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Add Time :2009-09-08      Hits:3827

Fair Trade Movement

By Zou Chongming


Fair Trade Movement: Struggling in the Crevice of Market and Anti Market

    When China is on the 30the ceremony of the Third Plenary Session of the Eleventh Central Committee (of the Chinese Communist Party), collecting the result of Reform and Open Policy and stepping forward to great international economic nation, western developed countries have fallen into the most serious economic crisis since 1978 even the Great Depression in1930s. U.S. credit crisis sources from its estate foaming and it spreads up to international financial system within 1 year and that force many big banks in America and Europe be one step ahead of the sheriff. They either declare bankruptcy liquidation or purchased by states. Involvement of state seems to be the only one way out for free market. The New Liberalism Globalization Movement in the past 30 years not only create an amazing financial and trade expand but also the dangers lurking on all sides and expansive fluctuate of international market; at the same time, the high speed economic development brings the great amount of treasure and the extremely inequality between rich and poor. However, the fact of imbalance of market and bubble economic break the dreams down.        

    Gold Partners Capital Holdings Group (GPCH) said, globalize economic expand always has a pendulum movement. Started from 1970s, the first globalization ended through two World Wars and the Great Depression marked by the breakdown of gold standard international economic order. And every nation went back to the past and close situation even use the wars to ease the fierce social contradictions. Till the end of World War II, they rebuilt the Bretton Woods System and the General Agreement on Tariffs and Trade leading by U.S to support the second globalization. But in 1970s, western economic development was going to finished and the finance and taxation manipulation policy was going to be expired; the nations used the free trade model to break down the barriers during the Great Depression time to release the great power of free trade again.  

    Every time when we talk about the unprecedented great power and destroy of the free market. I will remember Karl Polanyi ‘s The Great Transformation. It says, under the planned interfere of mercantilism policy, self-regulation market brings labor, land and currency that are not relate to the commodity in origin with the marketing system and makes them to be the fictitious commodities. Moreover, the relationship of society and market has been reversed. Originally, market embedded and served for different kinds of social relations but get away from society step by step to be an independent system. Price mechanism becomes the unique operation method and takes the society, culture and politics under its control continuously. Furthermore, the blind and binge expand of market makes terrible destroy to the environment and the style of living. Naturally, every kind of social self-belay movement started and tries to take an effect on the logical of commodities.   


Fair Trade vs Free Trade

    Fair Trade is one of the most powerful respond to free trade’s blind expand (Stiglitz, 2005). Especially, since the past ten years, every nation around the world has many different social organizations are forming the global social self-protection movement. They try to explore the possible solution of human society without free trade globalization, promote the benign and healthy development of market and protect workers and farmers’ essential living and respect. This is quite similar with Karl Polanyi ‘s standpoint that Fair Trade makes no bones of free trade but just oppose the binge self-adjust market that greedily engulfs all social fields and interpersonal relations. Fair Trade asks for embedding market back to social relationship and restoring the dominant position of pure economic trade to the rich market operation system. 

    Due to the multi-standard and complication of Fair Trade, it has very wide meaning even contradiction. From macro to micro, from academy to practice, from ambition to moderation, from north to south, from something exceptional to something ordinary, from the official theory of international trade organization to one trade in Fair Trade coffee shop…

According to NFTA/ Fairtrade Labelling Organizations International (FLO), International Fair Trade Association, now the World Fair Trade Organization (WFTO), Network of European Worldshops (NEWS!) and European Fair Trade Association (EFTA) FINE, 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, marginalized producers and workers – especially in the South. But to Stiglitz, Fair Trade is the middle way between the free trade and anti-globalization that mainly to solve abatement problems through interfere policy. To the reformist, Fair Trade is in and against market. To the people of anti-free trade, Fair Trade is the exceptional choice (Raynolds, 2000)But to most of the producers and traders of Fair Trade, it means a series of trade regulation and standard, which improve the cooperation relationship between consumers and producers. (Moore, 2004)

    Perhaps Fair Trade could not have a specific definition but the activities are in the same series. For example, Wilkinson (2007) indicates that there mainly are three different public organizations in Fair Trade Movement: 1. Exceptional organization based on the communities and a small group of people. 2. Marketing network leading by FLO and its international authentication system. 3.Promotional organization focusing on Fair Trade advocating and free trade resistance. Therefore, from the point of special relativity, Fair Trade just concludes those producing and marketing methods that fit for the regulation of international Fair Trade organizations. From the point of general relativity, in developing countries, many middle and small enterprises have mutual help and independent trade cooperation relation not only concentrate on the financial result. It meets with the principle of Fair Trade. More generally, all trades as long as they are good for promote the fair cooperation and sustainable development with partners can become the part of Fair Trade (exactly we may call it Ethical Trade).

