Fair Trade Discussion

[Papa Mbengue]

Hello everyone,

 

I just would like to bring about my contribution to the today presentation about the pertinence of Fair Trade. I think that Fair Trade is an important component of the world's global development as a whole. When we are trying to better inform consumers about where the products they daily buy are coming from, and to put the producer's face on that product, we are making a positive difference. However, I deeply believe that providing the adequate education to producers would have been the most important fair trade. Giving education to producers will ineluctably help them empower themselves, and give them the necessary tools to make the right decisions for themselves. Fair Trade could not succeed, if we take concepts and theories from the developed countries and try to adapt them to third world communities, mainly because the contexts and realities are not the same. For example, if we tell to a farmer from Ivory Coast, who has inherited the farm from his ancestors, and run the same farm from generations;  who is using his children as a means of production, but also as a training tool to teach them the secret of farming, that this is child exploitation, he might not understand that reality and therefore will not agree with it. I think we have to take into consideration the cultural and economical differences and we must collaborate with  third world communities' local expertise when we want to get them involve in programs of development.

[Sachiko Phuong]

Fair trade has been a rapidly growing movement and it is always
important to consider every situation from all standpoints. In light
of this, come up with a variety of stakeholders that are affected by
the fair trade movement. Discuss what types of stakes they have when
it comes to fair trade (e.g. financial, interest, legal, moral). Be as
general or as specific as you want in selecting a stakeholder, but
make sure to elaborate on the types of stakes they hold.

To start you off, the farmers that supply the products as part of a
fair trade agreement have financial stakes because they are given
higher wages. If not for these agreements, they would be making a
significantly lower income that would cause further negative impacts
on their standard of living.

[Jaime Alvarez]

Hi everyone,

I'm completely agree with Papa when he says that we can't apply the same concepts of what we consider what's right or wrong in developed and in developing or un-developed countries. Of course that there are situations where work conditions are unacceptable or where child exploitation is a reality but as Papa mentioned the case of the father transmiting his know-how to its children, there are other cases of countries where the children, due to the lack of education, have no other choice than to work. Taking them away that opportunity to work could avoid its family from earning enough money to survive or those children could find themselves commiting crimes or involved in drugs for example. I think it's very important as someone noted in the conference, that people put pressure not only on corporations but in governments so they can provide the conditions for children going to school instead of having to support economically their families.

El lunes 5 de marzo de 2012 22:14:20 UTC-5, Papa Mbengue escribió:

Hello everyone,

 

I just would like to bring about my contribution to the today presentation about the pertinence of Fair Trade. I think that Fair Trade is an important component of the world's global development as a whole. When we are trying to better inform consumers about where the products they daily buy are coming from, and to put the producer's face on that product, we are making a positive difference. However, I deeply believe that providing the adequate education to producers would have been the most important fair trade. Giving education to producers will ineluctably help them empower themselves, and give them the necessary tools to make the right decisions for themselves. Fair Trade could not succeed, if we take concepts and theories from the developed countries and try to adapt them to third world communities, mainly because the contexts and realities are not the same. For example, if we tell to a farmer from Ivory Coast, who has inherited the farm from his ancestors, and run the same farm from generations;  who is using his children as a means of production, but also as a training tool to teach them the secret of farming, that this is child exploitation, he might not understand that reality and therefore will not agree with it. I think we have to take into consideration the cultural and economical differences and we must collaborate with  third world communities' local expertise when we want to get them involve in programs of development.

[Yuan Yuan Lin]

I would to post a few questions from our group.

1. Naik did a good job discussing the benefits of fair trade, but
there are always two sides to a story. What do you think are the
disadvantages of fair trade?

2. As future entrepreneurs, business people and international leaders,
please provide a SWOT (Strength, Weakness, Opportunities, Threats)
analysis of
fair trade.

3. Naik used Wal-Mart as an example to illustrate the fact that
factory workers that work 18 hours a day, sleep in rock hard bunks
that provide little comfort, and don't get paid well at all. Who do
you believe should be blamed, Wal-mart itself or the country in which
the manufacturing is taking place? What new laws do you think could be
created to ensure the protection of these workers?

4.Could you provide an example of the negatives of globalization on
your nearby communities based on the social, economic and political
effects of this growing phenomenon? As consumers of this social
movement, how can we, as stakeholders,ensure we are purchasing from
socially responsible retailers? or push for fair policies to monitor
fair trade?


