Free Trade and Fair Trade – The Bigger Picture (Why it’s not just about which bananas you buy) - Heidi Errington

It’s kind of easy to think of Fair Trade as being about paying more for all that stuff we like – tea, chocolate, sugar, and bananas. Though putting our money where our mouth is can be a useful tactic (if we can afford it), there are other things to bear in mind.

• Free trade as it stands is inherently unfair and demands reform. We can influence this by choosing fair trade goods as consumers, but we need to go beyond this - in terms of campaigning and lobbying, talking and protesting about the injustices of this skewed system.
• Economic growth and the politics of liberalisation continue to benefit rich countries, large companies and the already wealthy.
• The WTO effectively works in favour of a few rich countries in overturning the laws of elected governments in less powerful countries. What it oversees is ‘trickle up’ economics.
• Whilst liberalisation forges inroads into developing economies, trade barriers are erected to block exports from developing countries. It’s a two-tier system. Subsidies (notably for agriculture in the US and EU) and large scale dumping of goods on developing world economies are also wildly unhelpful. Unfair trade in services and ‘intellectual property’ (e.g. patents) are also issues that badly need addressing.
• The link between unfair global trade and the increasing gulf between rich and poor is well documented, and is acknowledged by the UN.
• Big business has more access to high-level decision-making, and has become so powerful that they now hold more sway over governments than citizens do.
• In the global business arena there is a race to the bottom, with standards and costs constantly pushed down to please shareholders.
• Be an active citizen, voter and consumer:
  • Hassle your MP, the secretary of state for Trade, the Prime Minister.
  • Join an organisation like the World Development Movement or War Against Want.
  • Ask shops to stock fair trade products.
  • Support you local economy where possible, small shops selling local produce.
  • Reduce what you buy – we consume far more than we need to.
  • Remember - your lifestyle impacts on other people - uncomfortable but true.

GARMENT WORKERS AND FREE TRADE

The fourth World Social Forum, held this year in Mumbai, highlighted many of the issues affecting trade in India and other developing countries. One hundred thousand people from 132 countries essentially held an alternative meeting to the World Economic Forum.

Clothes manufacturing was one focus point. Women make up a disproportionate number of workers in this field. They are paid poverty wages and work long hours - often under forced overtime (if you don’t do it, there will be no work for you tomorrow). Factories are often dangerous places to work. Tens of millions of workers are employed in these conditions, in over two hundred countries(including India ) . Hundreds of thousands of Indian children work in factories, many of these are textile sweatshops. This is the sort of trade that keeps people trapped in poverty.

In this industry, big name retailers subcontract work to sewing contractors and factories. When challenged on their accountability for conditions in sweatshops, the corporations shy away from taking responsibility. Where codes of conduct are in place they are frequently undermined by the pressure put on factories by big companies, placing last minute orders and demanding ever-cheaper products.

There are no binding contracts for the supplier; specific amounts of clothes are traded at fixed prices to respond to the whims of the market. This ‘flexibility’ in the supply chain means that the people at the bottom tend to be the cheapest and most expendable workforce in the world. Such buying practices also mean factories cannot maintain standards in working life as well as fulfilling orders and keeping lucrative contracts.

Textiles are one of the most lucrative industries in the world . Currently, the way that companies such as Tesco, Wal-Mart and Puma do business is leading to the exploitation of women.

Oxfam, the TUC and Labour behind the Label are campaigning for greater respect for workers in the textiles industry. ‘Play Fair at the Olympics’ is their current forum in the push for positive change.

Information for this article was gained from ‘The impact of free trade on garment workers: The sweatshop phenomenon’ By Laxmi Murthy (http://www.infochangeindia.org )

Also useful to look at is: www.india.indymedia.org

INDIA AND GATS

India has demanded that the WTO meets its demands for an assessment of GATS (General Agreement on Trade and Services). GATS is an international trade agreement currently being negotiated through the WTO. It includes essential basic services like water, health, education and electricity. NGOs are worried that this could have all kinds of negative impacts on human rights.

