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Fair Trade for an equitable economic order

Report written by : Neha Bhayana, Roshani Parekh Facilitator :Carolina Reintjes Organisation/Country: REAS, SPAIN


Key words:

Fair Trade, equitable economic order, neo-liberal policies, level playing fields,


KEY ISSUES DEBATED

Fair Trade aims to uphold human dignity and work for human development by ensuring that the producer earns a fair price for his product and the consumer gets value for his money.

The opening of markets leads to financial volatility, economic uncertainty, reduced job security and cultural insecurity among others.

As a result of liberalization, around 13 million people have lost their jobs and real wages are down by 30-40% in developing countries.

A reduction in subsidies by the US could mean from 60 to 300 billion US dollars going for the farmer’s welfare. Impact of neo-liberal policies on the environment was also mentioned at the seminar, though not discussed in detail.


CONVERGENCES

There was consensus on the need for a level playing field for the North and South. The speakers were of the view that the North enjoyed unfair advantages over the South, both on account of historical reasons and its capability to leverage finance capital.




DIVERGENCES

There was a possible divergence with regard to special and differential treatment for fair trade. While one section seemed to be in favour of it, Anne Francoise pointed out that there are risks involved.


STRATEGIES

In order to make the practice of fair trade possible and more effective, the panelists and participants at the seminar on Fair Trade for an Equitable Economic Order put forth a number of proposals for different groups, organizations and nations.


For unfair trade

•Dismantling of subsidies in agriculture, which is the core of the economic policies of developing nations.
•Special treatment/concessions in international trade negotiations to ensure that new regulations do not lead to unemployment, poverty etc.
•Removal of barriers to Fair Trade.


For WTO

•A new structure monitored by the UN and consideration for social, cultural, environmental factors and food sovereignty.
•Inclusion of the question of fair pricing on the agenda.


For WSF

•Development of a fair economic order through civil societies throughout the world.
•Making Fair Trade the economic agenda of WSF as a response to the World Economic Forum, which glorifies the pursuit of wealth.


For India

•To use India as a testing ground for Fair Trade practices and thereby create a model for the rest of the world.
•To create awareness and gather support.


PRESENTATIONS

Speaker :Mr. S.N. Menon,
Organization/Country : Special Secretary, Department of Industry and Commerce, Government of India.


Key issues focused:

The movement towards ‘Fair Trade’ in India has come a long way since the ‘60s when the revolutionary slogan ‘Trade not Aid’ was coined in New Delhi with reference to the aid provided by international organizations and developed countries to their developing counterparts. There is need to look at the agrarian sector in countries like India, South Africa and Brazil, which had primarily agriculture-based economies. Roughly 650 million people are dependant on agriculture in India alone and therefore agriculture cannot be divorced from fair trade. There is need to improve rural infrastructure, increase private sector investment and ensure support of civil societies. In order to preserve the socio-cultural identity and be self-sufficient, developing nations need to look at benevolent or alternative trade practices.

The seminar touched on economic globalization and its impact on society. It was pointed out that that there is need for a level playing field between the North and South. While on the one hand Mr. Menon acknowledged the call for developing countries in the South to leave the WTO, on the other, he displayed a sense of optimism keeping in mind the integration of the South East Asian countries to fight for a fairer system.


Challenges/Risks

The 3 main challenges/risks involved in practice of Fair Trade were identified by Anne-Francoise Michalon as:
•The need to clarify the standards of a ‘fair price’ considering the prices of Fair Trade products have remained the same in recent years while production costs have increased and the need to explain them to a consumer.
•The needs to define the relationship between producing organizations and importers and the role of the importers who have a final say in accepting a product at a certain price.
•The need to ensure that international companies not only give the produce a good price but also give the consumer a good deal for the price he pays
•The need to educate the civil societies.



Innovative Ideas

A suggestion was made to integrate the retailers and fair trade organizations. The method, however, was not discussed.


Questions up for debate:

Some questions relating to the implementation of Fair Trade were raised and remain up for debate. •The issues relating to the determination of a fair price and the need to constantly review it in relation to the current market price of the product.
•The issue relating to market regulations.


Conclusions:

The panelists came to the conclusion that in order to strengthen the movement for equitable trade the need of the hour is to:

•Continue to encourage the public and media to support Fair Trade.
•Ensure accountability, transparency and corporate social responsibility.
•To spread awareness about conventional trade practices and the alternatives.

The need to have an informed consumer who consciously chooses a brand or product that is free of exploitation was recognized by everyone present. Safia Minney (People Tree – Britain and Japan) aptly referred to this consumer as an ‘ethical consumer’.

The other speakers were : Prof. Ranjan Mitter of IIMC, Ms. Francoise Michalon of Artisans du Monde, Mr. Mike Muchilawa (FTO Mark), Mr. Rudi Dalwai (Global March) and Ms. Safia Minney.

 

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