NETWORKING AND ADVOCACY (NAA)

TERM PAPER

MAKE TRADE FAIR CAMPAIGN BY INTERNATIONAL

SUBMITTED TO:

Prof. C. Shambu Prasad

XIMB

SUBMITTED BY:

LG – 5

Dhirendra Pratap Singh (13)

Ranjan Kumar Mishra (36)

Saurabh Pandey (47)

Sohil Bhatt (52)

Sumit Gupta (54)

PGDM – RM – II

XAVIER INSTITUTE OF MANAGEMENT, BHUBANESWAR

PDF created with pdfFactory Pro trial version www.pdffactory.com ABSTRACT

The present study highlights the various hues of Networking and Advocacy as applied to campaigns which mobilizes people on an international scale. Make Trade Fair Campaign by Oxfam International is an attempt in this direction and has several success stories to its credit. It is commendable and surprising at the same time that small activities like, group emails, signed petitions, objects of daily use containing the messages, etc. can really make a difference in making the rules of the game turn in favour of the needy.

When you speak out, people listen !!

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PDF created with pdfFactory Pro trial version www.pdffactory.com CONTENTS

INRODUCTION……………………………………………………….. 1

MAKE TRADE FAIR CAMPAIGN…………………………………... 4

OXFAM IN INDIA……………………………………………………. 6

SOME ISSUES & PERSPECTIVES………………………………….. 8

BOOK REVIEW: ‘ FOR ALL’………………………... 18

REFERENCES

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PDF created with pdfFactory Pro trial version www.pdffactory.com INTRODUCTION

Oxfam International was founded in 1995, formed by the group of like-minded independent non-government organizations, who wanted to work together internationally to achieve greater impact in reducing poverty by their collective efforts. The name “Oxfam” comes from the Oxford Committee for Famine Relief, founded in Britain during the Second World War in 1942.

The thirteen Oxfam organizations are based in: Australia, Belgium, Canada, France, Germany, Great Britain, , Ireland, The Netherlands, New Zealand, Quebec, Spain and the United States. A small Oxfam International secretariat is based in Oxford, UK, and the secretariat runs advocacy offices in Washington DC, New York, Brussels and Geneva.

Oxfam undertakes popular campaigning, alliance building and media work designed to raise awareness among the public of solutions to global poverty, to enable and motivate people to play an active part in the movement for change, and to foster a sense of global citizenship.

The Global Call to Action against Poverty is a worldwide alliance committed to making world leaders live up to their promises, and to making a breakthrough on poverty. Oxfam's Make Trade Fair Campaign is part of this global movement for change - working with others to demand so that trade can be part of the solution to poverty - not part of the problem.

Oxfam Trust in India is part of Oxfam International. Indian Oxfam was established by Oxfam International as India has the development experience and growing economy to solve its own development problems in India as well as other parts of the world. Oxfam Trust will define and articulate Indian perspectives on poverty and development.

Oxfam Trust was set up to support initiatives in advocacy and provide a platform for grassroots Indian NGOs to bring the grassroots issues to the national and international level. This would counterbalance the international development scene, which is currently dominated by Northern NGOs. India has a sophisticated, sensitive and

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PDF created with pdfFactory Pro trial version www.pdffactory.com generous middle class with ample resources for development and advocacy work. Oxfam Trust raises funds in India to have greater flexibility in its programs and fulfill its belief that India can resolve its own development problems.

MAKE TRADE FAIR CAMPAIGN

Trade is one of the most powerful forces linking our lives, and a source of unprecedented wealth. Yet the benefits are not being shared by all: millions of the world's people are being left behind. The Make Trade Fair campaign is a growing international movement, which fights for producers in poor countries to get a fair deal. However, Fair Trade alone cannot address the crisis faced by millions of small-scale farmers and producers whose livelihoods are threatened by low commodity prices and unfair competition from rich countries. This can only be achieved by changing the unfair rules of world trade and certain policy reforms in the domestic level.