On Mar 5, 10:14 pm, Papa Mbengue <85mben...@cardinalmail.cua.edu>
wrote:

[Andrew Petersen]

Referring to your third question, 

I believe that both the companies abusing their respective workforces and also the countries allowing these corporations to do so are to blame. By pressuring countries to promote fair trade on a global scale seems somewhat unrealistic. Many nations rely on dirt-cheap manufacturing processes, such as extremely long work hours, to keep their exports competitive and economy afloat. If fair trade were a worldwide obligation, the less developed countries would suffer from a significant disadvantage in manufacturing and providing competitive products at comparable prices. 

On the other hand, going after the corporations themselves almost seems beside the point as well. If these organizations are using legal operating practices, many efforts will simply be ignored or be useless until stricter policy is passed (again going back to the country rather than the corporation).

One option is to target the consumer. Similar to organic groceries and “open-range farming”, promoters for fair trade should focus on the product’s benefits rather than lobbying governments. By implementing a system that allows shoppers to easily recognize products that are being manufactured using abusive working conditions may discourage purchases from those organizations. The system would simply make global production (in particular manufacturing) much more transparent. Small symbols or icons on every product’s label or tag would give a brief background of how that product was produced; for example a circle of green arrows may mean the product was made with recycled materials. After all, encouraging companies rather than attacking them may prove to be a more effective angle for fostering change.

- Petey

[Rene Charbonneau]

In terms of trying to change companies I think that it is a non issue for fair trade. I believe fair trade at the current rate is unsustainable. The growth of local run companies that try to become multinational corporations (MNCs) while sourcing completely locally is unsustainable as well. The cost and benefit from china is not just the cheap labor but the scalability of the operations. Economies of scale is extremely important in competitiveness, the two basic most feasible competitive advantage are "economies of scope" and "economies of scale" ( Panzar and Willig (1977, 1981)). Using Apple as a case study we see the flexibility and rapid scalability that is impossible in the US (NY TImes, 2012). This shows that the core competency of the US is no longer large agile manufacturing (however some may disagree) (HBR, 2012). 

We are seeing a trend that has been going on for 100s of years a company growing to serve more people as effectively as possible. These countries that are so called being exploited do reap benefits from having MNCs in their backyard. There is not a monopoly on international trade, this means that we still receive the benefits of MNCs being competitive. Prices do go up due to oil and other facets of the global economy (more info in "why your world is about to get a whole lot smaller", J. Rubin  ),this is why we are about to have near sourcing. I thing that fair trade is a poor solution to a complex problem, by continuing what we are doing around the world we are still providing education and development. Some people might not agree with the process, but I would lie you to take a look at the past. There was cheap labour in the US and other developed countries. Things do change, change has to begin within.

Regards,

Rene Charbonneau

[Yacintha De Lannoy]

 

 

Hey everyone,

 

Fair trade is indeed an important aspect of trading internationally. In a more globalized world, it is getting harder to track the origin of goods we buy. 'Made in China' is becoming more and more universal, and therefore we should make sure that these goods are produced in a humanly respectful way. In my opinion, fair trade does not mean paying higher prices or reducing cheap labour. It means that workers are not being exploited in bad circumstances by few people who have some power. I think one of the key goals that fair trade should pursue is to face out child labour. Currently, fair trade is mostly focused on small African farmers who  have problems to be competitive with few big producers. Although this is still a big issue, it is time now for 'Fair Trade' to relocate its focus to other parts in the world such as China, India and other vast emerging markets.

 

Op dinsdag 6 maart 2012 04:14:20 UTC+1 schreef Papa Mbengue het volgende:

[Lizz Carter]

I think there is a misconception out there (actually, no, I know there
is) that economic analysis is about looking only at the monetary
implications of business decisions, such as moving towards fair trade.
I took a liking to environmental economics because it was the first
time I really realized this. There has been a lot of disbelief that a
company would ever have incentive to move towards fair trade because
it would be too costly, but there really is a significant amount of
incentive. It's going to be different for every business, and yes,
it's going to likely cost them more, but all that means is that it's
actually the giants (like Wal-Mart) who would be most able to afford
it. It's rather unfortunate that they haven't realized this.
But the real job of an economic analysis is to include every possible
benefit and every possible cost. To internalize external costs and
benefits that may not be easily measurable in dollars. The benefits in
fair trade are going to include everything from the benefits of the
working conditions of the foreign suppliers, to the marketing benefits
of creating a socially-conscious image of the company. Ben & Jerry's
realized this, and I know several people who will buy B&J's ice cream
specifically *because* they support fair trade. Part of your analysis
must look at how many potential customers you could pick up by
creating such an image.

