Category Archives: Fair Trade

Fair Trade USA vs FLO on scaling up fair trade

It’s been a long time since I regularly followed the fair-trade movement. But Kim Elliott brings interesting news: “the pending break-up between the main US certifier of fair trade coffee, Fair Trade USA, and the international umbrella organization, the Fairtrade Labeling Organization (FLO).” Apparently a major element in the split is that Fair Trade USA is certifying large-scale plantations while the international organization remains committed to only certifying smallholders.

Woods vs Bhagwati: Freer vs fairer trade

Earlier this month, Oxford’s Ngaire Woods and Columbia’s Jagdish Bhagwati debated the merits of free trade versus fair trade at the Economist. Aaditya Mattoo, Simon Evenett, Kevin Watkins, and Thea Mei Lee also contributed along the way. The motion: “This house believes that making trade fairer is more important than making it freer.”

I think the debate suffered from a proliferation of competing definitions of fairness, a problem noted by Evenett that is inherent to the topic. Such online debates usually produce more questions than conclusions, which makes them useful introductions to an area of inquiry.  This debate might be a good means of motivating an undergraduate class discussion of international trade and global governance.

[Hat tip: Eagleton-Pierce.]

Against the Democratic trade agenda

An Orange County Register editorial calls Democratic demands for labor and environmental standards “deal-breakers for genuinely freer trade.”

In a BBC interview (RealVideo), Cato’s Dan Ikenson says that the magnitude and timing of Democratic demands suggest they’re trying to terminate TPA rather than actually adopt their agenda.

Public opinion favors regulatory standards in trade agreements

The result of polling people in seventeen countries:

Strong majorities in developing nations around the world support requiring countries that sign trade agreements to meet minimum labor and environmental standards, a multinational poll finds. Nine in 10 Americans also support such protections.

If domestic constituents support labor and environmental regulations, why do they need to be tied to trade agreements?

Possible answers:

(1) Domestic constituents favor legislating these standards independent of trade agreements, but the survey didn’t ask the question in that form. Poor country policy makers aren’t responsive to their constituents’ opinion on this issue, in trade talks or otherwise.

(2) The meaning of the phrase “minimum standards” differs across users. Poor country governments reject strict standards designed to protect rich country proponents, but they would favor standards better tailored to their circumstances.

(3) Developing country citizens feel that international commerce differs in important ways from domestic economic activity and therefore should be conducted under different rules.

Other hypotheses?

Fair trade fakers

National Post:

According to a CBC report published this week, TransFair Canada, the most prominent Canadian fair-trade monitor, is joining with fair-trade retailers to raise concerns about unethical rivals who are horning in on the label without, as it were, walking the walk. Anybody can slap a sticker reading “fair trade” onto a bag of coffee, and apparently it happens rather a lot. At least one coffee shop is pressing Ottawa to regulate fair trade certification.

The Economist on food politics

The Economist has an excellent article (subscription required) this week on the appeal of organic foods and fair trade products. It also introduces us to the local-food movement, with which I was previously unfamiliar:

The rise of “Big Organic”, the large-scale production of organic food to meet growing demand, has produced a backlash and claims that the organic movement has sold its soul. Purists worry that the organic movement’s original ideals have been forgotten…

Local food need not be organic, but buying direct from small farmers short-circuits industrial production and distribution systems in the same way that buying organic used to. As a result, local food appears to be immune to being industrialised or corporatised.

The discussion of fair trade coffee echoes the objections documented in Kerry Howley’s piece for Reason, “Absolution in Your Cup.” So does the conclusion:

The idea of saving the world by shopping is appealing; but tackling climate change, boosting development and reforming the global trade system will require difficult political choices… Conventional political activity may not be as enjoyable as shopping, but it is far more likely to make a difference.