Not Free Trade, but Fair Trade

- by Lee Hayeon

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- What a Crazy price!

A t-shirts worth 5000won, a bag worth 3900won… Who can make them with this crazy price? Who can make profit from it?

This is the first question for the fair trade.

- protectionism and liberalization

According to the economy text, free trade is the best for all of the world. It is justified by so called “comparative advantage”.

Free trade is, “a market model in which trade in goods and services between or within countries flow unhindered by government-imposed restrictions. Restrictions to trade include taxes and other legislation, such as tariff and non-tariff trade barriers. Reductions to these barriers is trade liberalization.”

(http://en.wikipedia.org/wiki/Free_trade)

But, actually there has never been “free trade”. Even now cotton field in USA is protected by the government. Both protectionism and liberalization do for the benefit of a powerful country. This process is so call “kick off the ladder” (Jang hajun)

How can the poor countries overcome poverty in this international trade system?

This is the second question for the fair trade.

1. What is Fair Trade?

A billion of peasants make their living less than 1 dollar everyday.

Under pressure from developed countries they sell raw materials, goods, and themselves for the mud, finally are debt-saddled.

In this system, unfair world trade system, Fair Trade movement guarantees the normal profits for the peasants through the direct trade between the consumers in developed countries and producers in underdeveloped countries.

2. Spread of Fair Trade

The first movement started in 1950s as American churches purchased handicrafts for the refugees from Europe. In late 1980s Oxfam started it for the peasants of underdeveloped countries. Now most consumers in the industrialized countries can meet many kinds of fair-trade goods, especially coffee, cocoa, chocolate, fruits include banana, and T-shirts.

In Korea there are some fair trade goods. – Peace Coffee(from East Timor) by Korea YMCA, Himalayan present by the Beautiful store, Mascovado sugar(from Philippine) by APnet, some clothing by Ecofem(여성환경연대), etc.

But still there is just low recognition about fair-trade in Korea.

3. Fair trade in Korea

(1)In case of the Beautiful store, they launched some handicrafts for fair trade when they opened their store in 2002. Now coffee from Nepal is the main item. 

When the consumer in Korea buys 200g of coffee that costs 10000won, a peasant in Nepal gets 900won. The Beautiful store has a plan to supply machine for coffee production in 2008 with the earnings in 2007.

The official in charge said, “From the point of interest, Nepal coffee is not economical. Nonetheless our Nepal coffee is cheaper than another organic coffee.” He seemed to have proud of the quality of their coffee. According to him, the consumer in Korea can get the good quality of organic coffee with cheap price through fair trade system.

He said, “To choose the fair trade goods is the obligation of global citizen. It’s not just donation because it is good for both consumer and producer.”

(2) Mascovado sugar(from Philippine) by APnet (Alternative Peoples' Network for Peace and Life)

Mascovado sugar by APnet started fair trade in a part of consumer's cooperation movement. APnet shows us the case that started from needs of consumer. A member of the cooperation wanted to buy safe sugar for their kids. Since white sugar sold in Korea was almost unsafe refined sugar, they started trading with Negros through existing route that Japanese cooperation had developed.

A pack of Mascovado sugar costs 2000 won. It is also cheaper than another organic imported sugar. It is just half price.

Actually the home of the mascovado sugar, Negros island was a traditional plantation area. In 1984 people faced great crisis because of typhoon and millions of people sufferedfrom starvation.After spread widely about Negros’s crisis, many kinds of NGO gave support them. One of them was Japan Committee for Negros Campaign, JCN

NGOs include JCN realized their support like aid was not help. So they developed a new general idea, “Trade-Not-Aid”. Finally they founded Alter Trade Cooperation(ATC). After this effort Negros people could be guaranteed stable income.  

APnet considers direct trade is more important in point of cooperation movement. They think that trade has to be “people to people trade”. They think in market there is not only producer and consumer but encounter and solidarity. So a member of cooperation visits Philippine periodically, and cooperation and village community progress many projects. For example irrigation facilities, medical center, etc.

4.  Is the Fair-trade the alternative to the Free trade?

A few months ago, one magazine[i] reported the case in Nepal. According to report working conditions in workplace for fair-trade were not big different from other workers in the other underdeveloped countries.

“The workplace of fair trade factories is not so different from another common workplace. Krisuna Ruxumi(24) makes eye pillows for 8 years in a sewing factory that has fair trade relationship for 23 years. She can get 125 rupee a day, 3000 rupee (45000 won) a month. But she doesn’t know how much the eye pillow is and who buy it. There is no ‘democratic worker’, no ‘subjective worker’[ii]as the important principle of fair trade.”

“the chief beneficiary of fair trade is business enterprises not Nepali workers. The fair trade enterprises like Mahaguti, Manushi introduce themselves “Non Profit Non Governmental Organization”. But these organizations have the firm order of rank. The workers are just employees.”

These reports show us an ideal of fair trade was absorbed by the principle of market. There is not the principle of democracy. All fair trade enterprise are not transparent. It could come out result a few of group monopolized.

Then, is fair trade just an ideal? Is fair-trade a suitable alternative?

But many people still say it can be a seed of hope.

Fair trade is not best just better. We can still pursue the better. And we can change the better with the best.