My college is located in a very small town in Iowa, the entire town is
Dutch-themed and very traditional. The square is full of small, local
businesses. I could discuss a lot of things here, like how big of a
controversy it was when Wal-Mart wanted to build a supercenter. Or how
the local businesses managed to survive only because of the loyalty of
Pella citizens. Or about one local shop in particular called Work of
Our Hands. It's a fair trade shop full of handmade trinkets and
jewelry made by people around the world, and 100% of their money goes
back to the countries they get their products from. They even have a
punch-card-type system where, if you buy items from 5 different
countries, you get a discount on your next item. The stuff in here is
not particularly cheap, of course, and most of the things are not
practical/useful items. But I will always try to buy at *least* one
Christmas present for someone there every year. I'm willing to shop
there because I respect and appreciate the good they are doing for the
world, and besides that, these are unique, genuinely one-of-a-kind
gifts. It most definitely is worth it.

[Leisy]

Fair Trade is a topic that I have always been curious about, but for
some reason it ends up going to the back burner and forgotten among a
thousand of daydreams. Fair trade as an organized social movement and
market-based approach that aims to help producers in developing
countries to make better trading conditions and promote sustainability
is a juicy subject for us business majors. Then again, for some reason
(capitalism and globalization comes to mind), business schools only
skim the topic without promoting a fair debate about it.
After listening to our guest speaker, I felt fired up about the Fair
Trade movement again. The effort advocates the payment of a higher
price to exporters as well as higher social and environmental
standards. It focuses in particular on exports from developing
countries to developed countries, most notably handicrafts, coffee,
cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit,
chocolate, flowers and gold. If we look at the concept, it makes
perfect sense as it is an effective way to balance out the world
wealth and put some money back at the roots where the resources and
hard work take place. But again, we are going through tough economic
times and as much as we want to participate and make a difference with
our hard earned dollars, it may be hard to pay higher premiums for
Fair Trade products. For now, I will concentrate on volunteering my
time to the cause and alert those who can may a positive difference on
how to spend more wisely according to Fair Trade certification’s
standards. I may not be able to afford yet expensive handcrafts to
support a family somewhere in the world; but I’d happily take a second
look at my chocolate to make sure is Fair trade certified and free of
child labor.


On Mar 5, 11:14 pm, Papa Mbengue <85mben...@cardinalmail.cua.edu>
wrote:

[Chris Layton]

Hi Yuan Yuna Lin,

This is in regard to your third question. The blame game is always an
interesting game to play. I think first, we must blame the underling
economic structure of the country in which the workers are working.
Assuming the workers are not forced to work in the factories, field,
etc, they are doing it of their own free will; however, how free are
they? It is quit possible that if these workers didn’t indoor the
harsh living conditions, they might not be able find sufficient
employment to meet their basic needs. Thus these people are probably
working 18 hours a day because it is their best alternative and they
choose it for themselves.

There still leaves the question, why is their economic structure in
such shambles that people must work 18 hours a day to provide for
themselves and their families. I believe exploitation of third world
countries, dating back hundreds of years, has lead to a process by
which third world countries are exploited not only by other countries,
but their own political leaders. I think the third world countries
have had a lot of their natural resources taking at unfair rates. I
also believe the process by which third world countries switched from
producing goods for domestic consumption to producing goods for
exportation has severely reduced third world countries abilities to
provide for themselves.

So I do not directly blame Wal-mart, or the current status of the
country, but the system which has been formed over hundred of years.

I believe third world countries may benefit from concentrating more on
domestic production of basic necessities to be consumed within their
countries. Also, I think more wages should be paid to workers. A
worker makes about 13 cents an hour, I would be willing to pay 5 cents
more for a $35 pair of jeans to give the worker a 38 percent increase
in their income; however, the greed of the employer of the workers
would lead them to collect all the extra money. Laws would have to be
enacted to directly increase the wages of workers through very
moderate price increases. I think I read something once that said a
$35 pair of jeans gets sold from a Chinese factory at $2.17, and each
worker makes a few cents per pair of jeans.