Campaign Proposition

n International trade has the potential to eliminate extreme poverty but rigged rules & double standards of trade is widening the gap between rich & poor. Oxfam wants to make trade fair by calling for an end to unfair trade rules

Campaign Objectives

n Market access n Subsidies n Patents n Commodity prices n Pro-poor national and regional trade policies n WTO reform n Companies respect the rights of workers

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HOME WEB PAGE OF WEBSITE: www.maketradefair.com

Several issues which goes against the interests of the producers/ stakeholders world wide is addressed and momentum is made to make an impact. One such issue is of Swiss pharmaceutical giant Novartis launched a legal battle to challenge India’s right to produce cheap, generic versions of medicines, half a million people - including 80,000 Oxfam supporters - voiced their opposition. And it has worked! Millions of people living in poverty depend on affordable medicines made in India. In 2006, Novartis launched a court case against India, which could have made this grim prospect a terrible reality for millions of poor people. India is the ‘ pharmacy of the developing world’. Millions of people living in poverty around the world depend on Indian generic medicines for their survival. Novartis’ legal challenge - mounted to limit competition to its own patented medicines - was a threat to people suffering from cancer, HIV and AIDS, diabetes and other diseases who are too poor to pay for them.

Half a million people around the world supported India’s right to produce affordable medicines. More than 80,000 Oxfam supporters voiced their opposition by sending emails to the CEO of Novartis. The support and attention raised this from

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PDF created with pdfFactory Pro trial version www.pdffactory.com a technical issue, to one of global and moral significance. With this decision to put patients’ rights first, India has set the course for other poor countries to stand firm under pressure from multinational drugs companies. It’s also good news that Novartis has decided not to appeal the case.

Copy of Email sent by Oxfam supporters and million others:

Dear Dr. Daniel Vasella, Novartis CEO, I am concerned that Novartis’s actions in India contradict its stated commitment to “conscientious global citizenship”. In the interest of public health and in order for medicines to be available and affordable for people in India and worldwide, I urge Novartis to:

1. Withdraw the appeal against the Indian Patent Office on the cancer medicine Glivec®/Gleevec®;

2. Withdraw the legal case it is pursuing seeking changes to the Indian Patent Law;

3. Publicly commit to the right of developing countries to provide cheaper medicines in the interests of public health.

I look forward to hearing from you.

OXFAM IN INDIA

Lucky Ali campaigns for Make Trade Fair

A farmer adds her little voice to the Big Noise

A farmers’ mission to seek a trade balance

Rural protestors adopt a global view

Drum and Ravana symbolise evils of Global trade

Hundreds of farmers from Rajasthan, Madhya Pradesh, Uttar Pradesh and Maharashtra travelled hundreds of kilometres to raise slogans and bear placards. They wanted to convince visiting WTO head Pascal Lamy to put their grievances on

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PDF created with pdfFactory Pro trial version www.pdffactory.com farming on the global trade agenda that Mr Lamy was aiming to get India to endorse. Their slogan-raising was accompanied to the tune of the beats of huge drums played by musician and Make Trade Fair envoy Lucky Ali. Together, they made a big noise, which signified the cries of millions of small and marginal producers, left to fend for themselves. The ten-headed puppet of demon king Ravana that they carried with them, symbolised a G-8 nation each. Representing the Make Trade Fair campaign Lucky Ali met Pascal Lamy and urged the WTO to be sensitive towards the plight of the millions of Indian farmers. He said that the "human face" mustn't be lost in these WTO talks and Lamy, as the head of WTO, should take into account the worsening conditions of Indian men and women who have a 7000-year old dependence on agriculture. Responding to Lucky Ali, Lamy said, “Farmers need to negotiate better and strengthen their voices so that trade is fairer. How do you do that? You sit around the table and talk. The WTO is that platform. If you like what you are being offered you take it and if you don't, you reject it."

