February 20, 2019
April 22, 2018
July 22, 2014
“This is Gina - she runs a free trade company!”
“No, no, actually, I run a fair trade company.”
“Oh… what’s the difference? Aren’t they the same?”
Ohhh boy. Today we’re going to clean up one of the biggest misconceptions we butt up against frequently in our work with Global Groove Life.
The conversation above is one we have pretty often, and it’s a mistake that even the most well-meaning people make, without even realising they’re doing it. Every so often, someone will refer to what we do as free trade, rather than fair trade.
And I get it - it’s confusing! The phrases are really similar. Thing is though, they mean really different things. Really different things.
Free Trade is defined as:
“The unrestricted sale and purchase of goods and services between countries without the imposition of constraints such as tariffs, duties and quotas.”
Fair Trade is defined as:
“A movement whose goal is to help producers in developing countries to get a fair price for their products so as to reduce poverty, provide for the ethical treatment of workers and farmers, and promote environmentally sustainable practices.”
These are both economic systems focused on the purchase and sale of products between countries or communities. But one is focused on profits, and one is focused on people.
Free trade agreements are generally employed by the governments of wealthy nations when dealing with the governments of developing nations.
These agreements generally remove the barriers to countries doing business, such as high import taxes or price controls that might otherwise come into play.
Proponents of free trade believe that businesses should succeed or fail based on whether they can compete in the marketplace. They believe that each business should be capable of meeting the demands of its customer base, and stay ahead of its competitors, without needing any special government involvement to protect workers or regulate practices.
The principle at work here is that a voluntary exchange between the business, their customers and their workers will ultimately result in fairness for all involved.
Fair Trade is about doing business ethically. Its main concern is about the end producer: how they are treated and how their resources are managed, rather than whether the government of their country is being charged export taxes on their products.
Proponents of Fair Trade argue that trade between developed countries and developing countries is skewed in favour of the developed country. They believe trade should take place on more equitable terms, with mutual advantage resulting for both parties.
Fair Trade aims to pay producers (such as farmers, tailors and jewelers) a living wage; that is, a wage that enables them to live comfortably in their community, instead of living hand to mouth despite doing demanding and time-consuming work. This stands in direct contrast to the free trade model, where paying the producer less is an acceptable way of increasing a company’s total revenue.
According to Fairtrade.org, free trade introduces an exploitative mechanism which impoverishes those in the Third World:
"Particularly in the field of trade, our area of attention, the law of the strongest is frequently the only law. In Asia, Africa and Latin America, both male and female craftsmen and farmers know all about this. If they cannot free themselves from the grasp of the numerous middlemen and buyers, who from their position of power prescribe the lowest prices, they will remain slaves of circumstances their entire lives."
To combat this, most Fair Trade business trade with local producers at ‘supracompetitive’ prices - they pay more than the standard market price in order to alleviate the cycle of poverty and hopelessness producers would otherwise face.
This is an extensive topic, and really today we’ve just scratched the surface! But now you know the difference:
Free trade is about profits, fair trade is about people.
July 16, 2014
In today’s world, travel is more common than ever.
Young and old people alike set out from their homes without amazing frequency to go out into the world, to see how other people live, and to expand their own horizons.
It’s experiences like this that can revolutionise how people think about Fair Trade - visiting the places where our commodities are produced can be a startling wake-up call.
There are over 1.5 billion people around the world who don’t have proper access to basic living necessities - clean water, adequate food, a safe place to live. To put that in context, 15 million Americans travel overseas for leisure every year, and 17 million people from the UK. Just because they can.
The millions of people that visit the developing world are often prompted to start buying Fair Trade products when they return home, but it can overhaul how they travel as well. Instead of buying meals at recognisable chain restaurants, they might venture out to local eateries run by villagers. Instead of buying mass-produced trinkets, they might buy something from a small stand or store - and in doing so enable the seller’s family to eat comfortably that night.
The more we travel - and currently we’re moving around the UK and then heading to Nepal to meet some more artisans and get some new projects underway - the more it becomes apparent that travel plays a key part in waking people’s social conscience.
When we travel to developing countries - to places like Thailand, Vietnam, Cambodia, Laos, India, Nepal, and many parts of South America - we realise just how very, very privileged we are. How the fluke of birth blessed us.
But travel shows us much more than the hardship and poverty of parts of the developing world.
We experience the deep richness of other cultures, and see, learn and do things that completely revolutionise our view of the world.
The vast differences in perspective can be mind-boggling, but also some of the greatest triggers to personal growth. Travel also helps us to shed the baggage - both literal and figurative - that we carry around with us. It frees us from needing the safety blanket of ‘stuff’, and can reveal a heap of limiting beliefs we’ve picked up along the way.
It’s why when we travel, we always try to take the Fair Trade ethos with us. The basis of Fair travel is to have a respectful and equally beneficial exchange wherever you go.
This means being mindful and respectful of the cultural norms and expectations of the places you visit, while still bringing your interesting and educational cultural patterns to your exchanges with local people. It means that your travel experience grows you and the people you meet. It’s what Fair Trade is all about.