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Speech
Hilary Benn, Secretary of State for International Development, Fairtrade Foundation Campaign Conference, Leeds, England
14 October 2006
I am very sorry I can’t be with you in Leeds today but did want to send this message in support of your work on how Fairtrade changes people’s lives.
Making trade both freer and fairer is central to helping poor countries trade their way out of poverty. We need a comprehensive, ambitious agreement in the world trade talks, that at present are shamefully stalled. Economic Partnership Agreements that boost development as will determine trade terms between the European Union and African, Caribbean and Pacific countries.
And we need to think about how we as consumers can make a difference.
We know that increasing trade is essential to achieve the economic growth needed to meet the Millennium Development Goals (MDGs) and lift millions out of poverty. At the World Trade Organisation (WTO) talks in Hong Kong last December, I heard Trade minister after trade minister from developing countries emphasise this point. Ghana’s Trade minister said:
“It is no longer a matter of public debate anywhere in the world that trade is indeed the most powerful engine of growth, particularly for poor countries.”
Take Malawi for example. Malawi has a total government budget of US$ 730 million. Donors provide a further $500 million. This is nowhere near enough money if Malawi is to deliver the better health and education its citizens deserve and which they as a government want to provide.
Whilst donors can and no doubt will increase aid budgets, Malawi needs economic growth and it needs the greater trading opportunities fundamental to that economic growth if it is to lift more of its citizens out of poverty. Fairer international trade rules are essential to enable countries like Malawi to see more of the gains from trade.
There is quite simply no substitute for the potential gains a world trade round could bring developing countries, especially in improved market access to developed countries, in reduced western farm subsidies, and in increasing South-South trade. We want an outcome which unlocks the development potential of trade, with developing countries being given the time and the space to decide liberalisation in line with their own national development plans.
The UK Government’s number one trade priority is therefore the restarting of these talks.
But the Economic Partnership Agreements that the European Union (EU) is currently negotiating with African, Caribbean and Pacific countries – known as the ACP - could also make a significant contribution to reducing poverty.
The Make Poverty History movement rightly highlighted the economic and social dislocation to which poorly designed and over-speedy trade liberalisation can lead. As a Government we have made clear we will not force trade liberalisation on developing countries either through trade negotiations or aid conditionality.
But we must also be clear that trade reform that is carried out by developing countries themselves under the right conditions, and that is well integrated with national development plans, can bring real benefits and growth for the world’s poor.
The framework for Economic Partnership Agreements agreed by EU and ACP countries clearly states that they will focus on the objectives of reducing poverty, sustainable development, and gradual integration of the ACP into the world economy.
What does this mean for the countries themselves? Agreements in the different regions of the ACP are likely to take different shapes and forms, as countries have varied interests and national development plans look at different things.
For small countries in sub-Saharan Africa, EPAs could bring improved regional trading links with their neighbours and, as a result, larger markets to sell their produce in. They could also benefit from improvements to what are known as Rules of Origin, which determine where in the world poor country producers are allowed to source the things that they put into the products that they are already good at exporting to the EU.
For countries in the Caribbean, there are strong interests in having access to the service markets of the EU, which have the potential to increase incomes of people employed in service sectors. And we are pushing for all ACP countries to be given 100% duty-free and quota access to EU markets.
Fairtrade
While changing international trade rules is essential, it can seem very far removed from our everyday lives and well beyond our own individual influence. This is where the decisions we make as consumers can make such an important difference.
Fairtrade is a small but very important part of the international trading system. It helps build more equitable trading partnerships between North and South, secures the rights for, and offers better prices to, disadvantaged southern producers.
The UK government itself is a strong supporter of Fairtrade products. Many government departments, not just DFID, use fair-trade tea and coffee. And DFID has given over nearly £1.5 million to the Fairtrade Foundation to support its work.
Another example of our support is to Divine chocolate. The Kuapa Kokoo cooperative cocoa growers in Ghana own a stake in the Day Chocolate Company that makes and sells Divine chocolate. It means that the farmers can help make the decisions about how Divine is produced and sold. As shareholders, the farmers also receive a share of the profits from the sale of Divine.
The Fairtrade mark has been remarkably successful in both raising awareness of the situation of farmers in developing countries and delivering tangible benefits to communities. Fairtrade is estimated to be benefiting some 1 million producers worldwide. 5 million people in total, if we include dependants. This an achievement to be really proud of. Buying Fair Trade products has been established as a very visible way consumers can, through the fair trade premium, contribute directly to development.
This very success, however, presents both business and the development community with a challenge: How can we enable the much larger numbers of other poor people - the hundreds of millions not involved in Fairtrade initiatives who depend on agriculture for their livelihoods - to benefit from trade? How can we mainstream more equitable trading relations between poor producers and traders and retailers on a scale that will have an impact on global poverty as a whole?
The Fair Trade movement can play an important role in meeting this challenge. But it will need look beyond its traditional focus towards the wider development task we all share.
In part the challenge is about business and retailers developing supply chains that are fairer across the board, rather than simply relying on a minority of Fair Trade products to attempt to satisfy corporate social responsibilities. Clearly the Fair Trade movement can and should be helping to think through practical approaches to doing this. How do we help make this happen on a large scale?
Linked to this, how can we help . Here again the Fair Trade movement can play a positive role because of its track record in raising consumer awareness. Across Britain, Europe and the world, we need to build consumer support and demand for changes that will enable larger numbers of farmers and their families to benefit from the opportunities that trade can bring.
As a politician, I can assure you that Governments and businesses alike have one thing in common: we are very interested in what the customer demands. Fairtrade is such a powerful idea because it puts power in the hands of individuals. Individuals buying from people they’ve never met but knowing they’ll get a fair deal for the trade. Let’s use that power to enable more people to change their lives.
Thank you for you time, and I hope you have a great conference.
