Fair Trade and Ethical Consumption in the
Alliance for a Responsible and United World

Proposal for the organization of a thematic group within the
workshop “a socio-economy of solidarity” 

Fair trade practices and campaigns for ethical consumption are, in their own ways, attempts to answer to the three major imbalances identified in the platform for a responsible and united world: imbalance between the North and the South of the planet, between the wealthy and the poor in each society, and between human beings and nature. It is no coincidence that, among the challenges that the platform for a responsible and united world invites us to meet, several involve questioning the habits of consumption and the regulation of trade exchanges in Western countries:

•	“Can alternatives to consumerism be promoted?”
•	“How can consumption be used as a leverage?”
•	“How can the development of world trade be made to serve the construction of a responsible and united world?”

These questions define a few of the essential elements in the search for “lifestyles that are respectful of other people and the biosphere” and for “equal and mutually enriching exchange”.

It is for this reason that in the last issue of “Caravan”, Pierre Johnson presented fair trade as one of the axes of exchange necessary for the construction of a socio-economy of solidarity

Fair trade
" Since the 1980’s, the Fair Trade system has been trying to set right unequal exchange between small producers of raw materials (like coffee, cocoa and bananas) in the South and the big corporations in the North who buy these products.  Respecting certain principles (such as set minimum prices and advances on harvest) enables the buyers to be included in an international register and gives them the right to use a fair trade label which can be recognized by the consumers. Fair trade thus transforms a simple act of buying into an ethical act, thereby making the buyer responsible. Since its introduction, the fair trade system has spread to new products. Though it represents a minute part of the sale of these products, it has the merit of bringing about certain improvements in the terms of exchange of the  products concerned.”
Newsletter of the Alliance for a Responsible and United World - #2, December 1998, p.12-14.

On their side, Lavinia Sommaruga and Federico Ceratti, two fair trade activists and allies, point out that fair trade and ethical consumption can be federative themes within the alliance. Because they simultaneously question production, exchange and  consumption conditions of goods and services on an international basis, fair trade and ethical consumption offer a perspective from which several socio-economical challenges at the heart of the allies’ preoccupations can converge.

Proposal for the organization of a Fair Trade group
in the SES workshop of the Alliance for a Responsible and United World

	The Alliance for a Responsible and United World seeks to link the capacities for innovation and proposal of all those in the world who strive for or aspire to live in a world respecting diversity.  It does not aim to replace itself to existing movements, but seeks on the contrary to relieve and amplify various proposals and actions, linking them with other issues and raising awareness among people from other backgrounds or countries.

	In this perspective, the ambition of the Fair Trade thematic group is to establish a fruitful dialogue between allies, producers, organizations, and other fair trade players. The results of these exchanges will be a contribution to the meetings of the Earth Citizens’ Assembly, and have an influence on fair trade practices.

	The main objectives of the thematic group are:

•	To build a space for debate and exchange (of information, experiences and proposals) on fair trade

•	To raise awareness about fair trade among the signatories of the platform for a responsible and united world

•	To put challenges of fair trade into perspective

The following pages present an analysis of the challenges of fair trade and of how it deals with  some of the socio-economic issues of our time. While this analysis is not an exhaustive presentation of fair trade, its aim is to offer some food for thought.  These pages are a first contribution to this new thematic group.

Fair trade and the world trade structures
1.	An answer to unfair exchange between North and South
Fair trade was born from the realization that trade exchanges between northern and southern regions of our planet were unbalanced.  Its initiators created mechanisms to begin counter-acting to a certain point the structurally unfavorable relationships for producers from the South, particularly with regards to the exportation of agricultural products. 
By directly linking producers from the South with consumers from the North and guaranteeing that the distributors will respect certain economic and social criteria, fair trade seeks to create a more equitable distribution of aggregated value between producers and importers, and guarantees a greater stability of prices and income of for producers, allowing them to obtain a more decent standard of living.

