The fundamental interconnectedness of all things

The core idea behind Free Trade is that unrestricted capitalist market forces can be trusted to produce the lowest prices for consumers by allowing bulk buyers and sellers to negotiate an agreed price subject to international competition for products.  The core idea behind Fair Trade is the notion that the free market can not be trusted to set a socially just price for goods and services.  As a result, buyers voluntarily agree to buy a product at a higher price than that set by the market in order to provide something extra for the primary producers such that they can lead a less uncomfortable life, expand their business venture or invest in their communities through the construction of schools, wells, hospitals and other social institutions and infrastructure.

The integration and liberalisation of global economic markets, known now as “globalisation”, really took off in the 1990s as worldwide communication and international freight became cheap enough to allow a coffee plantation owner in Kenya to negotiate the sale of his beans to a roaster in England for their sale in a supermarket in Sydney without having to wait for months for surface based mail to carry the contracts from one continent to another.  One of the long standing issues surrounding globalisation is whether the example Kenyan coffee farmer has enough economic clout to negotiate a fair price for his coffee with the roaster/distributor.

Anti-globalisation protests in the 1990s and 2000s have often been protests against economic powers such as America and their perceived oppression of the world’s poor.  Companies which represent the pinnacle of American corporate (and cultural) dominance such as Coca-Cola and Nike rely on cheap third world labour and products to keep costs down while charging a premium for their products.  How can it be justifiable for primary producers to live in squalor while the companies selling the products record massive profits?  It’s the age old class struggle writ large.  Instead of the ruling economic class living off the backs of the working class, entire first world nations are living off the collective work of third world nations with poor environmental and labour standards.

Globalisation makes Fair Trade necessary but it also makes Fair Trade possible.  Liberalised global trade makes third world countries accessible to first world markets and companies.  The disparity in Purchasing Power, though, means that the first world nations get an exceptionally good deal at the expense of those in the third world.  A small increase in price may only make a proportionally small difference to the end consumer in the first world but for the primary producer in a nation like Uganda or the Domenican Republic, the extra money can represent a significant increase in income.  This money can either be redistributed as income via the Fair Trade co-operative they belong to or it can be invested in either the co-op or the town to provide extra equipment or town infrastructure such as a well or even a school.

Ralph Nader has criticised the North American Free Trade Agreement of pulling everyone down to the lowest level of environmental regulation and labour standards rather than working to pull everyone up to a higher level which safeguards the rights of workers and stops the land being poisoned (thus having knock-on effects for industries like fishing and agriculture). Bodies like the International Labour Organisation and treaties like the Kyoto Protocol and various UN documents are not as attractive to trade-hungry governments as the General Agreement on Trade and Tariffs and the World Trade Organisation. There needs to be a process whereby environmental and labour standards are protected in trade agreements rather than weakened in an attempt to bring about a bit of extra profit.

Trade affects more than just dollar figures on balance sheets. The environmental integrity of a nation is weakened when diseased animals and plants find their way in via loopholes in trade agreements. Banana diseases from Indonesia, apple blight from New Zealand and Equine Influenza are all problems Australia has to consider when negotiating a trade agreement. The standard of living of a nation’s citizens can be adversely affected if its government trades away measures such as the minimum wage and other worker rights.

There is a need for “social globalisation”, that is, the spread of democracy, civil rights, the protection and valuation of individual cultures if we are to fully recognise the economic benefitsof globalisation. Bodies such as the UN, EU, APEC, etc. can deal with issues outside of the military and economics and look at how they can bring about a socially just world where globalisation brings new opportunities for world peace through economic and cultural interaction rather than just new opportunities for exploiting lax regulations in developing countries.

What we’re seeing instead is the globalisation of class division and resentment for the Western world (particularly the US). What we should be seeing is the globalisation of social democratic capitalism. Liberalised trade and economics are being introduced to countries which do not have liberal politics. The well off in the developing world get rich by selling the fruits of poorly-paid labour to foreign companies which make an even larger profit by taking advantage of purchasing power in the first world. Workers don’t own the means of production or distribution, usually, and so, as always, the problem with capitalism is that there aren’t enough capitalists. The rich get richer and the poor get poorer even though more wealth is being generated in the developing economies.

This social globalisation is necessary if real action to combat climate change is to occur. Without an understanding that we’re all in this together, from the wealthiest industrialist to the worker in a macquiladora trying to feed their family, global warming is going to be “someone else’s problem” for everyone around the world. Unless we work towards becoming a global community we can not respond to global problems. The US and Australia’s refusal to ratify the Kyoto Protocol were based on the assumption that it was not in their interest, economically, to do so. It is certainly in the world’s interest to combat climate change and no country exists independently of the global climate. Until countries and their governments can engage in this social globalisation, the UN will continue to be an arena where geographical, economic and religious blocs vote together to protect their own interests. The global interest must come first if we are to survive.