Fair Trade and Global Responsibility

June 10, 2008
By Danielle Rathje, Newark, CA

In 1998, the WTO’S first director, Renato Ruggiero, said “We stand at the very beginning of a whole new phase of internationalism. We have an opportunity to reaffirm our political will to move towards a better system of global governance. The great promise of the new global age demands nothing else.”1 Today, the global economy, as Ruggiero highlighted, is a borderless one. Bananas in the grocery store come from thousands of miles away and a good amount of that smog encircling San Francisco and Los Angeles comes from China. It is an age of technology, innovation, and interconnectedness yet individuals, politicians, and leaders seek to ignore the fact that the coffee they buy or bananas they eat come from the labor of impoverished farmers disregarded by international and national policies and left behind in an age of technological innovation. Any individual, leader, or corporation seeking to ignore the fact that this is an age of global responsibility cannot plausibly and in good conscience do so. However, Multinational corporations (MNCs) from Starbucks to Néstle to Wal-Mart have come under fire for seeking to do just that and remain noncommittal about accepting their global responsibility. It is becoming increasingly difficult for consumers to get around the fact that an action as simple as buying a cup of coffee has global implications and feeds an unjust process. They must remember that these products do not appear out of thin air—there are people behind them. Corporations do not wish to put a face on what is termed “development” and, as a result, producers and growers slave to maintain a system in which they are largely ignored. MNCs believe they have no responsibilities outside of their countries’ borders and the consequence has been the subjugation and even enslavement of the growers and producers of the world.

Most countries, corporations, and individuals do not see fit to aid another country unless their own economy, safety, or interests hang in the balance. The agreements and policies of the advanced nations consistently advance their own interests at the expense of the poorer nations. This is certainly the case with regards to The North American Free Trade Agreement (NAFTA) as well as the General Agreement on Tariffs and Trade (GATT) and most of the decisions of the World Trade Organization (WTO).2 In the case of NAFTA, Mexican President Carlos Salinas recognized that NAFTA would be a bad deal for his country, owing to the vast difference in economic development amongst the signatory countries.3 In the end, however, he was given no alternative to pursuing greater economic integration with America. NAFTA effectively locked Mexico in its position of economic inferiority and that policy’s primary beneficiaries were the wealthy businessmen already benefiting from corruption and flawed economic policies in Mexico.4 Indeed, the primary effect of globalization and trade liberalization has been to cement the power of those already powerful and wealthy.

There is, admittedly, disagreement about whether NAFTA is the cause of Mexico’s economic disparity. Some argue that Mexico’s economic problems after NAFTA were due to the 1994 peso crisis. However, it is important to remember that NAFTA was, in fact, responsible for that crisis. 5 NAFTA was especially damaging to the poorest of the poor in Mexico, the small farmers, who have generally been the losers in all countries in the new international economy.6 Transnational agribusiness corporations in Mexico, as elsewhere, increased their market power through globalization while programs and infrastructure benefiting farmers were dismantled.7 Poverty in the Mexican countryside reached an astounding 75% after NAFTA and 600 campesinos were forced off their land each day at the height of the upheaval. 8 An estimated 1.5 million jobs were lost as prices paid to farmers dropped by 70%.9 Groups such as the Zapatistas and international organizations such as La vida campesina sprung up as a result of NAFTA and similar trade liberalization policies of organizations such as the WTO and the Free Trade of the Americas organization.10 The WTO, especially, is criticized for its neo-colonialist and imperialist policies. It is viewed as a vehicle primarily of the major industrial nations in their quest to pursue their own economic and political interests at the expense of Third World countries’ development prospects.11 Today, small farmers and artisans suffocated by MNCs and unfair policies of international bodies have banded together to, like La vida campesina, protest the unfortunate results of globalization and modernization. The fair trade movement is proving a useful ally for those trying to overturn the new global economic hierarchy.

