The Fair Trade Scandal

Ndongo Samba Sylla

Description

The Fair Trade Scandal takes aim at the Fair Trade consumer movement which many assume to be entirely benign. Through a razor-sharp analysis based on insider knowledge, Ndongo Sylla shows that there is a big gap between the rhetoric of Fair Trade and its practical results.



Sylla shows empirically that Fair Trade excludes those who need it the most and that its benefits are essentially captured by the wealthiest groups in the supply chain. Based on his experience of working for Fairtrade International, Sylla shows the flaws in the Fair Trade system which compromise its ethical mission.



The Fair Trade Scandal is both a provocative and deeply informative exploration of the Fair Trade phenomenon, suitable for specialists and non-specialists alike.
List of Illustrations

Acknowledgements

List of Acronyms and Abbreviations

Introduction

1. On the Inequalities of the International Trade System

2. The Fair Trade Universe

3. Controversies around Fair Trade

4. Redeeming the Free Market as a Solution to Poverty: The Limitations of the FT Economic Model

5. Looking for the Global Impact of Fair Trade

Conclusion

Annexes

Notes

Bibliography

Index

Sujets

• Economic Development
• Social Science
• Sociologie, société et politique
• África
• Homelessness
• International economics
• Development studies
• Development economics
• General officer
• Developing country
• Economic growth
• Poverty
• Development
• General
• Africa
• International
• Marketing

Informations

• Publié par: Pluto Press
• Date de parution: 10 janvier 2014
• Nombre de lectures: 0
• EAN13: 9781783710140
• Langue: English

Extrait

The Fair Trade Scandal

First published 2013 by Harmattan Sénégal as Le Scandale commerce équitable: le marketing de la pauvreté au service des riches.
First published 2014 by Pluto Press 345 Archway Road, London N6 5AA
www.plutobooks.com
Copyright © Ndongo Samba Sylla 2014
The right of Ndongo Samba Sylla to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.
British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library
ISBN 978 0 7453 3425 7 Hardback ISBN 978 0 7453 3424 0 Paperback ISBN 978 1 7837 1013 3 PDF eBook ISBN 978 1 7837 1015 7 Kindle eBook ISBN 978 1 7837 1014 0 EPUB eBook
Library of Congress Cataloging in Publication Data applied for
This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental standards of the country of origin.
10 9 8 7 6 5 4 3 2 1
Typeset from disk by Stanford DTP Services, Northampton, England Printed digitally by CPI Antony Rowe, Chippenham, UK
Dedicated to

El Hadji Sylla, my father, who made me what I am today. I can never thank you enough.
Contents


List of illustrations
Acknowledgements
List of acronyms and abbreviations

Introduction



1 On the Inequalities of the International Trade System


International trade: a lever for a minority, a handicap for the majority
The problem with primary specialisation: a look back on unequal exchange
Biased practices...
... facilitated by asymmetric game rules
Conclusion

2 The Fair Trade Universe


A brief history of the movement
Introduction to the Fair Trade system: The role of FLO
The marketing success of FT: some figures
The war of labels
Conclusion

3 Controversies Around Fair Trade


The origins of a debate: the abolitionist movement
The origins of a debate: the tradition of free trade
Free trade vs Fair Trade: the neoliberal critique
The alterglobalist critique: the flaws of the promotion of social justice via the free market
The point of view of degrowth
Conclusion

4 Redeeming the Free Market as a Solution to Poverty: The Limitations of the FT Economic Model


Limitations of accounting for the ‘sustainable’
Uncertainties and asymmetries of the FT economic model
The local impact of Fair Trade
Conclusion

5 Looking for the Global Impact of Fair Trade


A non-existent global economic impact
Fair Trade does not benefit the poorest
Fair Trade: an alternative to neoliberalism?



Conclusion
Annexes
Notes
Bibliography
Index
List of Illustrations
Figures



1.1 Evolution of world merchandise trade
1.2 Evolution of world merchandise exports according to development status
1.3 Evolution of the share of developing regions in world merchandise exports
1.4 Evolution of the share of selected groupings in world merchandise exports
1.5 Evolution of the share of developing countries in world GDP
1.6 Evolution of the trade/GDP ratio
1.7 Ecological footprint and biocapacity in 2006
1.8 Changes in ecological footprint and biocapacity 1961–2006
Tables



1.1 Developing countries
4.1 Type of costs entering into the calculation of the FT minimum price
4.2 Distribution of FT groups in 2009
5.1 Gross FT revenue received in the South in 2008
5.2 Budget of selected labelling initiatives
5.3 Number of FT certifications according to the degree of commodity dependency
5.4 Distribution of LDCs according to their trade structure
A1 Productivity statistics according to development level
A2 Transfair USA’s revenue compared to additional FT income transferred from USA (in thousand $)
A3 Transfair USA’s revenues compared to additional FT income transferred from USA (in %)
A4 International merchandise trade – structure by region in 2008
Boxes



