Fair Trade and the World’s Poor

Fair Trade and the World’s Poor

Rigged Rules and Double Standards: Trade, Globalization, and the Fight Against Poverty

In this article I will review and criticize a work produced by Oxfam International that argues that international trade as currently managed deepens the poverty of developing countries, where the vast majority of the world’s poor reside. The work details the numerous rules imposed by the industrial countries and codified by the World Trade Organization (WTO), as well as by protective tariffs and non-tariff barriers, that prevent “the rising wealth generated by trade” from benefiting the poor. Oxfam’s critique, however, is not confined to the “management” of trade but extends to policies of the International Monetary Fund (IMF), to oppressive working conditions that exist especially in the “low-wage ghettos” of developing countries, and to some of the practices of transnational corporations (TNCs).

Oxfam articulates views that are broadly representative of other critics on the left who, while accepting the global integration of markets, also seek to limit the rule of capital and to govern global trade and finance in ways that will ultimately compel a partial redistribution of the world’s wealth to the poor. Yet, I will argue, it is doubtful that “fair trade” can even begin to realize this vision. Similarly, Oxfam and others imply a commonality of interests among the poor and among the developing countries, but these countries are caught in the nets of the world market, subject to the competitive forces it spawns. Commonality of interests will always be transient in nature.

Basically, Oxfam lacks a realistic conception of the competitive forces that drive the world market-forces that place a premium on efficiency, technology, and low costs. It views “The vast potential of trade . . . as a force for economic growth, human development, and shared prosperity.” This potential, however, cannot be realized, “not because trade is inherently opposed to the interests of the poor, but because it is managed in a way that concentrates wealth and undermines freedom.” International trade is indeed “managed” by a combination of commercial and financial institutions and TNCs. But “management” implies a degree of control that those agents do not possess. Oxfam’s conception of the market parallels Amartya Sen’s (he is the honorary president of Oxfam and fully endorses its work). In Development as Freedom, Sen writes that problems attributed to the market mechanism arise “not from the existence of the market per se” but from such factors as ...