2.	The rise of “ethical consumption”
Fair trade aims to promote ethical or citizen-based consumption, as opposed to consumerism and different traditional consumer defense (which only focuses on the quality / price relationship). By creating labels, fair trade organizations have established a mechanism that allows consumers to find socially and ecologically fair products in their usual shops. These organizations have established economical and social criteria that can be monitored by granting labels to certain distributors and by registering producers’ organizations in the South in shared registers for each type of product.

	Arguably, fair trade has been a means of putting pressure on major distributors, who often feel obliged to provide more reliable information on production conditions of the products that they sell. Although it is a rather marginalized market, the existence of fair trade can also provide a means to regulate prices for export products with varying levels of efficiency on different scales (from regions of production to the world market).

3.	Changing the working rules of world trade and seeking a new world economic order

The main products imported through fair trade are agricultural products (coffee, tea, bananas,...) whose prices are more sensitive to the variations of world prices and to international agreements than those of manufactured or semi-manufactured products. Because of the limits of the alternative market, fair trade practices can for the time being only marginally compensate these tendencies.

	In this context, it is clear that beyond the development of fair trade markets, it would be useful to launch a dialogue between producer organizations from the South and operators of fair trade in the North in order to determine how to influence international trade negotiations and promote the regulation of world prices and a less speculative world economy. Fair trade could thus participate in the political struggle to organize global trade on a more equitable basis.

Fair trade, ethical consumption and workers’ economic and social rights
4.	Producer organizations
In order to participate in the fair trade market, small-scale producers generally need to establish democratic producer organizations. This condition is both real and legal: to appear in the Registry, producers need to be organized. This fact is worth being underlined, because in Northern countries,  even people concerned by fair trade often perceive the producer as an abstract species. This link between alternative markets and forms of organization underlines the relationship between economic justice and social rights (in particular the right of association).

	The existence of an alternative market is in a way a source of encouragement for producers to organize themselves, though this process can precede the existence of alternative markets. However, there are sometimes explicit or tacit disagreements between partners, relating to the conditions for entry into the Registries or the management of extra money.  Ideally, these differences should be debated democratically rather than hidden.

5.	Economic and social rights of workers
For several years now, there have been information campaigns in Western countries on the  working conditions of workers in the South. This movement, which stemmed from the desire of workers and unionists in the South to raise awareness about situations of inhuman exploitation and the difficulty in having their rights respected, is another means for creating consumer awareness.

	These demands are also taken on in importing countries by associations campaigning to inform consumers and to pressure transnational corporations to commit to respecting at least the elementary rules defined by WLO: the prohibition of forced labor and the exploitation of children, respect for the right to form trade unions, suppression of discrimination on the basis of  origin, gender or religion.
6.	Transparency and internal corporate control
Large distributor’s commitments to meeting fair trade criteria or respecting conduct codes based on social rights only have a meaning if these companies accept the existence of independent and transparent systems for control.  This brings up issues of power within and upon a large international corporations, as well as internal issues of  power concentration, access to information, decision-making process and employee, shareholder and consumer rights.

These issues are also linked to legal frameworks (share companies, social enterprises,...) as well as to the complex mechanisms of governance in transnational corporations. The necessity of external controls brings up the question of the possibility of independent evaluations, whereby legitimacy and means are sufficient for assuring the fulfillment of conduct codes signed by transnational corporations.

Fair trade and sustainable development
7.	Sustainable development and environmental conservation
The initiators of fair trade share the perspective on development whereby it is better to assist southern countries in assuring their own development, than to simply offer financial assistance, as expressed in the motto, “Trade not Aid”. But this new type of trade does not only suggest a monetary re-balance of trade terms, it also suggests the integration of social and environmental costs into product prices.

	This is congruent with the present movement of small-scale producers towards a type of agriculture which respects ecological balances.  Organic certification by specialized agencies (usually in the North) and further labeling are mechanisms for commercializing and identifying products which are close to those of fair trade. It is for this reason that fair trade and organic agriculture, though not the same thing, seem to move in the same direction and share common issues and complementary challenges. It would be interesting to explore them jointly.

8.	Alternative and solidarity financing
Fair trade has contributed to the creation of new financing mechanisms for supporting small-scale producer, such as partial pre-financing of crop or handicraft production and guarantees for bank credits. In some cases producer organizations themselves have created financial instruments for more efficient commercialization (mutual funds, credit unions,...).

