Trade justice
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Trade justice is a campaign by non-governmental organisations, such as consumer groups, trade unions, faith groups, aid agencies and environmental groups. These organisations lobby for changes to the rules of world trade so that poor people can work their own way out of poverty - essentially for trade justice not free trade. The Trade Justice Movement (TJM) is a formal coalition of these groups. The term "trade justice" is more common in the UK, where "Fair trade" usually refers to Fairtrade certification.
Although some see "trade justice" as having much the same meaning as "fair trade", many use the former term to denote the campaign against what they see as the injustices of the current international trade regime. They aim to influence powerful international organisations such as the European Union (EU), International Monetary Fund (IMF), World Bank (WB), and World Trade Organization (WTO) to prioritise poverty reduction when making international trade rules.
When developing countries export to Northern markets, they often face tariff barriers that can be as much as four times higher than those encountered by Northern countries. Poverty advocates claim that those barriers cost poor countries $100 billion a year - twice as much as they receive in aid.[1]
Some campaigners focus on the way that agricultural subsidies and tariffs in the West make it difficult for farmers in poor countries to compete. For example they argue that the European Union's agricultural export subsidies encourage overproduction of goods such as tomatoes or sugar, which are then sold cheaply in poor countries. Local farmers can't sell their goods as cheaply and go out of business.
The campaign points to the treatment of agriculture at the WTO, which has institutionalised these injustices. In the few instances where developing countries have used the complex and expensive WTO process to declare subsidies (eg US cotton subsidies) excessive, developed countries ignore these rulings, which the WTO itself does not enforce. Recently rich countries have begun to talk about cutting export subsidies, but they often demand greater access to poor-country markets in return.
The term "trade justice" emphasises that even if the playing field were level, instead of tilted against developing countries, the poorest developing countries in particular would still struggle to gain from trade if forced to trade under free trade terms. This is because of their overwhelming lack of competitiveness - poor countries don't have huge stocks of exports waiting to be shipped to rich countries, instead most small farmers want to be able to sell their goods locally. So those calling for "trade justice" often also defend the right of developing country governments to follow protectionist trade policies. They believe that poor-country governments should have the right to choose their own trade policies to best promote food security and to protect the livelihoods of agricultural producers.
The campaign for trade justice has its opponents. They argue that moving towards free trade is the best way out of poverty for poor countries. Their reasoning is that free trade would provide cheap consumer goods to people in poor countries, that privatisation is needed to transform inefficient nationalised industries, and that protection of small farmers is ultimately unsustainable.
History
"Trade Justice" and "Fair Trade" were originally used by those supporting social justice and the alleviation of the intense poverty found in many developing nations. They contrasted "fair trade" with 'unfair' international trade practices. It is associated particularly with labour unions and environmentalists, in their criticism of disparities between the protections for capital versus those for labour and the environment. The use of the term has expanded beyond campaigns to reform current trading practices, and major institutions such as the World Trade Organization which embody them. Now it has become a movement to allow consumers to choose not to participate in these practices. Fairtrade labelling or "Fairtrade certification" allows consumers to identify goods especially commodities such as coffee, that meet certain agreed standards of fairness.
Advocates of trade justice argue that growing inequity and serious gaps in social justice, and the global export of terrorism, are symptoms of an economic system that permits harms to be exported to other countries, while importing their goods. They point to extinction, deforestation, social unrest, as consequences of globalisation, and in particular of an unfair globalisation.
In the past, the responses sought by critics of the international trade system included various penalties on "unfair" goods. This argument generally made little headway against the long-term movement towards free trade; imposition of penalties for "dumping" was sometimes motivated by domestic political reasons such as the United States imposition of steel tariffs in 2001).
Today, the trade justice movement concentrates more on the abolition of agricultural subsidies and dumping, and to a much lesser extent on offsetting penalties on "unfair" goods. Indeed, although there are many who are still critical of free trade in general, there is a trend towards campaigning against what is seen as hypocrisy by developed countries in using protectionism against the poorest countries, especially in agricultural products, while requiring them to leave their own producers without protection.
Trade justice versus free trade
In the past, suggestions that "unfair" goods be taxed, or that standards such as those of the ILO be required in order for countries to participate in international trade,[2] have led to heavy criticism by advocates of free trade. Although many organisations and individuals involved in fair trade campaigns are still uneasy about unfettered free trade, they are now generally more cautious about arguing for protectionism or coordinated international intervention. There is a greater awareness that there is no single perspective from which trade is "fair".
However, there are also "fair trade" demands that come from the perspective of developing country producers - today the emphasis is on the lack of free trade caused by the protectionism, including agricultural subsidies, of the developed world. Without such rich-country protectionism, it is argued poor countries might stand a chance of seriously alleviating poverty; yet reducing it will lead to some producers in the developed world losing out. One reason for the increasing popularity of fairtrade labelling is that it avoids these issues of government intervention and complex and drawn-out negotiations between governments, allowing consumers to voluntarily help some disadvantaged producers in poor countries.
Free Trade as Trade Justice?
Free Trade advocates such as Brink Lindsey and Milton Friedman have argued that free trade is already fair trade because free trade involves voluntary transactions which in turn implies no coercion resulting from those transactions. They further argue that Fair Trade, if mandated by governments rather than implemented voluntarily, would result in high prices in the first world and slowed growth rates and higher unemployment in the developing world.
Large agricultural subsidies in developed nations impede the ability of agricultural producers in poor nations to exercise much of their obvious comparative advantage in agricultural production. Coffee is largely unsubsidized simply because it does not typically grow in the so-called "global north" where the most damaging subsidies are enacted. Combined with unfair tarrifs, critics claim these factors force coffee producers to compete among each other however they can, without the skills or market access necessary to produce much else. This artificially depresses prices and prevents producers from exiting the market when otherwise appropriate. As a result, many consumers choose to purchase fair trade goods believing that producers would be better able to use their skills given fair market conditions, and should not have to suffer due to harmful trade restrictions. Consumers may also recognize the ecological impact of so much excess supply of coffee and hope to take some action to promote sustainable and ecologically friendly growing practices that would not otherwise take place.
See also
- Corporate development
- Economic development
- International development
- Social development
- Sociocultural evolution
- Trade and development
- WTO
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References
- ^ Oxfam International. (n.d.) Rigged Rules and Double Standards URL accessed on August 2, 2006.
- ^ Italy
External links
Trade Justice Advocacy
- Oxfam's Make trade fair campaign.
- Christian Aid's Trade Justice campaign
- The Trade Justice Movement
- Student Trade Justice Campaign
- German Trade Justice Campaign
Articles and Papers
- "Trade Justice or Free Trade?", Globalisation Institute, 2005
- "The World Trading System is Corrupt and Unjust", New Internationalist 374, December 2004