Fair Trade
by Vince Caruana
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| About half the population in Central America lives in rural areas and relies on agriculture for its livelihood. |
Free trade does not always live up to its promises of economic development for all, as the 15 million small farmers in Mexico who have lost significant income under a free trade agreement between Mexico, the US and Canada can testify.
The Central America Free Trade Agreement (Cafta) currently being negotiated between the United States and Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua can also prove to be disastrous for small farmers and businesses who have absolutely no control on the negotiations which are taking place in secret (again on the famous pretext of foreign policy and national security) and on a rushed schedule. In whose interest is this agreement being conducted? What lies beyond the rhetoric of free trade agreements encouraging economic development and promoting poverty reduction?
The answer to the first question seems to be that the agreement is being conducted to open up opportunities for US businesses. The answer to the second question seems to be that what is good for business is not always good for all.
There is a clear danger that Cafta will restrict Central American countries' ability to use trade to serve the needs of the majority of poor people in the region. This is because the competitors are ill matched and therefore having a level playing field does not solve anything. A contest on level ground between a giraffe and an antelope competing for the best fruit at the top of a tree is still unfair. The challenge is therefore to create a Cafta where the F stands for fair and not for free.
The first step towards fairness is transparency. Only through public information and slower timelines can civil society organisations provide informed inputs to the process.
The second step towards fairness is a recognition of the reality of Central Americans. About half the population in Central America lives in rural areas and relies on agriculture for its livelihood while one in four suffer from hunger. Most lack access to credit, new technologies, and adequate public infrastructure to expand their production and lower their costs. In such a context what would be the result of duty-free access to Central American markets for all US agricultural products?
The fear is that without measures to protect the region's agriculture, particularly key products that are essential to the food security of these countries, many small producers who account for much of national food production could be wiped out.
Fair Trade is a reminder that one cannot impose a homogenous economic culture upon a variety of people, cultures and world-views without disastrous consequences for vulnerable people and the environment. Fair Trade values diversity, whether social, cultural or bio.