India has already been stung by the involvement of multinationals in provision of services. According to a World Development Movement report, ENRON has a disastrous involvement in the Dabhol power plant near Mumbai. At the time, it was India ’s biggest ever foreign investor. The venture collapsed after the Maharashtra State Government withheld payment. The electricity generated was at a price way and above what the Government had expected to pay.

In South Africa , privatisation of water has meant that rich people can afford to swim in luxury pools, whilst the poor are disconnected when they can’t afford the new price hikes. Meanwhile, the big water companies make a tidy profit. French and British water companies, already involved in developing countries, are now pressing for further liberalisation.

India has been vocal in its opposition to controversial new issues in international trade, it wants more flexibility for developing countries to nurture their own industries and restrict imports. Along with other countries, its protests led to the collapse of talks at the Cancun Conference in September 2003.

GATS in India – one of the southern groups the World Development Movement has worked closely with is Equations, who are based in India . Their website is:

www.equitabletourism.org

COCA-COLA IN INDIA

Plachimada in Kerala, Wada in Maharashtra and Mehdiganj in Uttar Pradesh.

These three places have all found the same things happening. When the Coca-Cola bottling factory moves in, they hoover up all the groundwater. Locals have experienced severe water shortages, with village wells running dry. This situation often has the greatest impact on the lives of rural women, who are torn between needing to work in the fields to earn a living, and walking for two kilometres to find clean water for their families.

In Kerala, Coca Cola gave ‘fertiliser’ to locals to spread on their crops. This was waste products from the manufacture of Coke, and was later tested and found to contain toxic levels of heavy metals such as lead. There has been a 24-hour vigil outside the plant in Kerala since April 2002.

Information taken from the ‘Schnews’ Website – 23 January Issue

THE BASMATI BATTLE

Vananda Shiva is fighting against a phenomena she calls ‘biopiracy’. What she sees at stake is both indigenous knowledge and biodiversity.

A partial victory over the attempts by RiceTec to patent Basmati was won when, in 2001, the U.S. Patent and Trademark Office disallowed much of the application for the Basmati patent. This followed a storm of protests from around the world. ‘’Life forms and traditional knowledge cannot be treated as inventions. They need to be excluded from patentability, in India and every other country’’

‘ ’The battle over biodiversity, biopiracy and IPRs (intellectual property rights) is also at the heart of the demand of Third World countries for the reform of TRIPs (trade-related aspects of intellectual property rights, including patenting), rather than its implementation. Southern countries want to remove patentability of living resources from TRIPs, the recognition of traditional knowledge and biopiracy made illegal.

“Biopiracy is not restricted to Basmati; karela, jamun, tamarind, haldi, neem, ginger, anar, pepper, amla have all been patented’’

The WTO agreement on TRIPS intervenes by imposing rules that protect patents and trademarks – mostly held by multinationals. This ‘’allows multinationals to own rights to the use of plants and natural derivatives, like the natural pesticide from the neem tree, which has been used for hundreds of years by farmers but has now been patented by a US corporation.’’ (World Development Movement)

“Patents of our crops are a new form of biocolonialism …Stopping biopiracy demands shaping the appropriate laws for seeds, biodiversity and patents, nationally and internationally for the defence of our biological and intellectual wealth.’’

Quotes from an article by Dr. Vandana Shiva (www.poptel.org.uk/panap/latest/basmati.htm)

OPENING UP TRADE AFFECTS MEN AND WOMEN DIFFERENTLY

“In Ghana , women who had produced food for local markets came under pressure to give up their land for cash crops. The man then got the income when these crops were exported. Imported rice put many women farmers in the Philippines out of business. They had to take jobs on pineapple or banana plantations where they were exposed to pesticides and other dangerous chemicals” (World Development Movement) If you want to find out more - Members of the International Gender and Trade Network are involved inraising awareness about the implications on women of the different global trade agreements – especially GATS.