In today's global economic environment, corporations are typically sourcing overseas with a view to drive down their costs and maximising sales and profits. By using their immense bargaining power, they take advantage of weak regulatory rules in developing countries and source low quality products and cheap labour, often with no regard for environmental, cultural and social impact on the local communities.
The typical garment mill worker in a developing nation, for instance, is paid exploitative wages, over-worked in unsafe, unhygienic 'sweatshop' conditions, intimidated and deprived of basic human dignity and a decent livelihood.
How is fair trade better?
The fair trade movement, rather than attempting to reverse globalisation, recognises the power of a world marketplace to alleviate global poverty. By working to generate awareness and garner support from the ethical consumer, it harnesses purchasing power to cause positive change, creating a win-win situation.
As awareness grows, consumers choose a better, more equitable world by demanding higher quality, ethically made goods and paying a small price premium to assist struggling communities in producer regions.
For the small farmer, a fair trade price for their output covers the costs of sustainable production that promotes quality products. It promotes use of safer ecological methods that preserve the environment instead of degrading it. An additional 'fair trade premium' is invested in community projects to help improve the low standard of living eg. entire villages can have safe drinking water, schooling and medical facilities where none existed before. By working within fair trade projects farmers are assured long term partnerships with buyers, sustainable working conditions and financial credit without fear of exploitation.
For factory workers, fair trade ensures that employers pay decent wages, ensure health and safety standards, guarantee the right to join trade unions, and provide a favourable work environment. Estimated retail sales of Fairtrade Certified products in Australia and New Zealand grew by more than 200% between 2009 and 2010 to nearly AU$150 million. For more information visit www.fta.org.au.