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The Fair Trade Movement in Historical Perspective

Explaining the “In and Against the Market” Predicament



In the 1970s and 1980s, while predominantly faith-based goodwill selling continued to grow, a new tendency also emerged in alternative trade. Born of the divisive politics of the Cold War’s middle years and guided by motivated young activists in so-called “third world groups,” this new approach was more overtly political than goodwill selling, although it shared some traits with the already established alternative trade groups.

While the emergent third world groups of the 1950s and early 1960s were rooted in the Christian humanitarian camp, as the 1960s and 1970s wore on some of these groups—especially those focused on specific countries and causes—began to take on a more political tone.[42] Observing the decolonization process and the Vietnam war, and noting global economic imbalances that contributed to poverty, these third world groups sought ways to concretely express their solidarity with causes and countries they supported.[43] Drawing on the lessons of goodwill sellers, these groups arranged direct-purchase agreements with specific communities in developing countries and began importing their products. The third world groups relied heavily on the opening of world shops as a distribution network for this “solidarity trade”; these shops expanded rapidly, from one in 1969 to over 150 by 1982 in the Netherlands alone.[44] World shops also served as a locus for third world groups to raise awareness about trade inequalities and other political causes.[45]

In the late 1960s, the Dutch group Sugar Cane Action, highly critical of excess beet sugar production in the European Economic Community states, took the pioneering step in alternative trade of beginning to import sugar cane through its own channels under the slogan “By buying cane sugar, you increase the pressure on the governments of the rich countries… to give the poor countries a place in the sun of prosperity.”[46] Given the third world groups’ concerns with structural inequalities in the emerging global trade system, solidarity traders focused on developing direct trade relations with states seen as trying to forge an alternative trade movement outside the Western capitalist system. World shops carried such items as Tanzanian coffee and tea, Algerian orange juice and wine, Mozambican cashews, Cuban rum, and Nicaraguan coffee.[47] In the 1980s, products from the Southern African frontline states were sought for their anti-apartheid associations, as were Central American coffees for their links with revolutionary movements of the era.[48] In the mid 1980s, the U.S. embargo against Sandinista Nicaragua helped spur European solidarity imports of coffee and bananas from that country.[49]

Equal Exchange, founded in Boston in 1986, is a U.S. alternative trade organization (ATO) with firm roots in the solidarity phase. Its mission is:

to build long-term trade partnerships that are economically just and environmentally sound, to foster mutually beneficial relationships between farmers and consumers and to demonstrate, through our success, the contribution of worker co-operatives and Fair Trade to a more equitable, democratic and sustainable world.[50]

Equal Exchange made an overtly political statement with its first import. In 1986, the Reagan Administration had imposed an embargo barring the importation of any goods from Nicaragua, where it was supporting the counterinsurgent Contras against the Sandinista government. Noting a loophole in U.S. law that meant coffee’s origin was defined by the country where it was roasted rather than harvested, Equal Exchange made arrangements with a Dutch ATO, Stichting Ideele Import (SII), to import Nicaraguan coffee.[51] Although under U.S. law the coffee was technically considered Dutch since it had been roasted in the Netherlands, U.S. Customs officials impounded SII’s first shipment to Equal Exchange. The ensuing legal struggle to release the coffee helped Equal Exchange challenge U.S. trade policy while also building demand for the “forbidden fruit” of Café Nica throughout the U.S. world shop network and solidarity circles.[52] Equal Exchange succeeded in its efforts to import the Nicaraguan coffee, and quickly became a leading U.S. ATO; while maintaining its Café Nica line, Equal Exchange also sent staff to several coffee-producing countries to develop relations with additional producer groups. Though not entirely typical, Equal Exchange’s deliberate confrontation with the U.S. government illustrates the political edge of this stage in the development of alternative trade, and highlights its marked differences with conventional traders’ strategies.

