Fighting poverty and injustice through Fair Trade
How the EU can support the Fair Trade movement to create sustainable livelihoods and to promote responsible purchasing December 2006
Fair Trade is a trading partnership based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalised producers and workers – especially in the South. Fair Trade organisations (backed by consumers) are actively engaged in supporting producers, awareness raising and in campaigning for changes in the rules and practices of conventional international trade.
From modest beginnings, Fair Trade has developed into a worldwide movement, guaranteeing decent living and working conditions for over one million small scale and marginalised producers and poor workers in developing countries. In Europe, Fair Trade Organisations have pioneered responsible business practices and encouraged consumers to take the social, economic and environmental conditions of their purchasing into account. The impressive growth and success of Fair Trade proves that a truly fair and responsible trade and business model is possible: Over the last six years, Fair Trade sales have grown by 20% to 30% per year throughout Europe and are expected to reach 2 billion € in 2006. This demand has been a significant lever for change in business practices. But despite the remarkable increase, the overall market share of Fair Trade is still very small. There is a huge potential for Fair Trade to grow, both in the food and nonfood sectors.
Producers, consumers, businesses and civil society are key to the success of Fair Trade, but European Institutions also have a critical role to play. A coherent Fair Trade policy and systematic support to Fair Trade Organisations in Europe could lead to a significant growth in awareness and in the demand for Fair Trade products in the EU and thus create sustainable livelihoods for millions of poor and marginalised producers and workers in developing countries.
In a recent resolution on Fair Trade and development, the European Parliament suggests concrete measures to step up the EU’s political and financial support to Fair Trade and Fair Trade Organisations (FTO’s). The international Fair Trade movement welcomes the resolution and supports many of its demands.
Fair Trade demands to European decision makers
We urge the European Commission to respond to the European
Parliament and previous commitments and to issue a recommendation on
Fair Trade, rather than a European legislative act which would carry the
risk of over-regulation. We support the demand to support Fair Trade as
mentioned in art. 23 g) of the Cotonou Agreement and to provide “Aid for
Fair Trade”.
Furthermore, we urge the European Commission and the EU Member States to:
1. Recognize the definition and principles of Fair
Trade as developed by the international Fair Trade movement
The success of Fair Trade and Fair Trade Organisations (FTO’s) is
being achieved thanks to a comprehensive approach, combining fair
trading conditions with producer support, awareness raising and advocacy
for greater trade justice. Essential elements of the concept are a fair
producer price, covering the costs of sustainable production and a
premium for investment, prefinancing on request, long-term
relationships, capacity building and empowerment of the producers as
well as compliance with labour and environmental regulations and
awarenessraising activities about the prevailing injustice of
international trade rules.
Inspired by the success of Fair Trade and in response to the growing consumer interest in ethical purchasing, ever more companies are developing “sustainable” or “ethical” trading initiatives or product lines. This is a welcome development as long as these initiatives contribute to the improvement of the producers’ living and working conditions and if they follow clear and transparent criteria.
However, many “sustainability” or “ethical” claims lack the backing of credible and verifiable standards and consumers find it ever more difficult to obtain appropriate information in the crowded ethical market place. In some cases, even the term “fair trade” is being used without complying with the related criteria. If there is no clear distinction between Fair Trade and other schemes, non-compliance with ethical claims in one initiative may result in a general loss of consumer confidence and harm the credibility of Fair Trade itself.
We therefore ask the European Commission and the EU
Member States
- to recognize the definition and principles of Fair Trade and Fair
Trade Organisations as developed by the international Fair Trade
movement;
- to take appropriate measures to ensure that consumers have access to
all the information they need in order to make informed choices and to
protect consumers from misleading ethical and “fair” claims.
2. Increase public awareness and information about
Fair Trade
Hundreds of millions of poor and marginalised producers and workers
in developing countries are still living in desperate poverty. Many Fair
Trade producer organisations can only sell minor parts of their
production under fair terms because the demand for Fair Trade products
is still too small.
The Fair Trade experience shows that European consumers are purchasing responsibly if they have access to appropriate information and if the products are easily available. However, the level of knowledge about Fair Trade is still very mixed within the European Union.
We therefore ask the European Commission and the EU
Member States
- to support awareness raising activities, particularly in those
countries where Fair Trade is relatively new;
- to spread information about best practices of public support for Fair
Trade among EU Member States;
- to support Fair Trade related research, for instance strengthening
systems, impact, supply chain analyses, transparency and traceability;
- to support comparative research of Fair Trade against mainstream
market operations to examine how the lessons of Fair Trade can be
applied more widely.
3. Increase the number of producers in developing
countries who benefit from fair trading conditions
Market access and capacity building are key concerns for producers
in developing countries. For many poor producers, pre-financing and
capacity building as provided by Fair Trade Organisations are essential
to sustain their living. The Fair Trade movement is committed to
reaching out to more producers and making access easier for them whilst
preserving stringent criteria to maintain consumer confidence.