Fair trade means the corporation selling a product has a direct relationship with the producers or growers of that product. It means creating cooperative workplaces, paying fair wages, and purchasing goods at a fair cost with an additional social premium. It means providing financial and technical training to the producers or growers, and engaging in environmentally sustainable practices. Eliminating even one of these tenets denies the system the label “fair”.12 Only recently has the term “fair trade” come into our vernacular. More and more companies are accused of buying products produced by farmers or workers under horrible conditions and with little compensation. Starbucks, Kraft, Néstle, and others have endured protests and public pressure to change their policies. In July 2006 in San Francisco one such protest was organized by Global Exchange to protest chocolate producer Néstle.13 Global Exchange had experienced victory in this struggle before; it is the California pressure group responsible for getting Starbucks to start selling fair trade coffee.14 The UN’s International Labor Organization (ILO) estimates that nearly 284,000 child laborers work on cocoa farms, most of them in Côte d’Ivoire, that provide to companies such as Néstle, Hershey, and Mars.15 The ILO states that these children are “either involved in hazardous work, unprotected or unfree, or have been trafficked.”16 Protest groups have videotaped conditions on some of the plantations and spoken with children who were as young as 12 when they were lured by traffickers to the cocoa plantations with promises of good wages and easy work. One Malian boy said “I tried to run away but I was caught…as punishment they cut my feet and I had to work for weeks while my wounds healed. I stayed in a large room with other Malian children from a neighboring plantation.”17 Fortunately, this boy was freed when another enslaved boy escaped and found his way to the Malian embassy. A diplomat there helped return the boys to their families. In 2000, 270 other children from cocoa plantations were repatriated to Mali but thousands more remain trapped in the system as indentured servants.18 Other children labor on banana, sugar, and cocoa plantations in Latin America and Africa as well as in carpet, rug, and jewelry factories in Asia. 19 In many cases, parents send their children to work because without the extra income they do not have enough money to feed their families. 20 While property and investment rights are protected, in great detail, under multilateral agreements such as GATT and NAFTA, the rights of workers, women, children, and the poor, have been consistently ignored.21These groups have paid and continue to pay the price for lack of global responsibility and compassion in international politics and decision making.

It is hard to imagine and difficult to accept that so much pain and suffering goes into the making of those tiny, delicious chocolate bars you see at your local grocery store or give children on Halloween. Most people in the advanced industrial nations are oblivious the fact that people thousands of miles and an ocean away from them slave on cocoa plantations to produce those chocolates. They are oblivious to the fact that there are 25 million coffee workers in the world who receive next to nothing for harvesting coffee cherries in the scorching sun so that we can have a cup of coffee Monday morning.22 (Interestingly enough, at the International Coffee Organization there are only 35 people at work to improve the lives of those 25 million-plus coffee growers). 23 This, of course, is the way most cocoa or coffee companies prefer it. It means they get the highest profit and customers get the lowest price, even if that means workers are subject to low wages and inhumane working conditions. Fortunately, workers have some protection through the United States’ Torture Victim Protection Act and Alien Tort Claims Act, which allow victims of human rights abuses who live outside of America to sue U.S. companies for violations of international law.24 Though they do not protect against all abuses and many companies escape the laws, they are nevertheless valuable tools in combating unfair trade. These statutes as well as the California Business and Professions Code (which prohibited Néstle and intermediaries ADM and Cargill from making false claims to the public suggesting that the problem of child slave labor was being resolved) were used to sue Néstle in 2005.25 These laws demonstrate very clearly that Americans and their politicians are awake to the lack of global responsibility, connectedness, and justice. They prove that there is such a notion as global responsibility in the first place, a responsibility for those outside your borders whom your actions affect. The struggle is how to enforce this responsibility.

In 2001 Iowa Senator Thomas Harkin led an investigation into the allegations of child labor on African cocoa plantations and introduced legislation that would have required chocolate sold in the U.S. to be labeled “slave-free”.26Regrettably, the proposed legislation was not enacted. It seemed, however, that Néstle and other chocolate makers had gotten the message through the ordeal when they, along with the ILO and several nonprofit groups, signed an agreement promising to find a way to certify chocolate as “slave-free” by July 2005.27 However, after the deadline had passed, according to a statement from Senator Harkin’s office, the companies’ assessments of their progress to eliminate child and forced labor from the cocoa fields was “discouraging.”28 Néstle and others blamed the lack of progress on the civil war raging in Côte d’Ivoire. However, nonprofit certifiers had managed to organize cooperatives and, as Terrence Collingsworth of the International Labor Rights Fund pointed out, “They say they can’t do anything—they say the civil war is escalating. But we can send our researchers in. And they don’t seem to have any trouble sending their buyers in.”29 Nestle was also involved in a baby formula marketing scandal and scandal involving the use of GMOs its products. In the latter, Greenpeace found that after promising to eliminate GMO derived ingredients, believed to constitute a danger to the environment and human health, Néstle was in fact just dumping those products still containing them into Asia countries while eliminating them from Europe and America to escape censure there.30 Clearly, for MNCs, globalization just means a bigger playground and more places to hide.