Why, Kishan Bai, a campaigner, wanted to know, was that she and her farmer-friends, were not inside the seminar hall to add their inputs to a topic that so obviously concerns their livelihood. She said, “From the big players, at the nation-to-nation level, to the small, at the level of marginalised farmers, this campaign seeks to bind all farmers in a network where everyone can make their presence felt.” Kishan Bai was happy that Mr Lamy heard her.

BABY’S DAY OUT WITH FAIR TRADE

On May 12, 2007, Oxfam International’s Make Trade Fair campaign celebrated World Fair Trade Day by engaging in activities focused on promoting the fair trade movement. World Fair Trade Day, which is celebrated on the second Saturday of May, is the world’s annual celebration of fair trade.

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This year’s theme for WFT Day was Kids Need Fair Trade. The condition of children in developing countries presents a gloomy picture. They are deprived of basic amenities such as healthcare, education, clothing and shelter. The root cause of all this is poverty.

SOME ISSUES AND PERSPECTIVES

What is a fair trade?

Millions of families in developing countries don't get a fair share of the wealth created by their own skill and effort and the resources of their land. This is largely because of the way international trade is controlled by a few countries. It's a system which is both unjust, and a major cause of continuing world poverty. Fair Trade aims to give disadvantaged small producers and workers more control over their own lives. It addresses the injustice of insufficient income for a decent living and insufficient market access by guaranteeing that producers receive fair terms of trade and fair prices or wages – however unfair the conventional market is.

Fair Trade is a trading method that attempts to empower producers who are disadvantaged by the exploitation in supply chains of conventional trading system. It seeks to reduce poverty, by trading specifically with poor or marginalized producers in developing countries. Fair Trade is the response of the Northern civil society to manipulations in international trade that adversely affect primary producers in Southern countries. Fair Trade is open to public scrutiny, building long term trade relationships and providing healthy and safe working conditions to producers whenever possible.The fundamental characteristic of Fair Trade is that of partnership and respect – partnership between the producers and buyers i.e. importers, Fair Trade shops, labelling organization and consumers. Fair Trade “humanizes” the trade process – making the producer-consumer chain as short as possible so that consumers become aware of the cultural, identity and conditions in which producers live.

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PDF created with pdfFactory Pro trial version www.pdffactory.com It can be defined as a commercial "partnership that aims at a sustainable development for producers that are either excluded or disadvantaged. It attempts to do this by proposing better trading terms for producers, through education to consumers to increase awareness and by advocacy".

The parameters of Fair Trade include: 1. Paying fair price that includes all input costs and reasonable surplus. 2. Paying a fair wage in the local content 3. Providing healthy and safe working condition 4. Engaging in environmentally sustainable practices. 5. Providing financial and technical assistance to producers wherever possible. 6. Transparency in supply chain.

Implications of Fair Trade

Fair Trade “humanizes” the trade process – making the producer-consumer chain as short as possible so that consumers become aware of the cultural, identity and conditions in which producers live. It · Pays fair price that includes all input costs and reasonable surplus. · Pays a fair wage in the local content. · Provides healthy and safe working condition. · Engage in environmentally sustainable practices. · Provides financial and technical assistance to producers wherever possible. · Transparency in supply chain.

Effects on the Stake Holders

Producers: Producers are guaranteed a fair price and decide themselves how the extra premium paid by Fair Trade buyer should be distributed in the best interests of their communities. Many use it for education, health care, housing, and other social obligations. Long-term, stable trading relationships, which are transparent and honest, support the producer in developing responsible practice for their business and meeting fair trade standards. The sustainability of production and hence of income, and the guaranteed of a long term relationship is a major benefit to the producers and allows them to make some future provisions.

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Consumers: enables consumers to “vote with their money” by providing an independent guarantee that products were produced and traded fairly.

Industry: Fair Trade Certification enables companies to meet growing consumer demand for sustainable products and thereby please their customers, increase profits, and ensure quality supply for years to come. That’s why more and more companies are choosing to participate in Fair Trade every day. Fair Trade harnesses the power of the market to make a positive difference for the world’s most disadvantaged

producers.

