Expanding Asian Domestic Markets: Creating Consumer Awareness December 15th, 16.45 – 19.00 Moderator Chuck Bell, Consumers Union, USA Speakers - Antoine Bouet, International Food Policy Research Institute - Indrani Thurisingham, Federation of Malaysian Consumers Associations - Phoenix Leung,

Opening remarks from the moderator What are appropriate national policies we can advocate for, to expand domestic markets in Asia for goods? In Europe, over 50% of consumers are aware of fair trade products. How can awareness be raised in Asia?

Contribution: Antoine Bouet : - Is international trade fair? o Regarding access to Asian agricultural markets, the traditional view of protection among world exports, is that developing countries’ exports (agriculture/textiles) are more taxed. It is thought that trade liberalization is development-friendly. But there are an abundance of preferential trade schemes. o Referring to 2004 EU trade policy figures (from UN statistics) the EU does not tax all with the same duty. Likewise for the US. o To measure the extent of trade preferences, a methodology was used without access to one overall database since no such one exists, but a “MacMap” (Market Access Map1) was created, showing the different preferential bilateral and group arrangements existing between countries globally. In measuring the access to foreign markets, the average duty on global exports ranged from 0.3% to 26.7%, while the average duty on agricultural exports ranged from 0.3% to 87%. Viewing the results on a chart one could find no systematic discrimination against any one group of countries. o Rather, preferences were often just a compensation (for disadvantage in the global market). - Role of Asia in unfair agricultural trade: o Applied duty is high in Asia and Africa - global high: 8% - agricultural high: 24% o World protection is unfair. There is a concentration of protection on meat, dairy, sugar, etc. – areas in which developing countries should have a comparative advantage – and these are partially compensated by preferential schemes. With SPS (Sanitary and Phyto-Sanitary) and technical barriers, Asian countries are responsible for very high agricultural tariffs, and small preferences. - What is needed is to help development and allow countries to have a more proactive role?

1 See more about this at: http://www.cepii.fr/anglaisgraph/bdd/macmap.htm

Contribution: Indrani Thurisingham: On Fair Trade and Equity among farmers and consumers in Asia: - Farming situation in Asia: farming tends to be chemical-based, mono-crop, mass- commercialized, mechanized and unsustainable. - International trade agreements tend to open markets and provide less support to farmers. - Farmer issues: o Cartels and middlemen take advantage of farmers especially small scale ones, due to lack of access to capital. o Middlemen control price and sell high. They tend to bind farmers in debt. 75% of Thai farmers are in debt. o Farmers cost of production goes up (especially due to the cost of pesticides). - Who are consumers? o End users of products and services. o Small scale farmers, who must now pay for that previously was free (water, education, health services). Especially in Asia, most farming is irrigated, but now farmers must pay for water. o Consumers not getting value for money o There are issues of food quality and safety – risk of disease, chemical contamination and new and risky technologies (e.g., GM foods). o Consumers are demanding: food that is affordable, in sufficient supply and safe. - The solution to these problems faced by small-scale farmers: o a mechanism linking farmers while cutting out the middlemen; building awareness (of the concept of fair trade and the associated mechanisms and institutions). - Linkages: o Agricultural cooperatives: e.g., Teikei systems in Japan: Problems: poor management, lack of member participation; lack of savings; lack of appropriate policies & legislation for cooperatives; volatile market, limited market info available to farmers. o Fair trade shops: Problems: they are new; they are few (mostly in the UK) and it is hard to get certification and approval. o Farmer markets: Good points: offer a good choice to buyers and they are cheaper for consumers. - Consumer demand: consumers want cheaper but more quality and safely, and they are willing to pay a premium for safe and healthy food. - The way forward: o Organic farming: healthy. o Eco-labelling: labelling considers supply chain and enhances credible and accountable information about the produce of farmers; however it is at an infant stage in Asia due to costs o Good agricultural practices: a code of practice promotes environmental sustainability - Existing Initiatives: o Green Net Thailand: produces and markets organic produce. o Teikei (Japan): a rice farmers’ cooperative. o Pasar Tam (Farmers’ market): Malaysia. - All of these initiatives are at early stages, so fair trade is still expensive and needs government support. Trade still super-cedes agriculture so efforts must be made towards increasing the pace of their convergence.

Contribution: Phoenix Leung: - Hong Kong is a difficult place to establish fair trade – it is a busy, competitive place. The first task for fair trade is to make consumers aware of what fair trade is. Currently in Hong Kong fair trade products are rare in the market, and have proven difficult to sustain – there have been several cases of ventures starting up with fair trade products but not being able to stay in business. The highly monopolized distribution chains in Hong Kong also make it difficult for fair trade products to compete. - Making Trade Fair – This has been a campaign that Oxfam Hong Kong has been engaged in since 2002. The purpose is to show the public how low commodity prices hurt farmers (particularly in developing countries), how subsidies in developed countries contribute to these farmers’ poor situation, and what the public can do. - In Hong Kong, Oxfam has made an effort to “localize” the Make Trade Fair campaign. Actually, coffee in Hong Kong is rather “new”, unlike in other parts of the world – it was not a main beverage and only in the 1990’s became a trend, when shops like Starbucks began opening up in Hong Kong. People were unaware of how low coffee prices affected farmers. Though advocacy is at a baby stage in Hong Kong, it remains an important task in the Make Trade Fair campaign. - Hence, one of the aims of Oxfam Hong Kong has been to teach about fair trade by selling coffee and developing the fair trade market. It may not make a huge dent in society but could affect a significant group, which could take a next step in spreading the idea of fair trade. For instance in 2002 Oxfam conducted a campaign for 6 months. It was supported by Oxfam International with research, media attention, and sharing of market experiences. Oxfam Hong Kong targeted young people in universities, cafes, and so on; and the campaign was well-received overall. - Now there are Starbucks offering fair trade coffee, churches, new fair trade organizations, a fair trade labelling organization…to some degree, Oxfam Hong Kong’s earlier fair trade coffee campaign may be said to have had lasting effects. - At the moment, however, government lobbying regarding fair trade is still not in Oxfam’s plans. It may come further along in Oxfam’s fair trade campaigning efforts.

Notes by Doris Lee