The solidarity trade era also saw the emergence of a stronger Southern complement to what had heretofore been a Northern-guided movement. Producer cooperatives began to take an active role in alternative trade and became significant partners in the system.[53] One important cooperative among many to emerge in the solidarity stage was the Union of Indigenous Communities in the Isthmus Region, or UCIRI, which was formed by 17 Mexican indigenous communities in 1983.[54] Living on ancestral lands in mountainous areas of Oaxaca, UCIRI’s member communities had a long history of selling their coffee to intermediaries that exploited their isolation and information asymmetries. During the “green revolution” of the 1980s, as technical advisors from the state coffee board INMECAFE pushed producers to take up agrochemical production that promised higher yields, UCIRI members resisted the pressure to adopt industrial techniques. Visits from Dutch and German solidarity groups had informed UCIRI members of an alternative export market that would allow them to bypass the traditional buyers of their coffee (known as coyotes), INMECAFE, and other unsatisfactory export arrangements they had tried with limited success. A meeting with a European agronomist in the same period prompted UCIRI representatives to visit a leading organic farm in Chiapas to learn how they could apply its biodynamic, high-yield techniques to their own lands. As Simpson and Rapone note, UCIRI’s encounters with these European groups in the early 1980s opened new horizons for the cooperative:

Fair trade organizations not only paid more than the prices established on world commodity markets, but operated through annual contracts and long-term relationships. Their contracts were based on the needs of farmers, coffee processors and consumers in a context of compromise and mutual respect. This was a sharp departure from the price system of the conventional market in which commodity prices changed daily in response to production amounts and weather conditions, while speculators amplified price shifts and brokers tried to drive the best bargain they could from producers.[55]

Aware of these European ATOs willing to trade with them, and armed with the knowledge that their organic coffee would command a premium price, UCIRI began a long campaign to obtain an export permit from INMECAFE, the state coffee board whose governance was heavily comprised of large plantations that coveted the bulk of export quotas.[56] In 1985, UCIRI finally obtained its export permit, sending its first direct exports after the 1986-87 harvest to Simon Lévelt, a specialty coffee and tea importer in the Netherlands that practices a fair trade business model, and to the German ATO, GEPA.[57]
Despite their variant orientations, goodwill sellers and solidarity traders had many overlaps that allowed them to work together. Above all, they shared a concern for the plight of disadvantaged producers in developing countries, a commitment to their capacity to help these producers through direct-purchase schemes, and “an ideological focus on paying producers ‘as much as possible’ rather than ‘as little as possible’.”[58] Goodwill sellers’ imports found a natural place beside solidarity goods on world shop shelves as the network expanded. The doctrine of liberation theology and the political polarization of the 1970s and 1980s also contributed to some of the overlaps between goodwill and solidarity trading, although the marketing message conveyed to solidarity shoppers was unabashedly political, with the underlying claim being that to purchase the product was an overt act of solidarity with and support for the producers.[59] As Durwael has noted, during the solidarity stage there was a shift in the emphasis of the message facing the consumer, from producer well-being to a larger political meta-narrative:

The supporting function of the sale of products was clearly pushed into the background by information and instruction. The product was a symbol and a way of putting the political message across. If you did not take the leaflet, you should not buy the product either.[60]

Another key development was that solidarity and goodwill traders both realized that food products were another viable import in addition to handicrafts, especially since agriculture and artisanal work constituted the two largest sources of employment in many rural communities in the developing world.[61] The solidarity group Sugar Cane Action was the first to import sugar for sale through the world shop network of the late 1960s, and the goodwill-oriented SOS was the first to import coffee through alternative trade channels, from Guatemala in 1973.[62] While agricultural goods showed much future potential, the quality of the food products sold in the solidarity trade was typically hit or miss. In the words of a Dutchwoman familiar with the era, “I remember my father buying fair trade coffee but it was so bad that we would never serve it to company.”[63]

The solidarity trade’s major shortcoming sprung from what might be said to have made it most successful on its own terms: the bundling of strong political messages with erratic merchandise meant that, aside from a supportive and solidaristic segment of the market, these goods often lacked broader appeal. As Tallontire explains, “While solidarity trading did reach a committed band of alternative consumers, it had some internal limitations, and as the international political climate changed, the solidarity message became less tenable.”[64] By the late 1980s, solidarity trade, while not abandoned, was quickly being subsumed by new tendencies in alternative trade.

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Masters Thesis for:
New School, Graduate Program in International Affairs
May 2007
Advisor: Professor Stephen Collier
Reader: Professor David Gold

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