The Earth: The Fair Trade Certification system strictly prohibits the use of genetically modified organisms (GMOs), promotes integrated farm management systems that improve soil fertility, and limits the use of harmful chemical pesticides and herbicides. Fair Trade encourages and rewards environmentally sustainable farming practices that protect farmers’ health and preserve valuable ecosystems for future generations.

The FTO Mark: Launched in 2004 at the World Social Forum in Mumbai, India, the FTO Mark identifies registered Fair Trade Organizations worldwide. Over 150 organizations have already registered, including Oxfam, PeopleTree, the Network of European World Shops and Cafédirect. The FTO Mark shows that an organization belongs to the global network of Fair Trade Organizations. It serves as a common voice for solidarity amongst all Fair Trade Organizations in the north and the south.

FTO Mark is a quality mark. It is also a commitment and means standards are being implemented regarding working conditions, wages, child labour and the environment. These standards are verified by self-assessment, mutual reviews and external verification. It demonstrates that an organization's trading activity committed to continual improvement.

The other is issued by FLO (the Fairtrade Labelling Organisation) and is called the Fairtrade Label. It is used to identify Fair Trade certified products. After the successful launch of the Max Havelaar Label in 1988, a number of independent Fair Trade certification bodies were created, however, since 1997 the fairly traded labels

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PDF created with pdfFactory Pro trial version www.pdffactory.com have been united under the umbrella NGO, Fair Trade Labelling Organization International (FLO-I), in a single fair trade market. In 2002, the national Labels of the different countries merged into the international Fair Trade Certification Mark with the USA, Canada & Switzerland, currently swtill retaining their label.

Fair Trade Campaigns

TRAIDCRAFT Established in 1979 as a Christian response to poverty, it combines a trading company and a development charity. Its mission is to fight poverty through trade, practising and promoting approaches to trade that help poor people in developing countries transform their lives.

It does it by · building lasting relationships with small-scale producers in developing countries supporting people to trade out of poverty. · working to bring about trade justice. · being open and transparent about our practices.

Traidcraft is campaigning to raise awareness of EPAs and lobbying for new deals which put the needs of poor people first. We're working with partners in the UK and Europe and in poor countries in Africa, the Caribbean and Pacific (ACP).

Traidcraft is lobbying the Department for International Development and the Department of Business, Enterprise and Regulatory Reform (and previously Department for Trade and Industry) about our concerns over EPAs. We gave evidence to the International Development Select Committee Enquiry into EPAs, and since then have regularly met with both ministers and civil servants to discuss the state of play, and ensure our concerns are listened to.

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PDF created with pdfFactory Pro trial version www.pdffactory.com INTERNATIONAL RESOURCES FOR FAIRER TRADE

Established under Bombay Public Trust Act in the year 1995, IRFT has been working at the intersection of business and development, making business more sustainable and its benefits reachable to poorest of the poor. We undertake this through promotion of Fair Trade, and supporting Community Business Enterprises. At the same time we encourage and monitor socially and environmentally responsible practices among mainstream business entities.

Its mission is to have an impact on poverty and unemployment by promoting fairer trade and ethical business.

To achieve this mission we have the following objectives

· Promote Fair Trade as a tool to positively impact livelihoods. · Support the development of Community Based Enterprises as sustainable businesses.

· Encourage and monitor socially responsible behaviour amongst mainstream businesses.

