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Expanding Fair Trade to Garment Production in Ciudad Sandino, Nicaragua

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Expanding Fair Trade to Garment Production in Ciudad Sandino, Nicaragua Expanding Fair Trade to Garment Production in Ciudad Sandino, Nicaragua A thesis presented to the faculty of the Center for International Studies of Ohio University In partial fulfillment of the requirements for the degree Master of Arts Linda J. Ellersick March 2009 © 2009 Linda J. Ellersick. All Rights Reserved. 2 This thesis titled Expanding Fair Trade to Garment Production in Ciudad Sandino, Nicaragua by LINDA J. ELLERSICK has been approved for the Center for International Studies by Yeong-Hyun Kim Associate Professor of Geography Betsy J. Partyka Director, Latin American Studies Daniel Weiner Executive Director, Center for International Studies 3 ABSTRACT ELLERSICK, LINDA J., M.A., March 2009, Latin American Studies Expanding Fair Trade to Garment Production in Ciudad Sandino, Nicaragua (120 pp.) Director of Thesis: Yeong-Hyun Kim Despite challenges the movement is having and may continue to have, fair trade has proved itself a viable grassroots alternative to neoliberal free trade for farmers in the Global South and has gained legitimacy in both literature and consumer markets. Producers and consumers are becoming increasingly aware of fair trade as an economic and social alternative. While there exist set standards for fair trade agricultural products, no standards yet exist for fair trade garment manufacturing. Through a case study of COMAMNUVI (Cooperativa Maquiladora Mujeres de Nueva Vida) in Ciudad Sandino, Nicaragua, this research analyzes the application of fair trade principles to the garment production industry. Claiming to be the first garment production cooperative in the world to operate within both the fair trade and free trade markets, COMAMNUVI has contributed an unprecedented prototype of how fair trade garment production may extend to other communities. However, the cooperative has yet to be considered a success and has encountered many problems that challenge the very goal they set out to achieve. Approved: _____________________________________________________________ Yeong-Hyun Kim Associate Professor of Geography 4 To the workers of COMAMNUVI and others venturing to make positive changes 5 ACKNOWLEDGMENTS A special thank you to my parents, Steven and Tricia, and my dearly loved Tony for your unconditional support, love, and humor while undergoing this project in the US and abroad. To my committee chair, Dr. Yeong-Hyun Kim, for her guidance and being a great coach. To my committee members, Dr. Brad Jokisch, and Dr. Amado Lascar, for their encouragement and immense willingness to help at every turn. To Tatiana Arguello and her family in Nicaragua, which without their generous hospitality, this research venture would not have been possible. To all other Ohio University faculty who contributed their guidance and support. To Beth Clodfelter and Leah Vincent whose vast assistance and patience helped me to hone my writing and editing abilities. To my friends and family here in the US and the new friends I met while in Nicaragua for showing true interest in my work. To Pavel and Mitya for uplifting me while I was away from home and welcoming me back so warmly and enthusiastically. 6 TABLE OF CONTENTS Page Abstract ............................................................................................................................... 3 Dedication ........................................................................................................................... 4 Acknowledgments............................................................................................................... 5 List of Tables ...................................................................................................................... 9 List of Figures ................................................................................................................... 10 Chapter 1: Fair Trade as an Alternative to Free Trade .................................................... 11 Emergence and rise of fair trade .............................................................................. 13 Fair trade organizations ........................................................................................... 16 Fair trade in Latin America ...................................................................................... 19 Challenges and drawbacks of fair trade ................................................................... 21 Conclusion ................................................................................................................ 23 Chapter 2: Garments and Handicrafts in Fair Trade ........................................................ 24 Typical fair trade channels ....................................................................................... 24 Fair trade garment production ................................................................................. 26 Research methods ..................................................................................................... 30 Conclusion ................................................................................................................ 33 Chapter 3: Nicaragua’s Economic Development and Challenges ................................... 35 Nicaragua’s historic economic difficulties ............................................................... 35 Dilemmas of neoliberalism and zonas francas ......................................................... 42 Conclusion ................................................................................................................ 49 7 Chapter 4: COMAMNUVI as a Worker-Owned Fair Trade Organization ..................... 50 A new type of fair trade arises .................................................................................. 51 The Nueva Vida community ...................................................................................... 58 Production operations of COMAMNUVI ................................................................. 60 Workers of COMAMNUVI ........................................................................................ 66 COMAMNUVI as an alternative to other zona francas ............................................ 70 Conclusion ................................................................................................................ 72 Chapter 5: COMAMNUVI’s Marketing to the Global North ......................................... 74 Global understanding ............................................................................................... 74 Global markets and demand for products ................................................................ 75 Conclusion ................................................................................................................ 78 Chapter 6: Impediments to Global Market Expansion .................................................... 80 Difficulties with business principles ......................................................................... 80 Conceptual problems: fair trade and fairer trade ................................................... 84 Support from fair trade organizations ...................................................................... 87 Conclusion ................................................................................................................ 90 Chapter 7: Conclusion...................................................................................................... 92 References ......................................................................................................................... 96 Appendices ...................................................................................................................... 104 Appendix A: FLO Certifiable Fair Trade Products ................................................... 104 Appendix B: Fair Trade Certified Product Samples .................................................. 105 Appendix C: Fair Trade Product Advertising Pamphlet Samples ............................. 108 8 Appendix D: Organizations Partnering with Maggie’s Functional Organics ............ 111 Appendix E: Sample Consent Form .......................................................................... 112 Appendix F: Sample Organizational Flow Chart of COMAMNUVI ........................ 114 Appendix G: Current COMAMNUVI Partners and Positions .................................. 115 Appendix H: COMAMNUVI’s Clients ..................................................................... 116 Appendix I: Fair Trade Cotton Producers .................................................................. 117 Appendix J: Sample Websites on which COMAMNUVI Appears ........................... 119 9 LIST OF TABLES Page Table 1: Comparison of ATOs and Labeling Organizations ..........................................17 Table 2: Nicaragua’s Trade, Debt, and Inflation Indicators Prior to Neoliberal Policy Implementation ...............................................................................................................41 Table 3: Sources of FDI in Nicaragua ............................................................................46 Table 4: Advantages and Disadvantages of Operating in the Free Trade Zone .............56 Table 5: Comparison Between COMAMNUVI and Other Zonas Francas ...................71 10 LIST OF FIGURES Page Figure 1: Map of Nicaragua ............................................................................................31 Figure 2: GNI per capita: Nicaragua 1965-2005 in current USD ..................................36
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