On Beyond Coffee: Fair Trade and Workers' Rights in a Changing Economy

Authors: Stephen Coats

Stephen Coats is the director of the US Labor Education in the Americas Project, an organization that supports Latin American workers who are fighting to overcome poverty and make a better life for their families. USLEAP especially supports those workers who are employed directly or indirectly by US companies producing for the US market.

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Consumers in the US have grown more concerned about and aware of the conditions under which the goods we purchase are produced. This increased consciousness has led to new models of production and consumption, and a variety of alternative product labels with respect to environmental issues (shade-grown coffee), health (organic produce), animal treatment (free-range chickens), and other concerns. Labels are intended to provide an easy way for consumers to know which products reflect our values.

These trends are now being extended to working conditions and the treatment of workers. In large part as a result of campaigns and news stories about sweatshops in the clothing industry, child labor in the coffee and banana sectors, and slave labor on cocoa plantations, companies have become increasingly concerned about their "brand image." Consequently, a number of programs have emerged that certify that a product is produced under acceptable conditions of work.

Using consumer demand to push for better working conditions has proved to be a powerful approach; the "sweat-free" movement, fueled by college activists and workers' rights advocates working together, has permanently raised the bar on what it means to be a "socially responsible" company. Through its Designated Suppliers Program, the anti-sweatshop movement created a set of standards, adopted by a growing number of universities and some municipalities, requiring that the goods purchased by these large institutions be bought from unionized or cooperative producers.

Fair Food

The most prominent consumer-oriented social certification in the US is Fair Trade, with a black and white label showing a figure holding evenly balanced scales. In the US, this label is managed by TransFair USA, a member of a consortium called the Fair Labeling Organizations which controls the label globally.

Non-profit groups interested in improving the conditions of small coffee farmers originated the Fair Trade movement in Western Europe. It has now expanded to other products and begun to evolve out of its origins as an "alternative" market into the mainstream. Fair Trade is a rapidly growing business, expanding its certification beyond coffee and cocoa to bananas, pineapples, and flowers, with plans to certify apparel.

Fair Trade activists sought out small, independent farms and cooperatives, and provided them with a way to reach consumers more directly, thus increasing their profits. Producers in the Fair Trade network are guaranteed a minimum price for their products, and also receive a cash "premium" to use as they wish -- often this allows for improvements to production methods and to community services. In return for paying the higher price all this entails, consumers are guaranteed that the producers of their coffee were paid fairly and not deprived of their right to organize.

However, responding in part to growing consumer demand, Fair Trade has in recent years begun to certify food grown by different kinds of producers. For instance, almost all bananas imported to the US -- a recent expansion area for Fair Trade -- are grown on Latin American plantations, not on small farms or cooperatives. Some of the plantations which have earned the Fair Trade certification employ hundreds of workers.

While Fair Trade has added new criteria for certification that includes how the workers are treated and respect for their basic rights, the expansion of the Fair Trade model to large-scale producers has raised concerns in the labor movement, particularly with banana unions in Latin America (banana production is the most thoroughly unionized sector in Central America, with many active unions working in effective coalitions across national and ideological boundaries). Long-time Fair Trade supporters have raised additional concerns, including opposition to certification of products marketed by transnational corporations (e.g. Dole bananas or Starbucks coffee) and whether Fair Trade has erred in moving beyond small-scale producers to large employers like the banana plantations. These questions are being debated by trade unionists, representatives of the Fair Trade networks, and global labor activists, in an attempt to find a course that promotes environmental sustainability, human rights, and growth for the promising "Fair Trade" sector.

The Global Picture

While Fair Trade certification is an important instrument for making positive change, the most fundamental issue for workers in the Global South is the rules of global trade. The terms of international trade agreements have an enormous impact on the lives and working conditions of the world's producers. We need strong trade rules protecting workers' right to organize in order for workers in every sector to achieve the kind of conditions that Fair Trade certifies.

In this area, we have lost a lot of important ground with the passage of NAFTA and CAFTA, international agreements that represent steps backwards in the US's ability to push for the enforcement of international labor standards. For instance, in 1999 when seven Guatemalan union leaders were threatened with murder and fled to the US, the US acted in accordance with existing trade law and withheld Guatemala's trade benefits until the Guatemalan government had apprehended and tried the unionists' attackers. Since the passage of CAFTA, however, there has been a resurgence in anti-labor violence in Guatemala (four trade unionists were assassinated in 2007 and another five in 2008, with no charges brought in any of the cases) and the US has not been able to apply any meaningful trade pressure to hold the Guatemalan government accountable.

For those of us in the US, this is a key moment to focus on the terms of global trade. While this issue is not yet foremost on the new Administration's agenda, the debate is being framed for the consideration of several "bilateral" agreements between the US and other countries. Four agreements were negotiated by the Bush Administration. Only one, the Peru Agreement, has been passed. The good news is that these agreements are stronger than NAFTA and CAFTA on the protection of workers' rights. The bad news is that they still aren't strong enough. The Peru Agreement went into effect on February 1 of 2009, so this is an area for close observation.

Sustainability On the Line

Workers are extremely vulnerable to exploitation right now. In 2005, the international Agreement on Textiles and Clothing (also known as the "Multifibre Agreement") came to an end. For 20 years this pact had provided quotas for the amount of clothing that each developing nation could export to wealthier European and North American markets. The World Trade Organization's decision to phase it out has ushered in a period of intense competition among exporter nations, which translates as a "race to the bottom" to reduce labor costs. To this, of course, has been added the impact of the global recession, causing downward pressure on wages and working conditions for workers.

As Fair Trade activists have recognized from the beginning, workers' rights and environmental sustainability are inseparable. In Latin America, banana workers' unions understand this as well, and have been organizing to make the cultivation of bananas more biologically stable (bananas are grown in a monoculture which makes them particularly vulnerable to disease) and less destructive of ecosystems in the communities where the workers make their homes. To wield our greatest power as consumers, we must not only pay a surcharge on some items to cover their real cost -- we must also drop a dime and call our Congress members. We need to hold our governments accountable for strong labor and environmental standards in the agreements that increasingly regulate all global trade, fair and otherwise.

To Get Involved

US LEAP (www.usleap.org) supports those workers who are employed directly or indirectly by US companies producing for the US market.

Citizens Trade Campaign (www.citizenstrade.org) is a national coalition of environmental, labor, consumer, family farm, religious, and other civil society groups founded in 1992 to improve the North American Free Trade Agreement.

Global Trade Watch (www.citizen.org/trade), a program of the consumer group Public Citizen, promotes a public interest perspective on globalization issues, including implications for our food, health and safety, environmental protection, economic justice, and democratic, accountable governance.

Maquila Solidarity Network (www.maquilasolidarity.org), based in Canada, is a labor and women's rights organization that supports the efforts of workers in global supply chains to win improved wages and working conditions and a better quality of life.

Equal Exchange (www.equalexchange.coop) is a leader in the Fair Trade coffee market and runs a lively blog on Fair Trade issues: smallfarmersbigchange.coop