BY SEAN HEALY
As unifying slogans go, "Fair trade, not free trade" has a lot going for it: it's simple, it stands against the injustice of corporate-dominated trade masquerading as "freedom" and it poses at least the beginning of an alternative vision. No wonder it was popular at the November protests in Seattle against the World Trade Organisation (WTO) and that it continues to gain currency.
But while campaigners can agree on a standard definition of what they oppose ("free trade": a trade regime which grants open access to transnational corporations at the expense of pretty much everything and everyone else), a common definition of what they propose, "fair trade", is harder to come by.
Just as there are wildly divergent opinions as to what should be done with the institutions of corporate "globalisation" (fix them or nix them?), what strategies should be adopted (inside at the table or outside on the streets?) and who should be allied with (US President Bill Clinton or socialist president of Cuba Fidel Castro?), so too there are moderate and radical versions of fair trade.
Business plan
The first, and probably original, version seeks to harness consumer power to build an alternative trading system. This is fair-trade-as-business-plan.
"Free trade" is based on the myth of the level playing field, in which buyer and seller come together on equal terms, work out the best price for the goods they're interested in and go away happy. Actual buyers and actual sellers are far from equal, and therefore far from free — markets are controlled by their biggest players. In an "exchange" between a smallholder growing coffee in Ivory Coast and a multinational food company based in Switzerland, there are no prizes for guessing who dictates terms.
The solution, some argue, is simple: let's build a trading system in which we pay Third World producers fair prices for our consumer goods, encourage value-adding in the countries of origin, and support cooperative-based and ecologically sustainable patterns of agriculture.
Groups like the Victoria-based People for Fair Trade, which produces Tradewinds-brand products, do exactly this — they pay a 25-40% premium on top of the world price, buy their stock from cooperatives in Sri Lanka, Papua New Guinea and other poor countries, and market them as "fair trade" items. Even larger concerns operate in Britain, the United States, Canada and other developed countries.
But, while they aid the poor communities concerned, such fair-trade businesses are on the very edges of consumption. People for Fair Trade's June newsletter reports that the larger British group's sales of fair trade coffee have doubled every year for the past six years — but still amount to only 3% of total coffee sales.
Friends of the Earth's Cam Walker supports these trading initiatives noting that FoE has a successful food cooperative based on similar principles. But, he said, "they're not ever going to be the main game".
"The whole structures of trade are geared towards being unfair; individual initiatives are not enough", he told Green Left Weekly. "The immediate level has to be supplemented with a global level, towards changing those structures."
There's a further problem: as fairly traded items become more popular, they attract the attention of the very companies they're supposed to be alternatives to. The giant US coffee chain, Starbucks, a target of protesters' ire in Seattle, announced in April that it will stock a line of fairly traded coffee, for example.
Some have welcomed the company's decision, pointing to the communities who will directly benefit from premium prices. Others, though, see it as little more than public relations, a decision which costs the company little but allows it to protect its all-important brand name. The label "fairly traded" becomes Starbucks' magic wand, with which it waves away criticism of all its other dodgy practices.
Negotiating strategy
The second version of fair trade is the one getting the most coverage in the mainstream media: fair-trade-as-negotiating-strategy.
The International Confederation of Free Trade Unions, other union federations around the world (including Australia's ACTU) and the largest non-government organisations like Oxfam are all on record as supporting a "social clause": that is, writing specified labour standards into existing and future agreements negotiated by the WTO. Particular targets would be countries allowing child labour or forbidding the formation of unions.
By doing so, social clause advocates argue, fairer trade will eventuate. Barbara Shailor of the US labour confederation, the AFL-CIO, compares her organisation's efforts to those at the turn of the 20th century to incorporate minimum wages and the eight-hour day into labour laws.
Doug Cameron, the national secretary of the Australian Manufacturing Workers Union, has added another proposal under the heading fair trade: a "social tariff", in which goods from countries with oppressive labour laws and practices and/or no environmental regulations would attract an extra charge. The proceeds, Cameron proposes, could be used either for development aid or as assistance to Australian exporters that have to compete with goods from such countries.
