Think of the Fair Trade story and chances are that you think of coffee, chocolate or perhaps a Fair Trade jewellery. The first product to carry a mass market fair trade label was coffee from a co-operative of indigenous farmers in Oaxaca, sold to consumers in the Netherlands.
The principles of Fair Trade are simple enough. At its core is the idea that producers, even in the poorest of circumstances, and consumers, even in the richest, can meet each other’s needs through trade and that markets can be reshaped around that act of co-operation. This is embodied in several ways across the Fair Trade movement, and the World Fair Trade Organization label is about the enterprises who produce what we buy – verifying that they and their supply chain is fully committed to Fair Trade.
But what if those rules and business models were applied to an entire economy? Can we have a Fair Trade Economy?
Now is not a bad time to ask that question. In the last year 80% of new wealth went to the richest 1% of the world’s population. Meanwhile, 3.7 billion people who make up the poorest half of humanity got none of that wealth.
Our economy isn’t working as it should. Alongside growth and record profits, we have stagnating wages, spiralling inequality and a planet stretched beyond its limits. We need innovation and fresh ideas and the experience of Fair Trade provides inspiration.
There are three changes which would need to be at the heart of a Fair Trade vision.
1.The terms of trade need to change
The terms of trade determine where money goes and the way businesses deal with each other when they buy and sell products or services. If cocoa and coffee markets pit farmers against each other, rewarding those who are willing to produce a set quality at the lowest price, we are creating conditions that trap people in poverty.
The alternative that Fair Trade presents is trade conducted in a spirit of co-operation and long-term relationships. The elements of this alternative include fair pricing, long-term commitments, transparency and genuine supply chain partnerships.
2.Dispersing economic ownership
It is a commonplace assumption that those who own and control businesses will be investors. As a result, ownership of the economy has narrowed rather than widened.
As the World Inequality Report argues “economic inequality is largely driven by unequal ownership of capital”. If the …