MNCs have annual revenues higher than the GNP of most countries and the rise of deregulation in America has made consumer activism one of few weapons to combat them. Without sufficient government and public pressure these corporations cannot be held responsible to consumers around the globe or to any government. Development, in this age, has been defined by their plundering of poor countries, undermining of local economies, and harming of the environment. 31 They exist in every sphere of economic activity in every country and their size as well as protections granted to them by governments allow them to make the rules. 32 They dictate terms to national governments and use their power to influence international trade agreements; the UN has tried for 17 years to draw up a code of conduct for them and has failed miserably. 33 There are, however, strong and vibrant signs of life in the fair trade movement which seeks to demolish the more egregious aspects of this system and build public pressure and resistance against it. This movement is a movement to force people to recognize their global responsibilities. The consumer holds the power, feeds the corporation, and will determine the path of globalization.

Buying fairly traded items, eating locally grown produce, eating organic foods, and the like are recent trends and not broadly shared, by any means, in the United States or any other country. However, slowly but surely, awareness is spreading. In 2002, there were only 100 “Fairtrade” certified products. Today, there are over 2,000. 34 In places such as the UK, consumers spend as much as half a billion dollars on “Fairtrade” branded products per year and there is increasing pressure on corporations to ensure that the products they sell are fairly traded.35 Companies from Sainsbury to Virgin Atlantic to Wal-Mart and Starbucks have stepped up to the challenge of ensuring fair trade with developing countries. 36 Public pressure has proved to be the teeth of the fair trade movement and as a result of such pressure in Britain the Co-operative Group has switched all of its tea and coffee to fair trade, Waitrose only sells fair trade bananas, and Marks & Spencer is planning to expand its fair trade clothing line. 37 Other popular brands such as Tate & Lyle, a multinational agriprocesser, have recently pledged to carry fair trade goods.38(In fact, Tate & Lyle has promised to make all of its retail fair trade by the end of 2009)39. While this new trend is apparent in both America and Europe it is clear that Europeans are far ahead of Americans in bringing fair trade to the market. Fair trade coffee began in 1988 in Holland and fair trade tea, chocolate, bananas, honey, sugar, and orange juice have been available in Europe since 1998.40 Deborah James, fair trade director of Global Exchange, says that Europeans are more supportive of fair trade and willing to pay the price for fair trade products because of their colonial pasts.41 Europeans, she says, “Have a direct understanding that the system of agriculture we have now—where farmers are exploited and their products unfairly sold—is based on a colonial system” whereas in the United States “We do not feel responsible for the fact that in the Winward Islands of the Caribbean people there are entirely dependent on banana plantations because we put them there.”42 Ronnie Cummins of the Organic Consumers Association says that Americans must reach the point, as they did when it became socially unacceptable to buy products from South Africa because of Apartheid, where it is similarly unacceptable to buy products resultant of unfair trade.43 Europeans’ experience with colonialism has awakened them to the linkages they have with people far from their homes and the devastating effects their countries’ economic ventures have had on these people. Americans know about something about sweatshop conditions in Asia and Mexico and know that the people who make Nike sneakers and Gap t-shirts work in unhealthy conditions for meager wages.44 They have yet to be fully awakened, however, to “sweatshop coffee”, as James’ organization calls non fair-trade coffee, and the unfair trade that governs global business.

While fair trade minded consumers are pleased with moves toward fair trade and the purchase of fair trade goods, they are often unaware of just how much of the extra cost they shoulder goes back to the producers and growers. Critics of the fair trade system claim that companies are only in it as a marketing campaign to make themselves appear more “green” and do not ensure that the producers of their goods get an adequate amount of the profit.45 Tim Hartford, who authored the book “The Logic of Life”, was first to highlight the fact that some chains were simply profiteering from the higher mark-up on fair trade products. He noted that, at the UK consumer end, companies have charged a higher mark-up on fair trade goods than ever finds its way back to the producer, making it an unfair deal for consumer and producer.46 Douglas Holt of Oxford’s Saïd Business School said the extra amount most fair trade producers receive is relatively “trivial”, adding that “until you can have the whole value chain, especially retailers, buying into fair trade and taking lower margins so they can pass on as much profit as possible, fair trade can never make more than a marginal difference.”47 Even Tate & Lyle’s move is expected to help only those farmers producing the retail side of its business, not its larger ingredients sector.48 Companies such as Starbucks that have given into public pressure still do not buy nearly as much fair trade product as they could; less than 4% of Starbucks’ coffee is fair trade.49 Claire Melamed of ActionAid says that fair trade is still “essentially a niche product.”50 The challenge is to get all trade conducted according to fair trade principles.

