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LATIN AMERICA-EU: Fair Trade Fills Supermarket Shelves

Julio Godoy

VIENNA, May 11 2006 (IPS) - Bananas from Ecuador, chocolate from Bolivia, coffee from Guatemala and Mexico, sugar from Nicaragua: agricultural products imported from Latin America are increasingly visible on supermarket shelves in the Austrian capital, where the heads of state and government of Europe and Latin America will meet on Friday.

This would appear at first to be a perfectly normal occurrence, as Europe has a long history of importing food products from Latin America. The novelty lies in produce accredited as organic and bearing a “Fair Trade” label.

More than 55,000 European supermarkets already sell goods with this label. Last year the annual sales volume of these products was over 616 million euros (nearly 800 million dollars), 49 percent more than in 2004.

In Austria alone, between 2004 and 2005 there was an increase of 63 percent in the sales of “Fair Trade” items, so labelled because they are supposed to come from a production chain that respects the environment, workers’ salaries and labour rights, as part of a process that promotes social development.

The Fairtrade Austria organisation announced the impressive 2005 results on the eve of the EU-Latin America/Caribbean summit.

Although the main business to be dealt with at the summit is the consolidation of trade relations and integration between the two regions, as well as increasing cooperation and development aid, official negotiators have chosen to ignore the potential benefits of fair trade for both sides.

Instead, the mechanism to be debated at the meeting is that of free trade associations, modelled on agreements such as the one that has linked Canada, Mexico and the United States since 1994.

The North American Free Trade Agreement (NAFTA) is particularly criticised by activists who complain that it hampers fair trade, and allows private companies to sue governments that pass laws in defence of the environment and workers’ rights.

“Several factors have contributed to the rise of fair trade in Europe, including growing ethical concerns among consumers, who demand goods produced in ways that respect the human rights of workers in countries of the South, as well as the environment,” Georg Gruber, the director of Fairtrade Austria, told IPS.

“We have been able to expand our traditional product range from bananas, coffee and chocolate to include other products, such as flowers and citrus fruits,” he added.

Fairtrade Austria belongs to the Fairtrade Labelling Organisations International (FLO) network, which operates in 50 countries, especially in Europe, and includes associations in Australia, Canada, Mexico, New Zealand and the United States.

FLO arose from associations created in the Netherlands in the 1950s. The German branch was founded in 1992, and the Austrian in 1993.

The growth in fair trade of some products in Europe has been so spectacular that it is considered to be one of the most dynamic sectors in the foodstuffs market, which does not generally grow as demand for food is inelastic.

In Switzerland, 47 percent of bananas, 28 percent of flowers and nine percent of the sugar sold are Fair Trade labelled products. In Britain, the Fair Trade label accounts for five percent of the tea and 20 percent of ground coffee.

According to Franz Kuebler, the president of the Austrian branch of Caritas, a humanitarian organisation, “the struggle against poverty in developing countries is closely linked to the behaviour of consumers in industrialised countries.”

“Thanks to institutions like Fairtrade, every one of us can and should contribute to giving rural and urban workers in Latin America, Africa and Asia the chance for a better future,” he said.

FLO sells products from more than 550 cooperatives in developing countries, representing more than five million producers. In order to guarantee that these goods are, in fact, “fair” products, the organisation audits its trade partners once a year to check that they meet its standards.

“We have two basic kinds of standards,” Veronika Polster, also of Fairtrade Austria, told IPS. “The first apply to cooperatives, which must have democratic ways for their members to participate, and the second to private companies, which must commit to paying their workers decent wages, respect their unionisation rights, and where applicable provide them with decent housing,” she said.

Private companies and cooperatives that take part in the fair trade programme must also make commitments not to employ children, to respect local minimum wage legislation and to fulfil basic environmental protection practices and health and safety standards for their workers.

“Since Fairtrade considers itself to be a development aid organisation, producers must also be committed to continuously improving their working conditions, and the quality and the environmental sustainability of the goods they export,” Polster said.

In exchange, Fairtrade pays above market prices, and bonuses consisting of investments in development projects, such as schools, clinics, drinking water systems and infrastructure.