The Changing Tide

There is much to celebrate about Fair Trade. Its dramatic growth and increased acceptance as a legitimate social and economic movement are cause for optimism. That large corporations have started to dabble in marketing Fair Trade products is a further indication of its permanence in the marketplace. For a movement that began as an alternative and which still represents less than .01% of global trade, being emulated by transnational actors is a remarkable accomplishment.

This is, however, far less than the whole tale. The most inspiring aspect of the Fair Trade story remains largely untold. There has been a greater depth of influence and impact than is often explicitly acknowledged.

It’s important to remind ourselves that Fair Trade emerged from a global context which celebrated Milton Friedman’s mantra that the only social responsibility of business was to increase its profits, a philosophy that has today been rejected by almost every credible business and corporation. The sustainability reports and corporate social responsibility documents issued by thousands of transnational corporations signal the passing of Friedman’s theory. Nike, Shell Oil, Talisman Energy, Reebok and The Gap for example, have all gone to great ends to demonstrate respect for human rights and awareness of the impact their business activities have on local communities. Virtually no transnational corporation today will refute their human rights obligations (although they may dispute the extent of those obligations), despite the fact that not one international treaty or convention legally constrains them to this new position.

This shifting view of business responsibility is most clearly evidenced by the ten non-binding UN Global Compact principles, which are endorsed by over 5,000 companies from almost every sector of business across 135 countries. These principles require subscribing companies to ensure human rights in business relationships, adhere to labor standards that empower workers, and protect the environment.

To some extent, the Compact’s requirement that subscribing members explicitly “support and respect internationally proclaimed human rights” and ensure “they are not complicit in human rights abuses” goes even further than do the World Fair Trade Organization’s (WFTO) 10 Standards of Fair Trade. It is remarkable that a mainstream global economic movement with powerful adherents in almost every corner of the world preaches a blunter and higher level of responsible business behavior than does the WFTO, at least as it pertains to human rights.

Yes, there are hypocrites among those business and corporate members of the Global Compact who say one thing to an admiring public and behave badly to those trapped within their sphere of influence. Yet by endorsing the Compact’s principles, the hypocrite advances their legitimacy. Louis Henkin, one of the most influential human rights scholars of the last 50 years, put it best when he said that “even hypocrisy may sometimes deserve one cheer for it confirms the value of the idea.” He further elaborates that hypocrisy “is the homage that vice pays to virtue.” While still holding the hypocrite accountable for their actions, we should not forget to also applaud the small steps that the skeptical and timid are taking towards a new business model beholden to multiple bottom lines.

While it is impossible to prove the influences responsible for the evolving business perspective that the Compact represents, what is evident is that echoes of many of the core values of Fair Trade are present in the Compact and other codes, standards or documents that define the contemporary role of global business. These baby steps, which most directly apply to the 99.99% of global trade that is not Fair Trade, send forth ripples of hope and energy that should inspire both Fair Traders and mainstream businesses to continue examining their global impact and harnessing business’ potential as a vehicle for social change and justice.

This reflective process poses no threat to Fair Trade nor does it require Fair Trade to compromise on its values, goals or objectives. Rather, it offers an opportunity through dialogue to multiply the impact of the principles that we hold dear. Let’s welcome these mainstream businesses to the conversation and press them to do better.

Lowell Ewert is Director of Peace and Conflict Studies at the University of Waterloo, where he teaches a course on Fair Trade.