[Andrew Stumbo]

In reference to your first question,

Most people agree that fair trade is absolutely necessary and there are a number of benefits. However, as you mentioned there are certainly some disadvantages as well. I feel that the biggest disadvantage comes in the form of higher prices and less availability. Since companies or suppliers are unable to produce as cheaply with fair trade, these increased prices will work their way down the supply chain and eventually end with the customer. This means higher prices for the customers. 

Many people push for fair trade but then complain about the increase in prices. It's important for these people to understand that the reason the companies are able to sell products so cheaply (ex: Walmart) is because they can produce them so cheaply by not practicing fair trade. In order for fair trade to be successful, customers must accept that prices will be lightly higher but they can rest assured that a 12 year old overseas didn't produce the product. 

Another issue would be that there is a possibility is less availability of products when fair trade is used.Naik mentioned that overseas factories can sometimes operate 16 or 18 hours each day. These long work days provide enormous productivity that can not be matched by a factory in the U.S. working an 8 or 10 hour day. This could possibly lower the availability of these products. Scarcity of products can also be another force in driving up prices. Most everyone agrees that fair trade should be required, but they must also be willing to deal with the negative consequences that come along with it.

[stephanie lee]

In rederence to your third question:

I agree with the student who raised this question at the conference that day. I don't think Walmart and other companies are to blame for the issue with employees having poor living situations, low wages, and long hours.. The countries where these companies are located should have better laws and protections for their workforce. They should implement laws like the U.S. and other developed countries, that put a limit on wages (minimum wage), They should also think about better living quarters for employees.

[Lizz Carter]

I would have to disagree with you here, Stephanie. Yes, the countries
absolutely should provide better conditions. But Wal-Mart's decision
to get their inventory from places they know, and the customer's
decision to purchase from Wal-Mart when they know these things, makes
both groups equally to blame. The way Wal-Mart pressures its suppliers
in order to get such low prices pretty much requires them to have
terrible conditions for their employees.
And besides all of that, minimum wages come with their own costs. They
raise the cost of living and create (or raise) unemployment, and
because of that, may actually lower the quality of life in some cases.
Also, developing countries, in a lot of situations, don't have a
government that would, or could, create these sorts of laws. Perhaps
because they are corrupted, or perhaps because they just do not have
the power to.
This is a very complicated situation, and oversimplifying leads to a
lot of problems and incorrect or incomplete conclusions.

On Mar 11, 5:37 pm, stephanie lee <stephanie.lee83...@gmail.com>
wrote:

[Minwoo Lee]

Dear Yuan Yuan Lin,

Regarding your first question, although fair trade is good concept for both sides, it's still controversy. 

People who want to export their harvest will benefit from fair trade, but they will be still dependent 

on the importer. Because exporters would not have many options. They should harvest the crop

that they made contract with fair trade company. If the fair company change their mind due to 

company policy, farmers would not avoid losing their contractors. 

Also, fair trade is not good for supplying their own food. If you want to import coffe beans from Ethiopia

with fair trade, every Ethiopian will harvest coffee. It's good for them in short-term, but nobody will not 

harvest other crops because of low profit. This concept will not be helpful for the economy of the developing 

countries.

Fair trade should be spread throughout the world but we need time to think about the benefit in return.

Thank you 

2012년 3월 6일 화요일 오후 3시 59분 56초 UTC-5, Yuan Yuan Lin 님의 말:

[Hye Yeon Park]

Hi, Everyone.

Fair Trade is one of the hottest Topic in this Globa Trade World.

It is an organized social movement and market-based approach that aims to help producers in developing countries to make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to exporters as well as higher social and environmental standards. It focuses in particular on exports from developing countries to developed countries, most notably handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate, flowers and gold.

 

Although, Every company or Economy assert they participate in Fair Trade, it is not true.

Let me tell an example of African children.

They made footwear or clothes in very low wage. Most of Profits from trading were taken by all companies who manage them.

I think we cannot solve this problem in this generation and environment. It is a chronic issue for more than 50 years.

But we try to solve this issue in our generation. You are going to be famous traders in the near future.

Please consider the third party in the World, when we trade something or make profits.

 

 

[Yukiko Wakabayashi]

I would try to answer your first question mainly from the view of cost
of fair trade.