THE CHANGE MAKER: Stan and Mari Thekaekara

They founded ACCORD in 1986 to work with the adivasi communities of the Nilgiri Hills. Through ACCORD they helped found the Adivasi Munnetra Sangam (AMS), a membership based tribal organization with 3000 families as members. A Tribal Land Rights Campaign was launched and ACCORD helped the adivasis to plant tea on their reclaimed land. However, ACCORD was aware that the adivasis were now more vulnerable as they had been catapulted from a local wage economy into a global market economy over which they had no control. And so the community started looking for ways to secure the economy of the adivasis. The germ of the idea for Just Change was born in 1991, when tea from the adivasis of Gudalur was successfully exchanged with saris from a weaver women’s co-operative in Madurai. The idea grew when Stan and Mari Thekaekara, spent a month in the UK

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PDF created with pdfFactory Pro trial version www.pdffactory.com to do a critique of community work in Britain (1994) at the invitation of the Charities Advisory Trust and the Directory of Social Change, UK. They were put in touch with a number of poor communities in Britain and found that people were drinking large quantities of tea and paying a high price for it. The tribal groups in India grew tea why not make a direct link to the benefit of both communities? It would be a co-operative of producers and consumers. Not just the rules of trade, not even the rules of governance, but the fundamental rules on which economies are based are fast changing. And they impact the poor people in new ways that are not fully understood. In 1998, through Oxfam, Stan came in contact with the Matson Neighbourhood Project (MNP) in Gloucester working with the residents of a council estate. Mark Gale, then the Director of MNP and Stan, both being effective social entrepreneurs, were quick to see the potential in linking their communities in a way that would be mutually beneficial. If the adivasis of Gudalur could send their tea directly to the residents of Matson, they could then package and sell it both to their own community and to possible customers like the local Council. This was the beginning of a new revolutionized thinking and it came from a social entrepreneur who was not just working for the betterment of the society but was also working for the economic upliftment of the poor around the world. And this upliftment was not as a producer alone, rather it was the upliftment of all the stakeholders especially the producer-consumer-investor tri who contribute to the success or the failure of an enterprise. Just Change Over the years the concept was discussed and analyzed with a whole range of people and it kept slowly getting more and more defined. But it was only when Lord Joffe, the then Chair of Oxfam and James and Marion Wells-Bruges of the R H Southern Trust offered to underwrite the costs for one year (2001) that Stan began translating the concept into reality. Stan handed over most of his responsibilities at ACCORD to a group of tribals and he and Mari started work in earnest on getting Just Change off the ground both in India and the UK. John Fishwick, a former marketing executive with IBM, who spent a one year sabbatical at ACCORD, quit his job and joined Just Change in April 2001 to take up the full time responsibility of developing the concept in the UK.

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PDF created with pdfFactory Pro trial version www.pdffactory.com This then was the genesis of the concept of Just Change. It was born not from a vague theoretical blueprint but from a critical reflection on the experiences of the last two decades and through search for innovative solutions to modern economic problems. Stan Thekaekara and Mari Marcel Thekaekara have worked for the past 20 years mobilizing the adivasis of the Nilgiri Hills of Tamil Nadu in South India to fight for their social, political and human rights. In his latest step, he has established Just Change, an organization promoting alternative trading mechanisms that will benefit poor communities in both high- and low-income countries. This initiative is prototyping a new way of doing business. By sharing the ownership of the value chain, and thereby spreading the risk along that chain, the consumers and producers involved are gaining greater control of their participation in the market economy. Producers can retain ownership over their product all along the market chain and can therefore benefit from the final retail value of the product. Consumers can work directly with producers to establish a price for the product that is based on direct communication and hopefully principles of equity, rather than fluctuating and speculative markets. It is a prototype of a new approach to both business and social change. If communities across the globe could link up to trade directly with each other, they could form a social chain which could be a powerful force for economic, social and political change. 'People need to believe in themselves and in their capacity to take control over their own economy,' states the Just Change website. Their work recognizes the problems and potential of disadvantaged people and communities no matter whether they live in hot or cold, rich or poor countries. As such it hints towards a new approach to international development work, as well as a different form of trade. Three broad concepts of more responsible trade are emerging. 'Ethical trade' describes the work of large companies, such as those involved in the 'Ethical Trading Initiative', which focuses on improving workplace conditions, but does not yet address power relations and revenue distribution in value chains. 'Fairtrade' includes the same concern for better workplace conditions, but also addresses the buyer-supplier relationship, as described above. As the consumer is asked to pay a premium, there is an element of charity to fair trade. The Just Change initiative does not involve a premium. In fact, the prices paid by poor consumers can be lower than the market price, as savings are made through cutting out the middleman and the payment of surplus to distant shareholders. The principle is solidarity, not charity. As such, this

