I was at the University of Paisley last week debating the subject of free trade. One of the other speakers was Martin Meteyard, Chair of CafeDirect plc, a corporation which sells ‘fair trade’ coffee. He had brought with him a packet of Mexican ‘fair trade’ coffee which he proudly showed to the audience.
I was a bit surprised that he had chosen Mexican coffee. After all, compared with other coffee producers, Mexico is a rich country. Granted, Mexico’s wealth is not at British levels. But with a per capita GDP of $8900, the country is considerably better off that other coffee producers like Kenya ($1100), Uganda ($1200) and Tanzania ($600).
Mexico also has much better trading terms than other coffee producers. It is part of the North American Free Trade Area and has a free-trade agreement with the European Free Trade Area (and thus the EU). Industry accounts for 36% of the economy and services 69%. Only 5% of Mexico’s economy is agricultural.
The fundamental problem in the coffee industry worldwide is that there is too much production. This means that the price is low. What is needed is for people to exit the market, and in Mexico it is easier than anywhere else to turn your back on coffee – after all, agriculture accounts for only 5% of the economy. (Yet, according to CafeDirect, 25% of ‘fair trade’ coffee comes from Mexico.) Is CafeDirect really engaging in a great moral act by helping Mexicans stay in the market?
Paying a few pence extra for a cup of ‘fair trade’ Mexican coffee might make you feel like a better person. Unfortunately, how you feel does not make the world a better place.
When you are debating someone who mentions “fair trade”, it carries with it the implication that “free trade” is unfair. I point out that only free trade can be fair, and that anything less than free trade is unfair. I might ask them if they think every human exchange should be subject to some form of jury arbitration to determine its inherent fairness, despite the inconvenient fact that the exchanges were made voluntarily. You might consider telling them that they paid too little for their house, and how would they like the price to be legally adjusted so that it was fairer to the seller. But I keep forgetting that we are dealing with idiots.
In the free market, people don’t buy CafeDirect or FairTrade [sic] or OxfamMuck because it’s vile. And if you think that’s bad, you should try their tea.
The only places I’ve ever seen these products by the kettle are all taxpayer-funded: council offices, statutory-sector voluntary organisations, housing associations and so on.
Like the Guardian (for its jobs section), I think that FairTrade would go out of business without privileged access to state funds.
Ian
I’m back in my office after a meeting in the offices of a local authority (meeting planners to learn their views of a planning application). Can you guess which brand of coffee they provided? You get a gold star if you guessed CafeDirect.
I often have to deal with people in the public sector and you’re right, that stuff is most often be found there. In fact I’ve never seen a tin of it anywhere else.
Fair trade is if a product I want is offered at a price I am prepared to pay for it.
It should be clarified that coffe producers in Mexico, at least those in these programs belong for the most part to indigenous groups in rural or otherwise poor communities, not representative of the average cited GDP.
On the other hand, would you rather have these people migrating illegaly to the US?
Damn if you do, damned if you don’t!
I don’t have any problem with Mexicans moving to work in the US – or Britain (where I live). I’m in favour of the globalization of labour.
Too much coffee production?
Nonsense, good Sir.
The problem is the world isn’t drinking enough Coffee.
You should, of course be, drinking your free trade coffee out of one of Global Growth Org’s Free Traders mugs tastefully adorned with Richard Cobden’s image.
Available here.
So you have to move to a different country to globalize labor?
I’m an immigrant to the US and what I would like to see is not less immigration, but better controlled immigration. We have the worst possible system – we know lots of illegals come into the US and then we haphazardly and irregularly enforce the immigration laws. The hospital my brother practices in (a border state) is having huge monetary problems because it has to provide care for everyone, but not everyone (illegals and people who cross the border and go back) pay. Ok, I’m not sure what I’m trying to say except that our immigration policy regarding Mexico is pretty screwed up in a way that hurts citizens and illegals, both.
Also, why is that people are always upset at the more rich country for ‘not doing more’ when they should be upset at the leaders and the political class of the less rich country for doing such a poor job.
Your attitude about globalization of labor might be commendable but I doubt that in North America is a widely shared view. At least not as much as it used to be.
Seen under the geographical and historical context of US/Mexico relations, particularly as they relate to the current illegal immigration problem, then you might realize that programs like that of CafeDirect could indeed represent a valuable moral act.
By “jump-starting” small community businesses in Mexico or in any other under developed countries, the world is becoming a better place to live for all those families whose livelihood depends on it, even if those who consume their products don’t feel better persons!
I agree that the US immigration model is deeply flawed.
The cause of this problem is deeply rooted in the peculiar and intricate US/Mexico interactions during the last couple of centuries. I’m one of those that thinks that the rich should do more!
When the American leaders of the 1800’s embarked in their largest territorial expansion of their history, they never anticipated what would be the situation of the 21st. century.
So, when it comes to the current US immigration problem, to paraphrase a popular saying, “it comes with the territory”.
Coffee and “Professed Ethics” are complimentary goods that require a somewhat knowledgeable production base. There is a producer sufficient to achieve credible product and a market, big enough for CafeDirect that is happily far enough away from me. Never heard of CafeDirect before now.
The world takes all kinds, but 80% are taking with other things on their minds, so it kinda doesn’t matter.
Aren’t “Fair Trade” goods, such as coffee, chocolate, etc., essentially charitable contributions? When I buy these products, I’m paying slightly more than I would, and in return, have a vaguely warm and fuzzy feeling that the growers are getting more money than they normally would have.
In other words, big whoop. They are freely charging more and I am freely paying more, because I want to.
The problems in America that come from immigration are two-fold. 1) We try too hard to control it. People should be able to go wherever they want, providing they are not trespassing on private property. 2) Our government is giving stuff away. The rights of a citizen are to receive the benefits they pay for. If you are not a citizen, you get nothing. If you pay into the system, you get the benefits. If the government stopped giving away stuff (to citizens included) then there would be no issue. There would still be the question of jobs, but that is always an issue that can be worked out among the populace.
The rich have no responsibility other than that which they place upon themselves. All of humanity should be responsible for making sure that at no time do their actions forcibly take freedom or property from another human. That is all.
If your commentary is an allusion to my previous post, then it means you didn’t get the irony of my commentary. Please review the history of the territorial expansion of the US during the 1800s and then reconsider your statement about “forcibly taking property from other humans”.