As someone told, obviously high price of those fair trade products are
a kind of burden. Consumers may be unwilling to buy those expensive
products and prefer cheap products through mass production with labor
problems. Or even those products were inexpensive, they still needs
quality as commodities in some extent. When I found a poach through
fair trade store, it was nice design but not well sewed unfortunately.
Even it try to sell valuable thing, first products must be products
which are as much valuable as other products which is sold for profit.
I hope my experience doesn't happen so often, but I guess still there
are some cases I experienced. In order to sell fair trade products to
be bought instead of other products, companies or people have to train
and educate the producers to make valuable products in a careful
manner. The producers might be potentially good at making those
products neatly. Even so, someone has to help them to deliver their
products on time when the products will be sent to other countries.
This is because some community might not familiar with the commercial
system to sell their products through international trade.

In different situation, fair trade also costs more than other
manufacturing. Managing and supervising all the process might be
needed in some area. As someone already said, even some goods are sold
through "fair trade", the reality might be different. Some producers
might be still pressured by owners to work over 18 hours. To prevent
such a situation, some other people have to see and check regularly if
all the processes are going legitimately.

As I mentioned, fair trade needs more budget to complete trade fairly
for both of the producers, consumers and mediums. However, fair trade
itself basically is worth of using to help the people in developing
countries and to make us aware of the situation that we may suppress
some people to fulfill our own need.

[solange rubio]

Hye Yeon Park brings up an interesting point, calling fair trade a “hot topic”. As consumers I think we are seeing the words fair trade more and more, as they have become a marketing strategy for many products. While I do believe there is some good being done with this trend, I also feel a little skeptical. Many companies may not be actually improving conditions of their workers, but tagging their products as “fair trade”. I am an adamant believe in educating the consumer and the worker.  I believe there needs to be a campaign educating the consumer on when a product is really fair trade and what fair trade means. Also, what may pass as a “fair wage” in a third world country may be extremely below our perception of what we believed it to be. Therefore, not only is the worker being taken advantage of , but also the consumer.

I also like the point Yacintha brought up previously back, about the role of a corporation extending beyond just fair wages. I don’t believe “fair trade” means anything if the corporation is not involved with its workers in the community they are in.  What I’m talking about is Corporate Social Responsibility.  What is the point of only advancing the life of one individual when an entire community is still suffering?

P.S.-

Unfortunately, I was unable to attend the presentation on fair trade, so this may limit my knowledge for this response.  

[Diego Alejandro Garza]

Talking about Fair Trade we can see two different perspectives.

We can say that Fair Trade is a great way to let know all consumers how the product they are buying is made and by who is it made so they can really think about society and try to make a better place. One way of starting a change in the world can be avoiding child exploitation just by buying products approved by Fair Trade Organizations. 

I think it is really great that people think not only for themselves and try to make a better world but what about this kids that really need this job for surviving? Don't they need money to eat? I feel like if there is no need for this people to work they can just choose not to work. I know that we have a lot more privileges than them but there should be another direct ways we can help those kids. Not everyone is going to change their mind about just buying fair trade products and the difference we are making is not going to be significant.

There is people that really need cheap products and there is people that really don't care about paying certain amount of money to buy what they want or need. Don't you guys think that a better way to help this kids is in a direct way donating money or food via institutions instead of just buying fair trade products?

 

On Monday, March 5, 2012 10:14:20 PM UTC-5, Papa Mbengue wrote:

[Chelsey Miller]

I am responding to question 1. 

I agree that Natik did a good job discussing the benefits of fair trade.  Fair trade gives the farmers and workers a living wage for their work, which can sustain them and also create opportunities for social and economic development. Like any system there are some criticisms and issues with fair trade. Take for instance the point of sales.  Though many developing countries are continuing to sale their products on the market most of them continue to be sold on specialized instead of reaching the mainstream distribution channels. One solution suggested to counter this one of the many disadvantages of fair trade is to offer online shopping.  But the problem is that the price will likely go up due to shipping fees and may not be affordable to the average consumer.  The taxes put on exports and imports is another one of the disadvantages of fair trade. Despite the disadvantages of fair trade, it is important to keep in mind that there will always be ways to solve them.

On Tuesday, March 6, 2012 3:59:56 PM UTC-5, Yuan Yuan Lin wrote: