Supporting and Networking Fair Trade: Governments, Companies, Citizens

Speaker: Deborah McGurk, Policy Lead on Fair and Ethical Trade for the Joint Policy Unit of DFID and BIS:

Why is government involved in trade? setting the enabling environment for trade to happen, increasing market access to trade,  aid for trade (turning market access into real trade) – fair trade is an important way of achieving the aid for trade objectives

In 1980 world trade was much smaller – trade exports from dev countries grew massively by 2005 – the projections for 2030 is that 45% of trade is from developing countries- we want to see these grow more and the poorest countries and producers within them rising faster.

Trading services big change over recent years. Globalisation story is positive for growth and poverty reduction. Still high transport costs due to trade-related infrastructure – so many barriers to neighbouring countries doing trade, threat to efficiencies of scale. Sometimes the losers from trade in the short term are a barrier to creating change that will have long term positive impact.

DFID’s recent white paper- Building our Common Future published in July this year – sees growth and trade as a central part of our support to developing countries- over next 4 years massive scale up of funding – committed a 6-fold increase to fair and ethical trade labelling (£12million)

Govt support to Fair Trade currently: DFID through fairtrade foundation provided project support, funding for fair trade schools through funds for raising awareness, since last year involved in new initiative led by Switzerland – an international donor consortium for fairtrade labelling (across Europe, USA and Australasia) (more info here)

Initiatives include Joining up Africa agenda – joining markets, facilitating better flows – supporting devloping countries capacities to trade on their own. Funds are for system development – standard setting, raising understanding and awareness. We do not believe only fair trade labelling is the key, international trade is - fair trade is valuable but not the whole story, it will never be the whole story

Q&A:

Dorothea Kleine – uni lecturer Royal Holloway: globalization is dominated by few large players – saying this is benign for producers without differentiating between different countries is problematic. comparing a company like Tata in India with small producers in sub-Saharan Africa is not clean – we need to think about this in a much more sophisticated way – in your unit in DFID is there that differentiated thinking going on?

70 people within the team – lots of diff thinking. DFID thinks trade is good for growth and development – countries decide when they are ready to trade – South East Asia is a great example of lots of support given before opening their borders to trade

Least developed countries have very long adjustment period- this has the risk of disempowering though – developing countries don’t have the barter capabilities. Aid for Trade is also about helping countries have the capacities to know what their own best interests are in trade.

Q how is DFID tackling these issues in practice?

Lots of examples – ComMark work in South Africa working with regional bodies and private sector looking at removing barriers to change

Q - Patricia- Fair Trade Coalition – peace and security – do any of your 70 policy people address the issues of peace and war and it’s issues with poverty – fair trade as a form of peace building?

We know conflict destroys the gains of development and sometimes positive change leads to new conflict- DFID’s work with a number of countries exiting mass absolute poverty -allows development effort to focus on where the hardest challenges are and those are increasingly those countries affected by conflict – we do see trade as being a valuable part of building links between people (if you’re trading with your neighbours you tend not to be fighting with them) – we see trade as part of the answer and fair trade is part of that too, but not the only part

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