“Better trade”, but only for the powerful?

FTAO reaction to the UK  governments views on “better trade” with developing countries

The United Kingdom’s Secretary of State for International Development Justine Greening delivered a speech on the occasion of the 30th anniversary of the Consumer Unity and Trust Society (CUTS).

The speech had the noble yet highly ambitious objective to identify three reasons that prevent developing countries from enjoying “better trade”. It identified three important factors that prevent developing countries to generate growth, yet without clarifying whether and how such “better trade” implies fair trading conditions for smallholder farmers and agricultural workers.

When the European Union Development Commissioner Andris Piebalgs unveiled the new EU development policy Agenda for Change in 2011, he stated that one of his priorities would be supporting sustainable agriculture and small-holder farming. On 26 January 2012 the European Commission proposed a Trade, Growth and Development strategy, including the support to the participation of small businesses in trade schemes that secure added value for producers as an “effective way for producers to differentiate their product, have greater bargaining power over them and gain price premiums”.  We hope that these important EU policy considerations will encourage the British Government to continue and strengthen its support to small producers and Fair Trade in its trade and development policies.

Imbalances of power in supply chains are, after all, a key blocking factor for small producers, both in Europe and abroad, to make a decent living through trade. The EU Internal Market and Services Commissioner, Michel Barnier recently launched a debate on how the EU can ensure “fairer and more sustainable trading relationships along the food and non-food supply chain”.

In this context, we encourage the British Government to share with its EU partners the lessons learned in the UK in addressing the very same issue. The process started with the British government in 2001 endorsing a purely-voluntary system to address Unfair Trading Practices. Such system failed to deliver and the government eventually decided to appoint a Grocery Adjudicator in 2012, with the competence to initiate investigations, listen to complaints from those with knowledge of the supply chain , guaranteeing anonymity and imposing fines. Let us hope the Commission does not fall prey to the beautiful blue eyes of the agri-food industry and retailers trade associations, which, ahead of the EC decision expected for November 2013, launched with great fanfare on 17 September 2013 a purely voluntary system, with no fines and which does not adequately protect producers in non-EU countries, as a coalition representing consumers and suppliers has stated.

The way that supply chains work (or fail to) in the European Union has direct implications for both consumers and suppliers, in the EU and abroad, as witnessed by a report by Consumers International, theworld federation of consumer groups.

We call therefore on the British Government to uphold its support for open and fair markets by ensuring in Brussels that the EU puts in place, from the outset, a robust and credible mechanism to phase out Unfair Trading Practices covering the entire supply chain serving the EU market, regardless of whether such practices happen in the EU or not.

As such big challenges remain ahead of us, we look forward to our partner Non-Governmental Organisations, the British Government and the European Union Institutions with the aim to engage consumers, the private sector and governments in making trade work for the most disadvantaged.

Sergi Corbalán
Executive Director
Fair Trade Advocacy Office


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