    From the point of relative ambition, Fair Trade should resist and be independent from dominant market. From the point of moderation, Fair Trade should prefer to get emerged with dominant market and target at having influence with dominant market. From the point of excessive ambition, Fair Trade should completely alter the dominant market and makes this as the final mission. However, these different points of view might form the internal conflict of Fair Trade. Just as Jaffee(2007) says, Fair Trade roots with a basic bizarre that it works for changing the non-reasonable situation of trade and social fairness but during the process, it is making the unfair market. 


New Social Economic Movement

    We could understand more about Fair Trade through the history and analysis of European and American social movement development. As Gendronetal (2008) says, Fair Trade can be named new social economic movement because it differentiates from the past social movement that based on classes and economic and either from the new social movement that based on the status and culture. On one side, Fair Trade is different from the old social movement that it does not form relative centralized political strength but only the relative inattentive organization and requirements; normally, it just aims at the market not the government policy. On the other side, Fair Trade is different from new social movement because it focuses on the economic fairness and the problem of distribution; moreover, it has a close relation with the traditional cooperatives and worker union etc. (Wilkinson, 2007). Therefore, Fair Trade has an obviously attribution of multi-border, open-minded and mixture. It concludes either the new and past social movement issues or different mobilization strategy or the cooperation and competition among different organizations. When Yu Xiaomin (2006) was analyzing the characteristic of modern consumer’s movement, she indicated that Fair Trade simultaneously plays the role of traditional trade union and political part together; and it is good for the cooperation of NGO that based on the middle class and trade union that based on the working class to bring new energy to social movement in academic and practice way. However, the target is obviously mixed with massive divided strategies limits. 

Besides, Fair Trade is engaged between the southern and northern group of people, especially, the transregional cooperation between the consumers in north and producer in south, which means they have to seek for the potential and exceptional development ability beyond the international dominate free trade as well as the mutual assistance possibility among the participants who engaged in different sections of global supply chain. Meanwhile, as obviously as it is, Fair Trade Movement always being dominated by the northern NGO, specially, they control the direction and operation through the progress of mainstreaming and standardizing; thus, it makes most of the participants in south affiliate with the north. Under the law “customers are always right.” The producers of south have to produce the “Fair Trade Products” that are required by the north to satisfy the demand of northern consumers even form a serial of complicated management and audit process. At last, this leads to the divergence and formalism of Fair Trade and it is very difficult to let the common producers and workers gain profits from it. According to this, the NGO in the south also start to get connected and negotiate with the north to win more advantages that are suitable for the need of local development. At the mean time, they work hard for enlarging the non-northern nation export direction marketing system besides the domestic market and south-south business. However, the scale and the economic returns are still awaiting situation.         



The Dispute of Fair Trade Institutionalization

    All the issues we talk about could be organized by a core problem: the development trend of Fair Trade institutionalization. In 1997, 17 Fair Trade organizations, all are from the north, found the FLO and unified the global Fair Trade authentication regulation regarding as a great contribution of mainstreaming and standardizing of Fair Trade. Different organization also begun to specify the division of labor step by step facing to more specialized development pursuing more efficient operation and economic returns as well as keeping up with the management structure of dominate market. (Gendronetal , 2008).  Comparably, another international organization of Fair Trade, IFAT, just covers more middle and small enterprises including the southern ones. And it insists the characteristic of communities and exceptional trade model. However, in 2004, it could not hold to resist the great trend of institutionalization then build its own authentication system. 

    The advantage of institutionalization, mainstreaming and standardizing is quite easy to discover. It could expand the market share and promote the products to the consumers through cooperate with dominate enterprises. This also can bring new living source to the producers. If they just simply adopt the non-specialized and non-dominate methods, probably the public will not get the possibility to know and understand what is Fair Trade. However, we cannot underestimate the risk of institutionalization, mainstreaming and standardizing. Big enterprises possibly will monopoly the Fair Trade and make it to be the marketing package of sale even the tool of advertisement for public relationship; furthermore, this will swallow the middle and small enterprises’ exceptional potential development ability. Finally, the Fair Trade becomes the subordination of dominant market and losses its original critical and reform spirit. (Moore , 2004). Actually, the strength between Fair Trade and dominant trade is still quite extremely; the space of negotiation between them is very limit; entering the dominant market just like asks a tiger for its skin.       

    During the severing time of author in Fair Trade, institutionalization or non-institutionalization strategy is a question indeed to the organization and the participants. Nonetheless, both of them are not divided and we could not judge which one is more advantage than the other one. Although the market is colorful just like Karl Polanyi ‘s opinion, Faire Trade should blossom freely and maintain the attribution of multi-border, open-minded and mixture not simply sort them into enterprises or NGOs.  They should openly and fairly cooperate and compete with each other and develop together under the trial of market promoting the Fair Trade even the development and popularization of wide-range consumer movement. 



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