1. Imbalance in Developing Nations
World Issues

2. Why International Trade?
International trade exists for the following reasons:
There is an uneven distribution of natural resources in different countries. International trade exists to bridge the gap across geographical boundaries.
All countries possess diverse strengths and weaknesses in terms of land, labour, capital and technology. If countries can specialize, costs and operations become more efficient.
It provides consumers the opportunity to be exposed to those goods and services that are not available in their own country.
It reduces dependency on domestic market by expanding customers’ demand in other countries.
It enhances economic growth and contributes significantly to the country’s Gross Domestic Product.

3. Are we helping or hindering business in developing countries?
The world trading system isn’t fair for everyone…
Why?
Companies demand profit and consumers want inexpensive products.
Most profit stays with the multinational company and very little goes to the people who grow food and manufacture products.
Approximately 20% of the world’s population lives on less than $1 a day and more than 40% of the world’s workers have incomes under $2 a day (USD).

4. The Corporation https://youtu.be/Y888wVY5hzw

5. Some of the main problems with our current global economic system
(for developing countries) are:
Child labour
Unsafe working conditions
Environmental Degradation
Low wages for workers
Limited land and opportunity for independent farmers
Very little social/economic development within the communities

6. Free Trade
Currently, most trade is geared toward FREE TRADE, which boosts a country’s economic development (GNP)
Much of the profit goes to TRANSNATIONALS
Several “middle men” between farmer and consumer – reduces profits and control
Difficult for small farmers to compete
Still high rates of poverty

7. What is the alternative?
Fair Trade

8. To transfer the ownership of goods and services
What is Fair Trade?
To transfer the ownership of goods and services
from one person or group to another in a manner that is free of injustice or unfairness.
DIRECT TRADE
Fair Pricing
Democratic & Transparent Business Practices
Long term trade relationships
Community Development
Environmental Protection
Access to Credit for producers

9. Goals of the Fair Trade Movement
FOR the producers:
economic self-sufficiency
Make producers and workers stakeholders
greater equity in international trade.
FOR the consumers (us!):
Ethical consumption:
Purchasing goods and services made ethically—
with minimal harm to the environment, humans
or animals.

10. ANY LUCK?
By 2011, sales of fair trade products have reached US 5 billion dollars
In Canada, $200 million, the fifth largest fair trade market in the world and the fastest-growing.

11. SUCCESSES the Global South (Developing) the Global North (Developed)
827 fair trade certified farmer and worker organizations
In 60 countries
1.2 million farmers and workers benefit
the Global North (Developed)
27,000 fair trade products worldwide
Over 70 countries where fair trade products are sold
2,849 total number of fair trade licenses

14. Challenges? Products are a little more expensive Product exposure
Big Business now wants in on the “Fair Trade” market
Some producers want tighter control
Many certification stamps…which ones are reliable?

15. This is one reliable stamp:

16. To be certified in Canada:
Fairtrade Canada – monitors and certifies products coming in to Canada
Companies that are interested in doing the initial processing or packaging become licensed through Fairtrade Canada, and report their sales and purchases on a quarterly basis and have annual audits.
Companies who sell finished fair trade products are not required to report or become licensed, but must use the Fair Trade label responsibly.

17. WHAT WE SHOULD DO (at the very least)
A RESPONSIBLE consumer asks:
Do I need it?
Who made it?
How far did it travel to get to me?
Is the packaging recyclable?
How will I ultimately dispose of it?
Can it be composted or reused?
Is there a more ethical choice?
Is there a more environmentally-friendly alternative?

18. QUESTIONS FOR YOU? Describe Fair Trade.
What guides your decisions when you buy something?
Look at your clothes and think of today’s food that you’ve consumed; imagine the producers and tell their story.
Would you buy fair trade products? Why? Why not? What would you buy?
What should the Fair Trade movement do to grow?
Do you think a plantation owner with his/her business model and power in the market can embody fair trade standards?

19. How did Fair Trade Start?
1940s - an American volunteer in Puerto
Rico was impressed with the needlework of the local women and shocked by their poverty.
She brought back samples of the work and began selling them from her car to women in her community.
This work grew into a network of stores that eventually became the more than 130 Ten Thousand Villages stores in North America.

20. OXFAM
In the 1950s in Europe, OXFAM, an international development organization, began promoting handicrafts made by Chinese refugees in Hong Kong.
Third World Shops s-- Europe.
Also: projects, education, and awareness campaigns worldwide.

21. Growth of the movement
Grew to focus on food products and major exports such as coffee , sugar, and bananas.
In 1998, a fair trade certification and labelling initiative was introduced by Max Havelaar in the Netherlands to increase visibility and set standards for fair trade.

23. How are the businesses organized?
Plantations - artificially-established forest, farm, or estate, where crops are grown for sale, often in distant markets rather than for local on-site consumption.
Unions – organized workers with a union leader and legal representation – negotiates for workers
Cooperatives – In a farmers' co-op, farmers pool their resources in certain areas of activity. This gives them a stronger voice & more resources, technology, experience, and access to the market
Small Scale producers

24. The Nestle example 2009: sales of $103.68 billion/ 278,000 employees
Recently, “Greening-up” their image, as they are one of the top boycotted companies in the world.
For: human rights abuse…ex. Buying cocoa produced by child slaves in Ivory Coast
Union busting
animal-testing
Pushing Baby Formula in Dev. Nations (anti-WFO)

25. Setting Fair Trade Prices
The fair trade price
the minimum price paid to producer associations
Determined by costs of production and costs of living
NOT subject to Supply and Demand of World Market
Almost always higher than regular coffee
many buyers pay more than the minimum based on differences in quality and their commitment

27. What are Premiums?
The Fair Trade Premium - a portion of the price used by producer organizations to fund social projects such as schools, training, health care, transportation, micro-credit, housing improvements, education, clean drinking water …
Producers decide together how to best use this premium
The fair trade premium seems small, but it adds up to a lot!
In 2009:
Africa- US$17.6 million
Asia- US$7.8 million
Latin America and the Caribbean- US$47.1 million