Forgot your password?
Obama and Fair Trade
As the newly inaugurated President of the United States steps up to the plate to fill one of the most powerful positions in our day, the world anxiously awaits to see what will become of his ambitious plans – and promises – for change. Promoters of Fair Trade are just as eager to see what will become of Obama’s rhetorical shift towards fairer and more equal terms of international commerce.
By Sophie Verdon, Coop Sol intern
Throughout his campaign, Obama advocated elements of the Fair Trade movement, including better environmental stewardship and improvement of global labour conditions. During his inaugural speech earlier in January, the President emphasized the need for a different approach to global commerce: “This is the moment when we must build on the wealth that open markets have created, and share its benefits more equitably. Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favours the few, and not the many. Together, we must forge trade that truly rewards the work that creates wealth, with meaningful protections for our people and our planet. This is the moment for trade that is free and fair for all.” (President Obama’s inaugural address, Wednesday, January 21st 2009 http://www.whitehouse.gov/blog/inaugural-address; emphasis added)
And he isn’t alone in his approach to changes in international trade; the November elections welcomed nearly 40 members of Congress who have actively pursued principles of Fair Trade in their political platforms. The Trade Reform, Accountability, Development and Employment (named TRADE – http://www.citizen.org/trade/tradeact/) Act was introduced in June 2008, advocating a review and renegotiation of existing trade pacts like NAFTA. President Obama may potentially support this Act; he frequently mentioned the renegotiation of NAFTA in his campaign speeches. The TRADE Act might provide the perfect opportunity to promote and develop Fair Trade in the US and worldwide. In the Bush administration, multinational corporations soared under fervent free trade measures, paralyzing the efforts of Fair Trade promoters in Congress. The rhetoric of the new administration – calling for a drastic overhaul of much of the Bush legacy – promises a different future. The promotion of Fair Trade within the American political context could also set an important standard and provide a great opportunity to develop an international base for Fair Trade.
But how do all these lofty plans for fairer trade play out amidst the pervasive economic crisis? Since we’re still in the preliminary stages of the global recession, we have yet to really see what its effects are on the Fair Trade market. Some could argue that during times such as these when people are already spending less in general, the added cost of buying Fair Trade products might convince people to turn to cheaper conventional options. Likewise, companies that have recently jumped on the Fair Trade bandwagon and invested in certifying a portion of their products may respond to the dip in sales by cutting their more expensive offerings – Fair Trade being one of them. Starbucks, who was certified five years ago, recently committed to doubling its purchases to 40 million pounds of Fair Trade coffee for 2009, making it the largest purchaser of Fair Trade Certified coffee in the world. But, these days, with a clientele that is much more reticent to pay the premium for higher quality coffee, will Starbucks follow through on its commitment to paying a fairer price or opt for an easier path towards recuperating its large profit margins? Or might they consider reviewing their "profit maximizing objectives" and accept a lower than 40% mark-up on the Fair Trade label?
Indeed, the mass-marketed brand of Fair Trade may take a toll over the next couple months or years. However at the same time, the current economic context may open a new door for Fair Trade as consumers and citizens around the world seek alternatives to the capitalist model that many people see as responsible for the current economic mess. This crisis may encourage people to choose a sensible and more effective way to use their purchasing power. Though evidence has yet to be officially published, we have already witnessed surprising figures within our own networks. Several roasters of Cooperative Coffees boasted record sales in November and December 2008. Perhaps in the face of economic hardship, consumers are further motivated to make their purchases count. And with a new President of one of the largest economies in the world, pushing for a change in the status quo of international trade, this might be the opportune moment for this new way of thinking.
At this point, all we can do is wait and watch for what might be a major breakthrough for Fair Trade both in a political and economic context. The way Obama handles the economy – whether he sticks to his promise for more equitable terms of trade or caves in under the pressure for freer trade – will affect the prospects for Fair Trade. Concrete measures have yet to be put into place; real change in the economic worldview of the US – which was founded on capitalist principles of free and opportunistic trade – will take time and prove to be a great challenge for the new President, if he dares to take it on.
