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Fairtrade Fortnight - count me out

February 18, 2009 13:42

Forgive me if I don't join in the forthcoming Fairtrade Fortnight campaign, which this year has spawned a specifically Jewish element, such as the 'Jewish Guide to Fairtrade'.

I don't have any dispute with notion of consumers being asked to support one product over another; that's the very basis of free trade and free markets: consumers are free to make a choice. So even if Fairtrade products might cost a bit more than normally traded goods, those of us who want to spend our money that way have that option.

My problem is with the notion that so-called Fairtrade is the answer to anything, or - even more dubious - that it is is somehow more moral than other forms of trade. It isn't.

Indeed, in some ways it is  less moral, because it masks the real problems, gives the entirely misleading impression that those who buy Fairtrade products are somehow doing something more just than those who don't, and drags attention away from where the real problems lie.

The underlying message of Fairtrade Fortnight — that trade is pivotal to making poverty history — is spot on. But if we are serious about such an aim, it’s a Free Trade Fortnight that we really need.

Fairtrade-approved goods have had a specific floor price level negotiated, and meet certain criteria about the reinvestment of profits. As voluntary arrangements they are to be lauded. Like many others, I sometimes buy them.

The worries begin when Fairtrade is posited not as one option within a free-trade world, but as a morally superior alternative to it. The Conservative Party's statement of values, for example, is worryingly ambiguous — “We will fight for free and fair trade” — as if the two were different. They are not. Free trade is, by definition, fair.

The real problem is not that farmers are not paid enough. An International Monetary Fund report in 2005 found that greater aid (which is, in many ways, what the false fair trade price represents) actually reduced countries’ export performance.

It is tariff barriers — both those supposedly “protecting” the developing world but which actually keep resources in unproductive, low-return activities (such as some farming), and those imposed by potential importers of developing world products - which are the real problem.

Top of that tarrif league, shamefully, remains the EU.

A far more worthwhile campaign would be Free Trade Fortnight, to campaign for the end of the Common Agricultural Policy and the EU’s agricultural tariffs, which average 20 per cent and peak at 250 per cent.

As the newly found prosperity of Malaysia, Singapore, Thailand, South Korea and India shows, trade is the engine of growth, enabling the investment that brought about comparative advantages in the manufacture of an ever-widening range of products.

The 'Jewish Guide to Fairtrade' is in some ways a shocking document, because within it there is not one reference to the idea of free trade, just a series of pious slogans and urgings to buy Fairtrade, as if it is the most moral of all trades.

The fairest trade of all is free trade.

February 18, 2009 13:42

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