The social clause proposal proved intensely controversial in Seattle. In an attempt to dampen the protests, Clinton embraced the proposal midway through the ministerial, thereby managing to split the AFL-CIO (which was keen for a place on a WTO labour rights working group) from the rest of the anti-WTO campaigners.
But Third World governments and non-government organisations were near unanimous in their rejection of the social clause idea, condemning it as covert protectionism and yet another Western manoeuvre to deny them access to US and European markets. They pointed out that the US is a signatory to only one of the seven core International Labour Organisation conventions that a social clause would be based on.
Although social clause proposals are controversial, they are far from radical, which is why many left-wing campaigners argue against them, saying that social clauses will change little and legitimise the very institutions that enforce unfair trade.
"The worst thing that could possibly happen is if more power was given to the WTO", the Democratic Socialist Party's Jorge Jorquera told Green Left Weekly. "Labour standards may look good on paper but, in the hands of the US government, corporations or WTO dispute resolution panels, they'll turn into their opposite. They'll be selectively used and they'll make things worse. Can anyone seriously imagine the US allowing such clauses to be used against exploiters like Nike?"
Jorquera, also an organiser of the S11 protests planned for Melbourne when the World Economic Forum meets there on September 11-13, fears Western governments are supporting a social clause in a so far successful attempt to tame union opposition to "free trade". Instead, he argues, the movement should be calling for the WTO to be stripped of its powers and closed down altogether. "There is no way trade can be made fairer while the WTO controls it", he said.
While admitting that FoE "oscillates" on whether to abolish or reform the WTO, Walker is also dubious about the benefits of social clauses. He points out that getting a social clause into WTO agreements means supporting a new round of WTO trade negotiations, the very thing the protesters in Seattle fought to prevent.
"Maybe if there were negotiations going on, you could argue that social clauses and the like should be supported, they might have tangible benefits", Walker said. "But, at present there are no such talks and we're opposed to any new ones starting. Nothing new should be considered or discussed until we know what the environmental and social effects of the last round of trade talks are."
Walker also said the WTO has "failed dramatically" to implement the environmental stipulations in its existing agreements, which doesn't bode well for any future labour standards. "The test cases so far have resulted in the undermining of specific conditions and environmental standards", he said. "They've proved such commitments are meaningless."
There are even doubts as to whether a social clause or a social tariff would affect the specific abuses they're directed against. Tariffs on unfairly produced goods affect only those sold abroad — but just 5% of goods made with child labour are ever exported, according to the United Nations. The remaining 95% would be unaffected by a social clause.
Radical overhaul
Both Jorquera and Walker argue that if fair trade is to mean anything, it has to be about more than piecemeal measures which don't change the workings of the current trade regime. A radical overhaul is needed.
"You can't have trade which is really fair", Walker said, "until you address why it was unfair to start with. You have to deal with the historical contexts like colonialism or the massive ecological debt the North owes the South for ripping off natural resources. Those debts need to be recognised and paid off."
Jorquera believes that as long as the big corporations dominate production, and as long as Western governments write the rules, the field of trade will be steeply slanted against the poor and wealth will flow to those who already have it.
"That's just what markets do", Jorquera said. "It's what capitalism is all about: it exploits. So long as the rules of trade are the rules of the market, so long as it's about money and profit, there can be no such thing as fairness.
"What the Third World, the whole world, needs is a system of trade and aid and investment which slants things the other way, so that wealth flows to the poor, so that there's a global redistribution of wealth and power. That requires a revolution in the way the economy and society works. It means the economy has to be planned democratically. It means wealth has to be collectively controlled and directed to where it can have the best social use."
The way Jorquera puts it, "You can't stop a juggernaut by rewriting its operating manual. You need to put a bomb under it, then rebuild from scratch."