We must not oversimplify the failings of fair trade

By Peter Hardstaff, head of policy at the World Development Movement. Response to ‘Freee doesn’t mean unfair‘ (THE GUARDIAN, 13/03/07):

Julian Baggini’s article on fair trade (Free doesn’t mean unfair, March 5) is laced with oversimplifications and misrepresentations, where straw men have been haphazardly constructed so he can take a swipe at them. Free trade works fine in economic textbooks, but in the real world a wealth of evidence exists on its limitations and failures. UN research shows that those poor countries which have liberalised most have deindustrialised and suffered worsening poverty. Few, if any, in the fair-trade movement believe impoverished countries should throw open their markets, see their nascent industries collapse and then hope that rich consumers will pick up the pieces by choosing to pay more for all their exports. Perhaps this is why the Fairtrade Foundation, Traidcraft and over 70 other organisations across the UK, including the World Development Movement (WDM), came together to form the Trade Justice Movement – to fight for fundamental changes to the rules of international trade.

The Fairtrade Foundation is being attacked by “trenchant anti-capitalists who believe the foundation has sold out”. Mr Baggini later points at WDM as one of these organisations, but has perhaps chosen to ignore WDM’s evidence-based critique of the economic policies being foisted on many developing countries. While being critical of the free-market policies and institutions that have been pushed nationally and internationally, and of those who lobby for a blanket free-market approach, WDM has never advocated an end to private capital and state control of production. If anything, WDM has advocated a highly modified version of capitalism – where the state plays a greater role, intervening in the market to ensure it works in the public, not the corporate, interest. The term “anti-capitalist” trips off the tongue easily enough, but is so sweeping that it easily becomes meaningless.

Mr Baggini criticises the WDM for expressing concern that Nestlé’s use of a Fairtrade label is “likely to be a cynical marketing exercise”. WDM’s suggestion that Nestlé’s move into Fairtrade coffee might be cynical was based on the fact that the company has used its market power to oppose government policies that might bring income stability to coffee farmers. Contrary to Mr Baggini’s implication, WDM did not claim that giving a Fairtrade label to a Nestlé product would undermine the fair-trade movement.

“Unless we want to go the whole way with anti-capitalism, the former [free trade plus some products with Fairtrade labels] is the only honest route.” This is Mr Baggini’s closing sentence and, after roughly fashioning his straw men on either extreme of the debate and taking a few poorly aimed kicks at each of them, this is the intended final and telling blow to establish his view as the sensible middle ground. He says there is nothing between anti-capitalism and free trade. Yet this messy middle ground is exactly where most of the debate on international trade takes place. Look at the evidence, and what WDM actually says, then make your mind up.