This is a topic I happened to chance upon during the progression of my Ethics and social responsibility course at school. I thought this topic was particularly interesting and decided it was time to shove some more opinions down your throats.
Fair trade is a tricky topic – while Fair trade takes a good stand for imposing ethically sound principles in manufacturing goods, it also has its criticisms. From a first look, what I can say is that Fair trade is good in principle - it protects farmers and small scale producers from foreign companies that poach cheap labor. Under the right guidelines and circumstances, it has seemingly done well - it has alleviated working conditions, increased employee wages and helped in structuring unions that elevate workers’ rights. Fair Trade, to an extent also balances the lack of strict government policies for minimum wages, working conditions and worker payoffs. It also protects workers from local companies that might want to exploit this lack of regulations to act as middlemen providing the cheapest product to both local and foreign markets, who may be unaware of the working conditions in which the product has been made. It is a great step towards increasing ethical standards of working all around the world.
As wonderful as it sounds, why hasn’t it caught on as quickly as some of the other larger world movements – like the green movement, for example? A movement such as the green movement has much more tangible benefits for the countries involved than does Fair Trade – a lot more people are sufficiently educated on the effects of climate change, melting of the polar ice caps, global warming and their carbon footprint than they are about the unethical working conditions of a farmer in Colombia or Costa Rica.
Another reason is how profit making companies can choose to contribute to the movement – with Fair Trade, they see an obvious increase in product prices, which they will, eventually, pass on to their consumers – they will see a drop in consumers, drop in profits and a dip in share prices. They’d rather stick to their current plan than be a part of this dim forecast. On the other hand, companies can contribute to the Green movement in any number of ways, starting from small changes on the factory floor to exchanging emissions with other companies (or countries) or making use of Personal Carbon Trading. This brings me to my next point – government intervention. Notice the extent of government mandates with regard to reducing pollution and global warming versus their decrees to impose Fair Trade. As long as a profit making organization has a choice – it will not choose to produce something more expensively unless it has to. The reason is simple – if it does take the moral high ground and try to lead by example, their loss in profits will simply crush them in the free market, unless it has some encouragement from the government to do so.
There are a multitude of other problems with Fair Trade, starting with corruption to plain old boring demand and supply. Starbucks – it is a company that has such a strong brand name and loyal customer following. When they decided to offer the option of “Fair Trade Coffee”, there was criticism of the company acting unethically and “depriving farmers in Ethiopia of $88M a year by opposing the Ethiopian government’s efforts to trademark three popular varieties of local coffee bean.” Take another company with a strong brand loyalty – Apple. The company that produces Apple products, Foxconn, has factories in China with workers working inhumane conditions and horrendous work hours. The result - a brilliant piece of engineering innovation at your nearest electronics outlet for a fairly reasonable price. What would happen if Apple decided to go “Fair Trade” and route the manufacturing to a place with better government regulations on working conditions? An iphone 4S that costs CAD749 may end up costing twice, maybe three times as much. The question we would then need to ask is – how high a price do people want to pay for “ethically made goods”? Will they be loyal enough to the brand to take a stand along with them and support their initiative? Or will they desert them and move on the next company that offers a reasonably priced phone?
As it stands now, Fair Trade, while good in principle, sadly has a very real possibility of quietly fading away because it is impractical, and simply does not tie into the economic framework within which profit making companies operate, unless the governments involved take steps to making Fair Trade a mandatory policy. The only way a movement like Fair Trade will ever become a revolution is if society as a whole is willing to pay the price for it – as they are with global warming and the green movement. They need to be educated in the long term implications of producing something unethically, and what it speaks about them as a culture, from a perspective other than the ones offered by charities and non-profit-organizations.