We therefore ask the European Commission, the EU
Member States and development agencies to support small producers
through
- technical assistance (for instance to meet the European SPS standards,
rules of origin and the growing number of corporate standards, encourage
moves into processing, etc.);
- capacity building and empowerment programmes, particularly for women;
- helping Fair Trade operators in providing pre-financing for producers;
- developing new Fair Trade products;
- supporting local and South-South Fair Trade, e.g. through assistance
in the distribution of Fair Trade products on local and regional
markets, participation in fairs and supporting the organisation of
producers, e.g. into cooperatives or networks, and support to increase
awareness about Fair Trade among consumers in the South;
- including southern Fair Trade Organisations in the consultation
process of programming aid towards ACP and other developing countries.
4. Promote Fair Procurement in the European Union
Public authorities are not only major consumers in Europe, spending
about 16% of the EU’s Gross Domestic Product, they also set an example
for the general public and influence the market place. If Fair Trade
criteria were integrated into European public procurement, the social
and environmental benefits would be considerable.
The European Commission should therefore
- develop and implement sustainable purchasing policies within the
European Institutions, notably through the integration of Fair Trade
criteria;
- encourage European public authorities at national, regional and local
levels to integrate Fair Trade criteria into their purchasing policies,
e.g. by producing guidelines on Fair Procurement and by suggesting ways
to increase visibility of fair purchasing practices;
- develop targets for responsible purchasing within the EU Member States
with an increasing sliding scale up to 2015.
5. Ensure co-ordination and coherence of EU
policies on Fair Trade
In order to achieve greater coherence between different Community
policies and to develop a European-wide strategy on Fair Trade we ask
the European Commission
- to establish a central contact point for Fair Trade within the
European Commission;
- to ensure regular co-ordination on Fair Trade among different services
(e.g. an EC Working Group) involving DG Development, Trade, External
Relations, Agriculture, Education, Consumers’ Protection, Employment and
Social Affairs, EuropeAid, Competition and Internal Market, in
consultation with the Fair Trade movement.
Towards fairer trade for all
The Fair Trade movement pursues two inseparable objectives: on the
one hand, to provide
opportunities for development for small-scale producers and workers in
developing countries, and, on the other, to encourage the international
trading system and private businesses to operate in a way which is
fairer and more conducive to sustainable development. True progress
requires not only the promotion of Fair Trade but also efforts to
overcome structural inequalities in European trade policies. These
policies must be more balanced and put sustainable development and
poverty eradication at their heart. They must improve market access for
small producers in the South whilst guaranteeing them with remunerative
prices. EU policies should further encourage all businesses to improve
their trading and purchasing practices for trade to become an engine for
sustainable development. We therefore urge the EU to increase efforts in
the following areas:
6. Moving towards a sustainable European trade
policy
Trade should not be an end in itself but a means towards achieving
sustainable development and poverty eradication. However, current trade
policy making does not put development at its heart and there is a lack
of coherence between European trade and development policies. World
trade negotiations are in crisis and there is no strategy in place to
make trade negotiations work for development and poverty reduction.
Whilst it is widely recognized that small producers are an important
engine for job creation and development in the South, the interests and
needs of these groups are rarely taken into account.
We therefore ask the European Commission
- to support mechanisms for the participation of producers in price
determination, as provided for in GATT Articles XXXVI - XXXVIII and in
paragraph 63 of the Compendium on co-operation strategies to the Cotonou
Agreement;
- to develop a coherent policy for the promotion and protection of small
and marginalized producers in bilateral and regional trade negotiations,
such as the Economic Partnership Agreements (EPAs) with the ACP
countries;
- to develop a coherent policy for the promotion of food sovereignty and
for the protection of local production and consumption.
- to assess the possibility for including sustainability criteria into
EU trade policy-making in order to encourage imported goods that comply
with sound social and environmental standards;
- to incorporate the lessons of the Fair Trade movement in trade policy
making given our long standing experience of how such policies translate
into practice.
7. Strengthening corporate accountability
The Fair Trade movement welcomes the increase in corporate social
responsibility initiatives, responding to a growing interest of
consumers in responsible business practices. We are working actively
with companies to improve their business and purchasing practices,
particularly regarding their impact on southern suppliers and workers.
We therefore ask the European Commission and EU
governments
- to actively raise awareness amongst the business community to improve
their performance on the UN’s Universal Declaration of Human Rights, the
ILO Core Labour Standards and Tripartite Declaration of Principles
concerning Multinational Enterprises and Social Policy, the UN Norms for
Business and the OECD Guidelines for Multinational Enterprise;
- to develop legally binding measures so that businesses are held to
account for their negative social, economic and environmental impacts,
both within the EU and in third countries;
- To promote responsible purchasing practices of EU companies throughout
their supply chains.
IFAT
www.ifat.org
EFTA
www.eftafairtrade.org
NEWS!
www.worldshops.org
FLO
www.fairtrade.net
Fair Trade Advocacy Office
Rue du Commerce 124, B-1000 Brussels
Tel: +32.2.217 36 17 / Fax: +32.2.217 37 98
Mail: info@fairtrade-advocacy.org
