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The European View: Fair Trade?

The EU's real deficit

Ethical commerce is not easy to define, but as matter of fact, consumers’ penchant for ethical purchasing is tangibly growing. People are increasingly aware that the international trading system is not conducive to sustainable development and hence does not merit the label ethical. The EU falls short of providing meaningful support for ethical commerce, comments Frithjof Schmidt.

 

The EU falls short of providing meaningful support for ethical commerce. So far, there is not even a European policy on Fair Trade, the most advanced, experienced and comprehensive approach to ethical commerce, which sets the benchmarks for any other scheme. Try to speak to a Fair Trade administrator in the European Commission – despite continuous proposals made by myself and colleagues, no desk officer, let alone a unit for Fair Trade has been established.

Both the Commission and the European Parliament have repeatedly acknowledged Fair Trade`s contribution to sustainable development and poverty reduction but not much has actually been done. Fair Trade ensures producers a living wage – a common sense approach, one would think. Fair Traders also help their partners in the South to comply with European standards, to get better market access, to protect the environment, to receive affordable credits and capacity building. It is an embedded approach, taking into account particularities and intricate needs of diverse communities. In Europe, the Fair Trade movement has been instrumental in sensitising the public and building up consumer pressure on coffee and banana companies to stop using forced and child labour and to look into their own business practices.

And the EU policy on Corporate Social Responsibility (CSR), addressing unethical commercial practices of companies? Years have been spent discussing in multi-stakeholder fora, but the long awaited communication is still not out. The task is too important to be left to businesses alone; trade unions, NGOs, parliaments as well as progressive businesses that operate already in a responsible manner need to be involved more consistently.

* Alternative recalibration needed
The EU should seriously promote and support Fair Trade and CSR, but even more importantly, the EU must make every effort to turn the international trading system into a tool for sustainable development:

* The first step would be to tackle the commodity crisis, which causes unfair prices and worsens the conditions of production as well as the environment. Accordingly, commodity initiatives such as the recent Arusha declaration of the African Union, asking for tariff protection, supply side management and international coordination to be discussed within the WTO, need the unequivocal support of the EU.

* Secondly, the EU trade negotiating strategy with respect to the WTO and bilateral accords such as the Economic Partnership Agreements is in dire need of recalibration away from pressure to liberalise sensitive economic sectors prematurely, towards restoring sufficient policy space for developing countries - for them to be able to conceive clever development strategies, aligned to national or regional needs. After all, Europe itself would most likely not have been able to develop a social market economy under current WTO-plus-IMF/World Bank conditions.

Fair Trade is actually happening and crucial for global justice. The EU can provide practical support for Fair Trade initiatives in the north and their partners in the south. The ultimate goal however can only be Trade Justice. Here, the EU has a long way to go to translate lip services into a development-oriented trade policy.

Dr. Frithjof Schmidt is Member of the European Parliament and Co-ordinator of the Green/EFA group in the development committee and substitute member of the international trade committee. He is the rapporteur for Fair Trade.

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