. Though the difference between a fair-trade candy bar and an ordinary one is often marginal, fair-trade clothes or household items can be significantly more expensive than goods traded in the usual way. Many people, especially those struggling to get by on low incomes, cannot afford to pay the difference. If fair trade really is claiming to help poorer people and make the world fairer, should it not be aiming to help poorer consumers as well as poorer producers?

There is also the danger that fair trade remains a token gesture that is more about making middle-class, liberal-leaning consumers feel less guilty. If you return home from the store with a bag of fair-trade coffee in your shopping bag, and feel good about it, maybe you will not worry that the other 99 percent of the items you purchased were produced by unfair trade practices.

In addition, there is a possibility that the term fair trade can be misused. One often cited problem with the UK Fair Trade symbol is that it certifies only raw materials and not finished goods. You can buy a T-shirt made from fair-trade cotton that could, in theory, have been made into a finished article in a sweatshop. There is nothing to stop the manufacturer from advertising this as an ethical shirt and branding it with a fair-trade logo. Consumers who think they are choosing an ethically perfect product might actually be buying clothing sewn with child labor or finished in a dangerous sweatshop.

It is for reasons like this that some proponents of fair trade avoid using the term altogether. There remains an enormous discrepancy between the pay, conditions, and opportunities that most people would regard as acceptable and those of the producers of most products being bought. Claims of fair trade are therefore misleading. It is shocking and in itself a great injustice to say “This is fair trade,” to workers whose pay is not sufficient to allow them to have an adequate quality of life.

Some proponents of fair trade therefore promote their products as a step “towards fairer trade.” Ultimately, that is perhaps the only honest approach. Buying fair-trade products is almost always preferable to buying (implicitly unfair) alternatives, but it’s only a starting point. Trade is about long-term relationships, not just between producers and consumers but between entire countries and regions of the world. Achieving truly fair trade means seeing the world in a different way: as a planet of partnership and mutual prosperity rather than plunder and exploitation. Fair trade is not about paying 50 cents more for your coffee. It is about caring for your neighbors even when they’re on the other side of the world.