1.1 Developing countries
1.2 Vertical integration and horizontal concentration in the cocoa value chain
1.3 ‘The hamburger connection’
1.4 Definition of the Producer Support Estimate (PSE)
2.1 Neoliberalism
2.2 The cost of initial certification
2.3 The standards for small producers
3.1 Arguments in favour of free trade and their limits in the context of developing countries
3.2 Paradoxes of neoliberal orthodoxy
3.3 Wal-Mart: a controversial giant in the small world of Fair Trade
4.1 Method for calculating the cost of sustainable production and the FT minimum price
4.2 Major approaches in terms of impact studies
5.1 The dilemma of a Rwandan cooperative: excluding the poorest of the poor or leaving the FT system
5.2 Millennium Development Goal 8: a global partnership for development
Acknowledgements
I would like to express my gratitude to three of my former professors who instilled in me the passion for research, supervised much of my work, and always encouraged me to explore unusual perspectives. These are Henri Nadel (Université Paris VII Denis Diderot), Jean-Claude Barbier (Université Paris I Panthéon Sorbonne) and Jacques Charmes (Université de Versailles Saint-Quentin en Yvelines and Institut de Recherche et de Développement). This book owes much to these encounters. Mactar Sylla helped me improve parts of this manuscript, as well as Dr Abdoulaye Diallo (Harmattan Sénégal), who edited the French version. I would like to give a special mention to my friend Moustapha Lo (Knoxville, Tennessee), for his tireless comments, for ensuring that I have the books I need, for always showing interest in the evolution of my research and for encouraging me to publish it. I benefited from the constant encouragement of Cheikh Mbacké Sokhna, Moussa Bassel and Ousmane Dieng.
This book was published thanks to the generous support of the Rosa Luxemburg Foundation (RLF) West African Office, which funded its translation. I would like to thank its Director, Dr Claus Dieter König, as well as Dr Arndt Hopfmann, Director for the Africa Department at RLF, who has taken the time to read and comment on previous drafts of this manuscript. David Clément Leye has translated the French manuscript into English, always displaying openness and professionalism. To David Castle, my editor at Pluto Press, who always had the time to give encouragement, advice and suggestions, I would like to express my gratitude.
And of course, the views expressed in this book are solely those of its author and not of the people or institutions mentioned.

Ndongo Samba Sylla
List of Acronyms and Abbreviations
FAO
Food and Agricultural Organization of the United Nations
FLO
Fairtrade Labelling Organizations International (Fairtrade International)
FOB price
free on board price (which includes all costs until the port of embarkation)
FT
abbreviation for the Fairtrade/Max Havelaar labelling organisation
GATT
General Agreement on Tariffs and Trade
GDP
gross domestic product
GFN
Global Footprint Network
HIPCs
heavily indebted poor countries
ILO
International Labour Organization
IMF
International Monetary Fund
LDCs
least developed countries
MDGs
Millennium Development Goals
MMGE
major manufactured goods exporters
MPE
major petroleum exporters
NGO
non-governmental organisation
OECD
Organisation for Economic Co-operation and Development
Oxfam
Oxford Committee for Famine Relief
PSE
producer support estimate
UN
United Nations
UN Comtrade
United Nations statistical database on international merchandise trade
UNCTAD
United Nations Conference on Trade and Development
UNDP
United Nations Development Programme
WFTO
World Fair Trade Organization
WTO
World Trade Organization
Introduction
E conomic alternatives do exist. Or so we’re told. ‘Another’ capitalism, a ‘human-faced’ capitalism even, is possible. Ethics can be introduced into capitalism. The market economy can be made to serve the poor. The search for profit and universal commodification of everything can be useful to humanity and the environment so long as the right steps are taken. In other words, if we believe in what some might consider as a new ‘utopian socialism’, capitalism can be made more accountable, and this for the greater good of the working classes of the world. Microfinance made us this promise and provided many guarantees. Most of us had taken it for granted. But we are still awaiting results, despite the democratic generosity of the idea (Bateman, 2010). Nowadays, in light of the recurring banking and financial crises that are still affecting hundreds of millions of lives, we increasingly hear about the concept of ethical financial investments. Increasingly, the goal is to make ‘responsible’ a global system whose peculiarity is that it does not tolerate any ethical limitation.
In its attempts to redeem the free market, rather than introduce an alternative form of globalisation, Fair Trade is perhaps the most revolutionary and hopeful initiative for workers in the poorest countries of the planet. Its supporters want to put an end to unequal exchange between North and South. They argue that poor workers of the South should enjoy decent prices for what they sell to rich countries. To achieve this, they promote militant activism, namely awareness-raising campaigns, as well as solidarity from consumers in the North. In theory, agreeing to pay a slightly higher price for some goods made from raw materials produced in the South could contribute to improving the living conditions of workers of the South through the Fair Trade networks.
The fact that Fair Trade has achieved a significant impact in some regions of the world is undeniable. But isolated and limited successful experiences are insufficient to argue that this tool has been effective in reforming capitalism. As we will demonstrate in this book, Fair Trade is a new iteration of the free market rationale, rather than an