It is obvious that there is still much to be done to ensure that companies are held to their global responsibilities when they cannot be held responsible to their own consumers or to their own countries’ laws. It seems impossible, at this point, to imagine a place and time where the Enrons or Wal-Marts of the world will accept a pay cut to help starving Africans or the impoverished campesinos of Latin America. (To be fair, Wal-Mart has begun selling fair trade coffee and working with TransFair USA but it remains to be seen whether its new supplier, Bom Dia, will go the way of its previous supplier, Millstone, and, like about half of fair trade certified coffee, fail to actually sell the coffee at fair trade prices.)51 Nevertheless, some corporations have stepped up and reassured us that the current system can be changed and can be fair. When Green & Black’s organic chocolate company was sold to MNC Cadbury-Schweppes in 2005 many worried that the fair trade certified Green & Black would no longer hold to its fair trade principals.52 However, Cadbury remained committed to fair trade arrangements with Belizean cocoa farmers and the liaison between Cadbury and Green & Black provided the resources to plant nearly one million new organic cacao trees to help smallholder farmers keep up with increasing demand.53 Although there is work to be done, public pressure and the work of organizations such as TransFair USA are starting to make fair trade a reality and global responsibility an aspect of corporate agendas.

Fair trade has proved workable and translated into the empowerment of poor producers and growers in developing nations. For more than 6,000 farmers in Kenya it has increased their incomes by about a third, allowing them to pay school fees and healthcare costs that were beyond their means for generations.54 Moreover, bridges have been built, leaf collection centers upgraded for the production of tea, and an orphanage established.55 In India in 2004, 800 tea workers died of starvation after the closure of uneconomic plantations.56 They had lived off of rats and roots for weeks.57 Fair trade, it is no exaggeration to say, could have saved lives. Rosevaldo Jose Pereira, a Brazilian fair trade coffee farmer who supplies to Bom Dia, was able to get a new house (he converted the old one into a fertilizer warehouse) with a TV and spacious tiled kitchen, and afford braces for his daughter.58 The poorest farmers in his region of Minas Gerais have no electricity or running water much less TV. Blanca Rosa Molina, a Nicaraguan coffee farmer, says fair trade has allowed her to feed her family and keep her children in school.59 She has also been able to send her daughter to college and build a house. 60 Kuapa Kookoo (“The Good Chocolate Farmer’s Company”) of Ghana was able to form a democratic cooperative comprising 1,000 villages and tens of thousands of farmers.61 It operates on the national, regional, and village levels and runs a trading company, credit union, social development fund, and mobile health clinics.62 It has also financed water and sanitation projects, income generation schemes, schools, and corn mills.63 Not only has fair trade provided thousands of low income producers with a way out of poverty, it has produced a “multiplier” effect; there is more money spent and earned locally, more revenue for poor local governments, and the creation of more jobs in poor areas.64 Quality of life and education are increasing across the globe all because of a few extra cents for a cup of coffee, a banana, or a bar of chocolate and the previously downtrodden are now slowly moving into positions in power.

Fair trade has facilitated the movement of previously subjugated farmers and producers into leadership positions where they are able to better determine the rules of the game they have been thrown into. Fair trade producers learn valuable skills that enable them to become leaders of their cooperatives and attain better jobs. Maria Xoch, an employee at the main office of a weaving cooperative, the Asosiación Maya, previously worked as a domestic servant in Guatemala City for $40 dollars a month.65 She was forced to stay in the city the whole month and rarely had the opportunity to go home and see her family. Now, she enjoys her work, gets paid much more, and is able to go home every weekend.66 Xoch says that her work experience at the association has taught her about business and she will easily be able to find a job elsewhere.67 Antonio Chavajai Igreiraixatamer is president of La Voz Que Clama en el Desierto (“The Voice that Cries Out in the Desert”) and directs the business, meetings, work plans, and employees of the coffee growers’ cooperative.68 He also advises small growers and makes sure the community gets the full benefit of the sales of their coffee beans. He explains, “The coffee buyers always take us into account. We participate in the discussions, price planning, and delivery. The first person who has to know everything is me. After me, the manager and the board of directors are informed, and together we make the decisions.”69 Igreiraxatamer is able to bring up issues vital to the farmers and fight for their interests, rather than have their interests and voices be quieted and subjugated to those of the corporation. Another coffee grower, Guillermo Vargas of Costa Rica, says “When I think of fair trade, I think: fair for the producer and fair for the consumer. The people in between—the middlemen—should be the bridge, facilitating the trade. They shouldn’t secure all the benefits for themselves.”70 Currently, Igreixatamer is fighting to have the policy of fixed prices on coffee, set by the “middleman” company, thrown out.71 When coffee prices rise the farmers cannot demand an increase in price for their beans. 72 He praises the fair trade system because it grants the security for himself, his family, and his farmers that if the commodities price of coffee goes down their coffee will still be sold at the fair market price.73 However, he still believes that if the price goes up the community should get back some of the extra profit and, as part of the process rather than a bystander, he can fight for this.

