Fair Trade: How Did We Get Here?

Jonathan Rosenthal has been working to make global trade more just for more than 25 years. He is a principal with Just Works Consulting, creating and managing projects that help strengthen the social justice commitments of mission-driven trade organisations. He co-founded Equal Exchange and Oke USA.

In this article, Jonathan highlights the importance of getting back to the roots of fair trade in order to move forward and become more competitive with corporate brands. He questions how we can help consumers to differentiate between alternative trade and corporate fair trade.

The roots of fair trade can be traced back to obligations and guidelines in ancient texts. More recently, slave free produce movements in the UK and US used very similar thinking and strategies by embracing solidarity and attempting to persuade people to refuse to buy items made using slave labour.

Alternative traders took on a very difficult undertaking, creating markets for refugees, marginal producers and poor artisans. This was primarily outside of the commercial marketplace, using mail order, faith based organisations and charity shops as the main distribution vehicle. The limited volume compared to the enormous market needs and the challenges of market access that came with the rise of food products created the push for new ways to distribute products. Fair trade labelling came into being. The Soviet Union fell and alternatives to the mainstream market had little cultural support.

Labelling greatly expanded markets for producers by using the same sourcing criteria as alternative trade but using commercial distribution with no criteria. This created an uneasy family under one umbrella, fair trade. The family included some of the most reviled transnational corporations, producer organisations, alternative traders and a variety of NGOs (non-governmental organisations) trying to ethically or semi-ethically (or worse) grow the market.

Inevitably, the differentiation of alternative trade organisations (now called ATOs) from transnational corporations (TNCs) and corporate brands has largely gone. The much better financed and professionally staffed TNCs can do as much or as little fair trade as they want with little to help customers understand the difference between the ATOs/Fair Trade Organisations (FTOs) and the corporate fair trade brands.

We gave away or allowed our uniqueness to be given to the large brands. We succeeded beyond what most of us imagined. So well, that we worked ourselves out of a core position in fair trade and in the marketplace. We in the USA and Europe allowed the labelling organisations to play an increasingly central role in our “movement.” As such, we are trying to compete head to head with huge brands and, at the same time, transform the nature of business in societies.

How to deal with this fundamental challenge? We want to transform markets and compete with huge brands that generally put a toe or two or three in the fair trade water? Some may even become 100% or close fair trade but with a corporate approach to generating profits.

Can we do it? Do we need new language and campaigns to help customers understand the difference between transformational fair trade (i.e. Alternative trade) and corporate fair trade?

Paul Rice, chief executive of Fair Trade USA, understood a decade ago that in a mixed system, if fair trade worked, alternative traders would be increasingly irrelevant in market share, people’s minds and pounds and pence. So he single-mindedly used traditional business approaches—and the odd twist of colonial thinking that he knows better than farmers or workers what will be best for them—and set out to reform corporate capitalism. In the US, we allowed him to be the hub of our relatively weak movement. In the UK, the Fair Trade Foundation built a multi-stakeholder network with much greater collaboration and transparency. Yet, I think ultimately, the fate of ATOs/FTOs will be the same if we don’t get back to our roots of innovation and raising the bar. We will be overshadowed and less and less competitive with corporate brands through high volume and market manipulation. We can only thrive by inventing new rules, not trying to compete according to conventional market rules.

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