Our Trade Justice Activities

Fairtrade brings tangible and invaluable benefits to producers all over the South. However, only a small percentage of the total number of farmers, craftspeople and workers who are dependent on trade receive those benefits because the Fairtrade market, although growing, is small. Most producers operate within a system of trade which is far from fair in that they cannot make a decent living from the price they obtain for their products. Fairtrade campaigners are therefore also involved in pressing for changes in this system.

Our main aim is to address the problems which developing countries face in their trading relationships with the rest of the world, especially with the rich countries of the G8¹. But we also look at other issues connected to world finance and their effects on developing countries.

To do this we obviously need to take a close interest in the way the rules and regulations for both trade and finance, which are largely drawn up by the rich countries, affect poorer countries. And when we find anything which has a really serious adverse impact we decide what action, if any, we can take.

We continue to keep an eye on two long-running trade justice issues where there is an unacceptable failure to recognise the needs of developing countries. These are the Economic Partnership Agreements (EPAs)² between the European Union and the African, Caribbean and Pacific countries, and the Doha Round of talks through the World Trade Organisation. These talks drag on as the richer nations demand concessions from the developing countries, who in turn are refusing to yield. One reason for this is that the US in particular, but also the EU, feel threatened by the rise of China as a trading nation.

Many commentators see the Doha Round of talks, which began in 2001, as completely stalled. Pascal Lamy, the Director General, is still trying to rescue some agreement which will benefit developing countries. There is deep disappointment for Trade Justice campaigners that attempts to reverse the injustices of the cotton subsidies which are paid by the EU and the US to their farmers have failed. The production of this natural commodity should lift farmers in West Africa out of poverty. The countries known as the 'Cotton Four'- Benin, Burkina Faso, Chad and Mali - produce cotton at a low cost that should enable them to make a profit in the market. But they come up against competition from the US and the EU where cotton farmers are paid subsidies.

The result of these failures is that there has been an increasing number of Free Trade Agreements between individual and groups of countries. Such moves undermine the purpose of the WTO which was to make global agreements.

We are continuing to lobby MPs to press the government to institute what is known as the Robin Hood Tax. This tax on the financial sector has the power to raise hundreds of billions every year globally. Eleven of the countries in the EU have agreed to impose such a levy, but the UK Government maintains that it would undermine the activities of the City of London.

One success lobbyists throughout the UK can claim is on Vulture Funds. These funds buy up a poor nation's debt at a low price, and then go to court to recover the full amount. In one of its last acts before the election, Britain's parliament has voted to ban so-called "vulture funds" which make large amounts of money from third world debts.

A recent important issue in which Trade Justice campaigners have become involved are those concerned with Tax Justice. This is clearly an issue with wide ramifications. It relates to the question of unfairness in trade in that tax is the most sustainable source of finance for development. The long-term goal of poor countries must be to replace foreign aid dependency with tax self-sufficiency. Developing nations in Africa, Latin America and elsewhere are especially vulnerable to the practice by multinational companies of using Tax Havens. Action on tax has the potential to deliver gains to poor countries that are orders of magnitude greater than what can be achieved with aid. To meet the Millennium Development Goals, OECD countries have been urged to raise their levels of aid to 0.7 percent of Gross National Income – but this is as nothing when compared to potential tax revenues: in some rich countries, tax constitutes over 40 percent of GDP.

Clearly we don't achieve quick results: progress is measured usually in small steps, and we don't do it alone. Any successes always come from working with others - with other groups like ours and with NGOs like Oxfam and Christian Aid who are all part of the Trade Justice Movement.

So how do we lobby? We write letters to ministers, MPs and MEPs, and sometimes to companies. We also take part in public protests at local and national level to bring the problems of developing countries to the attention of the press and to those who can influence negotiations.

• The Group of Eight (G8, and formerly the G6 or Group of Six) is a forum, created by France in 1975, for governments of eight nations of the northern hemisphere: Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States; in addition, the European Union is represented within the G8, but cannot host or chair.
• Economic Partnership Agreements, or EPAs, are arrangements between the EU and the group of 79 African, Caribbean and Pacific (ACP) countries. The need for such agreements arose from the challenge made in the WTO to long established agreements between the EU and the ACP which has offered a degree of protection for the exports - such as bananas and sugar - from the ACP countries, most of which were former European colonies. In December 2007, 35 ACP countries bilaterally or sub-regionally signed agreements, although only a group of Caribbean countries (CARIFORUM) signed a full agreement. The agreements require trade liberalisation - the removal of tariffs - in return for continued entry for ACP goods into EU markets. There has been much criticism of the way these agreements have been pushed through under threat of the total removal of protection and diminishing levels of aid. This approach has resulted in rushed deals, removing the opportunity for appropriate expert or public scrutiny as well as debate of the content either in ACP countries or Europe.
• Tax havens are sovereign areas which offer low or zero taxes and provide facilities for people or corporations to get around the rules, laws and regulations of other jurisdictions, using secrecy as their prime tool.