As many proponents of fair trade have explained, fair trade producers must be allowed to become full partners and control their own fair trade business, as Igreiraxatamer and others have begun to do. This will maintain the connectedness between buyer and seller that is the core of the fair trade philosophy. A connectedness between person and person, between people and people, and sense of global responsibility is what should be gained from today’s increased technology, communication, and transportation. It should be our unity with different peoples and countries and responsibility to one another that is the focus rather than consumerism, economic rivalry, and the continuing quest to raise profit at the expense of the poor grower, producer, or nation. With globalization should come cognizance of global responsibility, not the creation of slavery and poverty for the enrichment of a few.

1. Litvinoff, Miles and Madeley, John. 50 Reasons to Buy Fair Trade. London: Pluto
Press, 2007. p9.
2. Das, Bhagirath Lal. The WTO and the Multilateral Trading System. New York:
Zed Books Limited, 2003. p21, 24.
3. Cornelius, Wayne A. and Weldon, Jeffrey A. “Politics in Mexico.” Longman Custom Comparative Politics. Boston: Pearson Custom Publishing, 2006. p262.
4. Rico, Enrique. “Mexican Opposition Calls for Rethinking NAFTA.” 25 Feb. 2008..
5. Stubbs, Richard and Underhill, Geoffrey R.D. Political Economy and the Changing Global Order. New York: Oxford University Press, 2006. p324.
6-8. “U.S. and Canadian Family Farmers Denounce NAFTA’s Impact on Mexico.”Organic Consumers Organization. 16 Jan. 2003. 26 Feb.2008.http://www.organicconsumers.org/corp/nafta011703.cfm>.
9. Stubbs p324.
10. Case, Brendan M. “NAFTA and Globalization is Killing Mexico’s Farmers.” 9 Aug. 2001. 29 Feb. 2007. Organic Consumers Organization. .
11. Das, Bhagirath Lal. The WTO and the Multilateral Trading System. New York:Zed Books Limited, 2003. p21, 24.
12. Camp, Wayne and Goodman, Jennifer. “So, You Want to Be a Fair Trader”. 19 Sep. 2005. Cultural Survival. publications/csq/csq- article/cfm?
13-17. Orr, Deborah. “Slave Chocolate?”24 April. 2006. 28 Feb. 2008. Organic Consumers Association. .
18. Off, Carol. Bitter Chocolate: Investigation The Dark Side of the World’s Most Seductive Sweet. New York: Random House, 2006. p133.
19-20. Litvinoff, Miles and Madeley, John. 50 Reasons to Buy Fair Trade. London:Pluto Press, 2007. p103.
21. Taylor, Annie and Thomas, Caroline. Global Trade and Global Social Issues.New York: Routledge Research Global Environmental Change, 1999. p39.
22-23. Clark, Taylor. Starbucked: A Double Tall Tale of Caffeine, Commerce, and Culture. NewYork: Little, Brown, and Company, 2007. p169.
24-29. Orr
30. “Greenpeace Barricades Nestlé in China to Stop GE Contamination.” 29 May 2001. 29 Feb. 2008. Organic Consumers Association. .
31. Litvinoff p27.
32-33. Litvinoff p23.
34. Litvinoff p146.
35-39. Mesure, Susie and Bloomfield, Steve. “Fairtrade Rises Profits, But is the Small Farmer Still Missing Out?” Organic Consumers Organization. 24 Feb.2008. 25 Feb. 2008. .
40-44. Straus, Tamara. “Starbucks Campaign Background Info.”Organic Consumers Association. 30 Nov. 2000.1 Mar2008..
45-50. Mesure
51. Mui, Ylan Qui. “For Wal-Mart, Fair Trade May Be More Than a Hill of Beans.”12 Jun. 2006. 29 Feb. 2008. Washington Post..
52-53. Reynolds, Laura T. and Murray, Douglas. Fair Trade: The Challenges of Transforming Globalization. New York: Routledge, 2007. p91.
54-55. Mesure.
56-57. Litvinoff p30-31.
58. Mui
59-60. Litvinoff p36.
61-63. Litvinoff p161.
64. Litvinoff p14.
65-67. Xoch, Maria. “A Better Life at Home.” Cultural Survival .4 Oct. 2005. 29 Feb.2008..
68-69. Igreiraixatamer, Antonio Chavajai. Cultural Survival. “Learning As They Go.” 4 Oct. 2005. 29 Feb. 2008..
70. Litvinoff p80.
71-73. Igreiraixatamer

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