Saturday, May 12, 2007

Is Fair Trade Fair?

Does anyone know anything about Fair Trade? I've only heard wonderful things about it & as today's Fair Trade Day, thought I'd look into it. (i.e. procrastinate from paper) First, The World Fair Trade Day website. It presents a convincing case for how Fair Trade improves the lives of families, allows kids access to education and so forth. They even have a diagram showing how it all works! Except it relies on labels rather than explanations to make its point. So, feeling warm and fuzzy, I decided to check Starbuck's website (which is worth visiting just for the music) and see what they do about their coffee sources. First, I've always liked Starbucks; they may be on every corner, but the coffee is good, the service is consistently pleasant whether you're on the turnpike or the corner and they at least claim to be socially responsible. Yet, only about 3% of their sales come from Fair Trade coffee. So are they improving some lives at the expense of others?

Wikipedia suggests the following: "Groups such as Global Exchange are calling for Starbucks to further increase its sales of fair trade coffees. However, fair trade certification can cost $20,000 to $30,000, and many growers are unwilling or unable to pay for certification. As a result, the supply of fair trade coffee is increasing slowly, and Starbucks claims difficulty in finding fair trade growers that can meet its quality standards" Wikipedia.

Here are my questions:

  • who pays for "fair trade certification"?
  • who benefits from this money?
  • How can a small group of farmers afford $20K if they can't send their children to school?
  • Is this automatically privileging only parts of communities?
  • In other words, have we jumped on a bandwagon that sounds good, but ultimately just creates another organization that makes money from a brand?
I think this needs further exploration -- if you have any comments, or websites to check for answers to these questions, please leave them in the comments below!


Tim said...

I think the issue of fair trade is an especially important issue in the age of a global economy. With the explosion of communications technology and a growing and willing labor force in countries like China and India more and more jobs will be able to be outsourced electronically. What will happen to the millions of American workers who've played the game right...gone to school, gotten a degree and a good job...only to find out that they're suddenly obsolete and displaced workers?

In general I believe in free trade but more and more I also believe in fair trade. If companies were required to adhere to some minimum standards of pay, benefits, and working conditions it would be better for workers everywhere. I think we need to write fair trade standards into all of our future trade agreements and amend agreements like NAFDA to include fair trade standards. It would be the simplest way to dis- incentivize companies from outsourcing American jobs.

Chelsea said...

I think you've hit one of the many nails square on the head -- if fair trade becomes a standard rather than a process that needs special certification then we will see its true goals realized!

The idea that it would prevent outsourcing, though, seems more complex as fair trade doesn't raise incomes to American levels, but to local ones. Thus, it might still be cheaper to outsource, it just wouldn't be at the expense of virtually enslaving foreign workers.

Perhaps another aspect of this is to consider what is happening with cities and states that are increasing their minimum wages -- people find that the extra costs are passed on to the consumer (and the price increase there is negligible) thus the impact isn't a problem. Maybe if we resolved the health insurance problem, outsourcing would soon be seen in a similar light?

Tim said...

I definetly think fair trade should be a standard part of our trade policy. You're right fair trade won't stop the outsourcing of jobs...and again, in the broad sense I believe free trade and a world market are good things and are, in any event inevitable...but coupled with more investments in education and job training and a more generous safety net for displaced workers it would help stem the tide and make for a more orderly transition.

Health care costs are the Achilles heel of the American economy. If we
don't get a handle on the spiriling costs of health care the American worker will never be competitive in a world market and it'll just accelerate the oursourcing of jobs. And of course after being ignored by the Bush administration for eight years the problem will only have gotten worse.