	These innovations facilitate access to credit with reasonable rates for producers, as well as guaranteeing a continuity of economic activity in a changing context. It would be interesting to analyze the links between these innovations and the reinforcement of producer organizations and fair trade.

9.	The issue of land property and land reform
Fair trade still mainly deals with agricultural products.  New initiatives are emerging for semi-manufactured products (textiles, etc.) but this brings about many complex issues in terms of controlling specific criteria throughout the chain of production.  With agricultural products, fair trade strives to improve the income of producers from the South. The search for local sustainable partners leads to questions regarding the inequality of land distribution in many of these regions.

	For this reason, although the main focus of fair trade is on the structures and shortcomings of international trade systems, it is also closely linked to issues of land reform and the necessity of state support for disadvantaged farmers..

	Other issues, such as grass-roots development in the South, cultural respect, the role of women in economic production and exchange, and the power of multi-national corporations over states can also be discussed from a fair trade approach.  It is a rich issue which allows to create and consolidate links within the Alliance.

This text is a call to spark reflection about fair trade within the Alliance for a Responsible and United World.  It will be distributed within the alliance, with the goal of creating a list of persons who are involved or interested in this area.  Information about the alliance will also be sent to other fair trade activists.  From these contacts and exchanges will come a meeting of approximately fifteen people in 1999, with the objective of contributing to the collective process of the year 2001 Assembly.

Five allies have volunteered to promote this new thematic group within the alliance workshop “a socio-economy of solidarity” of the alliance, and beyond:

•	Lavina Sommaruga (Communauté de travail Swissaid, Action de Carême, Pain pour le prochain, Helvetas, Caritas) : sommaruga@dial.eunet.ch
•	Michele Papagna (ACEC - Associazione per un consumo etico e consapevole) : libceles@tin.it
•	Laurent Fraisse (ASDP – France) : fraisse@iresco.fr
•	Frederic Cerati (ACU – Italy) : ceratti@edv.it
•	Pierre Johnson : pjohnson@echo.org (facilitator of the Fair Trade workshop)

Contact us if you wish to join this group.  Your participation, documents, reflections, experiences and campaigns on fair trade are welcome.  They will contribute to preparations for a first meeting in 1999 and complement the following bibliography. 

Bibliography

Books :
- Pour un commerce équitable, Ritimo, Solagral, DPH, Passerelles, édition FPH, 1998 ;
- Annuario del Commercio equo, edizione 1998-99, FCE ;
- Commercio equo e solidale, IRER, 1997 ;
- La mode déshabillée : 12 questions sur l'emploi dans la confection textile, Carole Crabbée et al., publication soutenue par Magasins du Monde-Oxfam, Orcades, Déclaration de Berne, Artisans du Monde, 1998 ;
Le pouvoir des consommateurs, Peuples en marche n°139, octobre 1998 ;

Articles and Magazines :
- Le commerce équitable face aux défis du marché global : le cas du café au Mexique, Pierre Johnson, Economie et Humanisme, n°344, avril 1998 ;
- Commerce équitable : et si on faisait attention au producteurs ?, Sandrine Trouvelot, Alternatives économiques, n°149, juin 1997 ;
- Le commerce équitable à la croisée des chemins, Catherine Schümperli Younossian, Nouveaux cahiers de l'IUED, n°7, juin 1998 ;
- Turismo Responsabile, Federico Ceratti, Associazione Nazionale Turismo Responsabile ;
- Dall’appello per un Commercio Equo alla Fondazione Max Havelaar, di Lavinia Sommaruga, Comunità di lavoro Swissaid, Sacrificio Quaresimale, Pane per i Fratelli, Helvetas, Caritas, Briga 16/9/94
- Max Havelaar, contenuto dal punto di vista della politica di sviluppo, di Lavinia Sommaruga, giugno 1994
Clauses sociales, Chritoph Berger, Repères - Pain pour le prochain
Transport par avion et commerce équitable, le cas de TerrEspoir, Repères - Pain pour le prochain, 1998