Academic journal article Journal of Australian Political Economy

To Be Free and Fair? Debating Fair Trade's Shifting Response to Global Inequality

Academic journal article Journal of Australian Political Economy

To Be Free and Fair? Debating Fair Trade's Shifting Response to Global Inequality

Article excerpt

Fair trade, a concept that was pioneered by alternative trade activists and organisations opposed to the workings of the conventional trading system, has moved from the margins to active exchange in, and indeed reliance on, the mainstream market. With its origins in the early informal activities of missionaries and Non-Governmental Organisations (NGOs), Fair Trade in its infancy quickly formalised as an applied opposition to the dominance of free market principles in global markets. This was achieved through the creation of Alternative Trade Organisations (ATOs), today called Fair Trade Organisations (FTOs), as businesses actively trading with marginalised producers on the basis of a typically non-profit and socially oriented bottom line. In the 1990s, a new 'Fairtrade' labelling model emerged. (1) This model sought to propel fair trade activity from the sidelines into the mainstream by inviting conventional profit-oriented businesses to participate. It differentiates from the more deeply transformative and process-oriented features of ATO trade through its emphasis on product differentiation as a mechanism for harnessing the conventional market to mainstream fair trade activity. While it preferences ethical business structures and values at the sites of production, it does so without making concomitant requirements of business structures in consumer markets, only of the terms under which they buy their fair trade product lines.

Unsurprisingly, accusations of 'fairwashing' abound (see Jaffee and Howard (2015) for a discussion of this concept). Yet, this adaptation of alternative trade principles into mainstream distribution channels, leading to the phenomenal growth of fair trade markets, has led to Fairtrade labelling's remarkable success in mainstreaming the concept of fair trade itself and thereby reaching a wider production and consumption base. Despite, or perhaps because of this success, fair trade took a third turn in its evolution when in late 2011 Fair Trade USA (here after FTUSA), representing a leading Fairtrade Labelling market, split from the international Fairtrade Labelling association. Building on labelling's mainstreaming success, FTUSA aims to push the mainstreaming model further under the motto 'Fair Trade For All' (FTUSA 2012). But just as Fairtrade Labelling inched closer to the conventional market model, piggybacking on the existing market presence of some of its biggest corporate participants like Starbucks, Walmart and McDonald's to name a few, FTUSA arguably moves even closer still. It does this by reconceiving the fair trade production base through extending its certification system to corporatised and large-scale labour mobilisation, moving away from Fairtrade International's ongoing preference to work with smallholder (typically cooperative) production where possible. It conceives of fair trade as a model that 'helps "free trade" work for the poor' (FTUSA 2016), and in this vein, arguably seeks to operationalise 'pro-poor growth'. Not surprisingly, this duality in the fair trade sector today, whereby fair trade rejects a conventional business model on the one hand (through promotion of an ethical business model), yet also depends on conventional businesses through the Fairtrade labelling and FTUSA models, presents the movement with clear challenges. Despite its success, the slippery slope of mainstreaming fair trade appears to have compromised traditional opposition to free market principles, and in so doing creates increasing ambiguity about the meaning offair trade.

This article poses the question: To what extent do 'fair trade' markets, including the recent evolution of a FTUSA model, challenge conventional market responses to global inequality? While the market opposing credentials of fair trade have been conceptualised before (for example, see Fridell 2006, 2007; Jaffee 2007; and Raynolds and Long 2007), there is a dearth of literature that carefully examines this question in the context of the new FTUSA model (an exception, for example, is Hudson, Hudson and Fridell, 2013, which includes a discussion but does not feature a separate conceptualisation of the FTUSA model). …

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