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Free trade or Fair trade?

This week one of our ALOVE peer writers, Carl Baker, an economics under graduate, takes an in-depth look at how our everyday choices may be enslaving others and poses the question: Free trade or Fair trade?

There are few people who would argue slavery is a good thing. It's an outdated institution and the fact that it doesn't exist here any more is a monument to how we've progressed as the human culture, right? Well, maybe it’s not quite so black and white.

Could it be possible that through our everyday actions, we are contributing to a different type of slavery that bind thousands of people all over the world in sub-human conditions or situations?

In his book, The No-Nonsense Guide to Fair Trade, David Ransom tells of his visit to a banana farm in Guatemala, where he sees banana plantations being fumigated with dangerous chemicals, whilst people are working on them.

And it's not just an issue of foodstuffs -Many clothes are produced unethically in what are dubbed ‘sweatshops' - they comprise awful conditions, long hours and ultra-low pay. A typical Nike worker in El Salvador earns 60 cents an hour, which is around half of the amount they would need to be living outside of starvation.

So when we buy food or goods, are we supporting and advocating everything that has happened for them to get ‘from the ground’ to us? Of course, it’s a complex issue and process. We’re often oblivious to the origin of our purchases and the injustice that often occurs in their creation. Nevertheless, every time the average consumer buys items that were produced in such contexts, we’re inadvertently supporting and perpetuating the situation.

As Christians, we have a responsibility to speak out against this kind of injustice in the world, so how do we approach such an issue?

Some people argue that the world market will only function properly when allowed to work freely and support Free Trade. This is the theory that International trade between countries should be allowed to take place without any barriers such as quotas (limiting the amount that can be imported/exported), tariffs (a fee charged on top of the price), and embargos (a total ban on the trade of a particular item).

However some challenge the merits of Free Trade, saying it’s only in the interests of those in power - large countries and large corporations. For example, corporations will scream 'free trade' when trying to import cocoa beans from Ghana, but if Ghana was to make its own chocolate and try to export it to Europe, it would meet a hefty tariff and certainly not free trade.

Another approach that people will argue for are the merits of Fair Trade over Free Trade. In my opinion, Fair Trade is preferable. it’s not based on short-term commitments or driving the price down as low as possible. It’s based on a guaranteed minimum price for producers, which is at a wage level realistic to live on. This means that even when the markets fail, or there is a bad crop, leading to poor prices, the producers still receive enough to live on.

In The No-Nonsense Guide To Fair Trade, David Ransom describes his visits to a number of farms and plantations where fair-trade is practised. There he sees a marked difference in the lives of the workers compared to those who work for the mainstream corporations. Their quality of life and job satisfaction (which were non-existent in the other plantations) were much higher and it was clear to see that fair trade has made a difference to their lives.

However, Fair Trade is a system not without its weaknesses. Economists argue fair trade tampers with free trade, which they see as the optimum for trade. In addition, when prices are high in the market, rogue middlemen will try and tempt those working in a fair-trade system into short-term unstable agreements.

Ultimately, the whole issue is very complex, and there aren’t quick fix solutions to some of these problems. However, one thing is clear – many trading practices in our world see millions of people oppressed and working in sub-standard conditions – and that is not acceptable. We need to do what we can to support the growers over the corporations.

Ignorance is bliss, they say, but it’s just no longer good enough.

Biblical reflections

From a biblical perspective, it is clear that God regards justice in society as a very important thing. Take these two passages:

Isaiah 58:6 “I'll tell you what it really means to worship the Lord. Remove the chains of prisoners who are chained unjustly. Free those who are abused!”

Isaiah 61:1-8 “The LORD has chosen and sent me to tell the oppressed the good news, to heal the broken-hearted, and to announce freedom for prisoners and captives...I, the Lord, love justice! But I hate robbery and injustice.

Weblinks:
www.fairtrade.org.uk
www.tearfund.org
www.ethicalconsumer.org
www.thegoodshoppingguide.co.uk
Reading:

The No-Nonsense Guide To Fair Trade, David Ransom
Available from Amazon - Click here

Globalization and its Discontents, Joseph E. Stiglitz
Available from Amazon - Click here
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