The Global Economy

Make 'free trade' fair

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By Sherrod Brown

September 9, 2003

IN 1999, THOUSANDS gathered to protest the World Trade Organization (WTO) ministerial meeting in Seattle. In September 2003, thousands more will gather in Cancun, Mexico, as international leaders meet for the fifth WTO ministerial.

These demonstrators will be demanding comprehensive reforms to an international trade system that has failed to improve the social and economic conditions for millions around the globe. The WTO model - forcing poor countries to open markets to wealthy nations - is not working.

The failures of the WTO are nowhere clearer than in agriculture policy. In the United States and across the globe, rural economies and farmers have been devastated by artificially low prices in almost every major commodity. Large, multinational corporations now control trade in major commodities by selling below the cost of production on the global market.

WTO policies have led to economic insecurity, instability and an increase in illegal crops and crime throughout the developing world. Increased migration from rural to urban centers has exacerbated poverty and joblessness. In the 10 years since NAFTA was signed, 1.7 million jobs have been lost in the Mexican countryside. Not only do WTO practices destroy lives, they destroy cultures.

As government leaders meet in Cancun, they should consider "Fair Trade" alternatives - a model that joins sound economic policy, political will and consumer-driven market demand. Fair Trade offers economic opportunities for millions of farmers, workers and small-scale producers. It guarantees fair prices and forges direct links between producers in the developing world and companies that market their products to consumers in North America and Europe.

For example, in the coffee sector, nearly 25 million farmers in Latin America, Asia and Africa have seen prices fall by 70 percent in the last five years. To combat artificially low market prices, Fair Trade coffee farmers are guaranteed a living wage - approximately three times the current world market price for coffee, $1.26 per pound vs. 40 cents per pound. Fair Trade practices now benefit more than 675,000 of these farmers and their families in 22 countries around the world - farmers who are able to bypass exploitative practices and sell their coffee directly to markets in North America and Europe at above-market prices.

In contrast to charitable donations and development aid, Fair Trade is a business-based approach that generates economic self-reliance. It enables producers of coffee, chocolate, bananas and other goods to lift themselves from poverty. With premiums generated through Fair Trade prices, communities are able to invest in services such as education, housing and health care, and are thereby able to reduce dependence on foreign aid and create stable, healthy societies.

Fair Trade benefits consumers by guaranteeing high-quality goods produced with labor and environmental standards that empower people, pro-tect the environment and stimulate economic growth.

Many businesses have joined the coalition promoting Fair Trade. More than 150 companies, including Starbucks, Sara Lee, Green Mountain Coffee Roasters, Dunkin' Donuts and Seattle's Best, now offer Fair Trade Certified coffee in over 15,000 U.S. locations. Hundreds of other businesses offer Fair Trade products, ranging from musical instruments to clothing and jewelry. Demand for Fair Trade goods is growing, registering over $400 million in sales globally in 2002.

Large, multinational corporations understand that each successful worker or producer in a developing nation is a potential consumer. At the same time, they must accept that when a high-paying job is relocated from a developed nation to a poorer nation, a consumer is lost. The Fair Trade model benefits corporations, farmers, producers, individuals and economies. Workers in developing nations receive fair wages for crops and products, and are able to afford more goods produced domestically as well as abroad.

As the world's attention turns to the Cancun ministerial, the WTO should abandon destabilizing, exploitative models, and support a long-term approach that makes free trade fair - a model for equality, debt reduction, and the creation of a robust global economy benefiting all.

Sherrod Brown represents Ohio as a Democrat in the U.S. House of Representatives. He is a senior member of the International Relations and Energy and Commerce committees.

Copyright 2003, The Baltimore Sun