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PDF created with pdfFactory Pro trial version www.pdffactory.com small initiative suggests a new form of solidarity trading could emerge as a new paradigm for people interested in working on trade for social goals. We could call it 'Just Trade'. The power of naming it thus may arise by provoking us to question what we have hitherto assumed is either 'ethical' or 'fair' in the area of trade. Just Change is the latest example of the forms of innovation possible as information and communication technologies spread further for cheaper. Business-to-business (B2B) and peer-to-peer (P2P) applications may become sideshows to new community-to-community (C2C) collaboration in shaping 'Globalization 2.0' by flattening power hierarchies on our planet. Our global village may be creating itself a virtual village market. If successful, in the years to come the best tea in the West may be found on poor council estates, not high-class cafes. Today is capitalism in its purest form. Wealth is no longer created through the control over the means of production. It is created through the trading of the fruit of production. And trading requires one single resource - capital. Not land, not labour. And so it is not the feudal owner of land who is today the powerful controller of a rural economy like ours in Gudalur. It is corporate who control the trade in products produced by others. This Just Trade issue has spread across borders to countries like UK, France, Germany, Scotland, etc. it is worth mentioning the partnership it has nurtured over the years with many like minded organizations like Sir Ratan Tata Trust, ACCORD / Adivasi Munnetra Sangam, Bhoodhan Vikas Mandal (BVM), SAWARD, Sahabagyi Vikas Abhiyan (SVA) and the New Economic Foundation. And also many retail stores across Europe for the sale and distribution of the produce. All this is a result of the various networks that have been formed and the silent campaigns that have gone on for years altogether in order to attain a redistribution of wealth from the rich to the poor. Such a complex system works on a simple principle that a new form of producer-consumer-investor co-operative gives all the participants a share. This principle of benefiting all has also ensured the success and the stability of the model of “Just Change”. This is a replicable model that can be used for the economic globalization and provide unlimited marketability to the produce of the poor from not mere poor countries but also from non-poor countries.

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PDF created with pdfFactory Pro trial version www.pdffactory.com Co-operation or Competition?

In a competitive society, winners and losers are inevitable. And each win gives the other an advantage, placing them that much more ahead in the next round of competition. Advantage and privilege heaped upon advantage and privilege. While those who lose begin each round that much farther back and recede further and further. People applaud the winners and pity the losers - and, by making the winners the great of the earth and the losers the pitiable failures, the blame is skillfully placed, not on the system of competition, but on the participants themselves. If religion is no longer the opium of people, competitive success surely is. There is yet another element to competition - especially what we all like to call healthy competition - there can be no end to it. It dominates every aspect of life but nowhere does it cause as much harm and damage as in the economy. Just Change is proposed as an alternative economic structure that allows people to express solidarity in far more effective ways than has been done in the past. It is rooted in the concept of creating direct links right across the economic chain - from labourers and producers all the way through to consumers and investors. Thus enabling them to participate in the economy in a co-operative manner rather than a competitive one. Basically, the concept is to create a new marketing chain where the traditional links between investors, labourers and consumers can be redefined. In the present market economy, persons with capital are the ones who are seen as 'investors' and therefore gain ownership and control over the economic chain. Persons with labour are not 'investors' - labour is purely a commodity that can be purchased. Consumers are not investors either. Merely a 'market' that should be encouraged to buy whatever the economy can produce. Even with ethical investments, with Fair Trade, with aid, this basic relationship between capital, labour and consumers is not changed. Hence we propose creating a structure where all three participants in the economic chain will be seen as 'investors'. A invests in the economic process by providing capital. B invests by providing labour. C invests by consuming the product of A's capital and B's labour. If we have a structure that will enable all three to participate in the economy as equal partners then perhaps we have a possibility of a more equitable distribution of the fruits of economic activity.

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PDF created with pdfFactory Pro trial version www.pdffactory.com This concept of Just Change was born not from a vague theoretical blueprint but from a critical reflection of the experiences of the last two decades of Stan and Mari Thekaekara. The challenge before us now is whether we can create a structure, which allows people to participate collectively? A structure, which is driven by values and not by mere profit? Where a just distribution of wealth is more important than the creation of wealth? The task before us is to see if we can link people with capital who care with poor people who produce and with concerned consumers. Globalization of the WTO kind is definitely about the creation of more wealth, just as colonization was. It is all about economic growth just as colonization was. But globalization is not about equity just as colonization was not. It is not about justice just as colonization was not. It is, therefore, our responsibility to ensure that justice is done to all be it the producer or the consumer. The failure of the nation-state, especially the poorer ones, to fulfill its responsibility of ensuring equity has resulted in a near total loss of credibility, leaving it vulnerable against the forces of globalization. And the only hope for the future lies in the adivasi people, who have united and worked together to ensure that whatever little wealth is generated in their local economies does not flow vertically upwards to line the pockets of the affluent; that as much as possible stays within their economy and what must flow out flows laterally to other communities like them. In conclusion, it would be better to take up this challenge - will we remain in our little boxes, separated by nationality, colour, religion, class and geographical distance or will we reach out and find people with similar values, people who believe justice and equality should be an integral part of society and not just words to adorn constitutions and declarations.

If globalization is here to stay then let us together reach out and create a global village of our own making! Stan Thekaekara

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PDF created with pdfFactory Pro trial version www.pdffactory.com A BRIEF BOOK REVIEW: ‘FAIR TRADE FOR ALL’

About the Author Joseph E. Stiglitz was awarded the Nobel Prize in economics in 2001 and is University Professor at Columbia University where he founded the Initiative for Policy Dialogue in 2000. He was Chair of President Bill Clinton's Council of Economic Advisors from 1995-97 and Chief Economist and Senior Vice-President of the World Bank from 1997-2000.His best known recent publications include 'Globalization and its Discontents' (2002) and 'The Roaring Nineties' (2003). Andrew Charlton is a Research Fellow at the London School of Economics. He has taught at Oxford University and been a consultant for the Initiative for Policy Dialogue, The United Nations Development Program and the OECD Development Centre.

The authors urge richer nations to help poorer ones prepare themselves for trade, while dismantling their own trade barriers, which prevent developing nations from selling them many goods and services. Richer nations should also help developing nations get a fair share of the benefits of trade. They should no longer protect their own textile producers, subsidize their farmers (the American farm bill of 2002 increased farm payments by some $83 billion over previous bills), shield their maritime and construction industries, or impose fines on poor nations for allegedly "dumping" exports at below-market rates. More broadly, the authors suggest, all nations that have joined the should make a commitment to giving complete free-market access to all developing countries poorer and smaller than themselves. Finally, richer nations should allow unskilled workers from poorer nations to migrate temporarily, thereby earning money they can send home. Another proposal would require that developed countries commit to eliminating agricultural subsidies

Stiglitz and Charlton show that standard economic assumptions are wrong when it comes to many developing economies. When markets in sub-Saharan Africa and elsewhere are opened, people often can't move easily to new industries where the nation has a comparative advantage. Transportation systems that might get them there are often primitive, housing is inadequate and job training is scarce. They're

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PDF created with pdfFactory Pro trial version www.pdffactory.com vulnerable in the meantime because safety nets are weak or nonexistent. Most people lack access to credit or insurance because financial institutions are frail, so they're unable to start their own businesses or otherwise take advantage of new opportunities that trade might bring. Many poor countries are already plagued by high unemployment, and job losses in the newly traded sector might just add to it.

Hence, the authors argue, the pace at which poorer nations open their markets to trade should coincide with the development of new institutions — roads, schools, banks and the like — that make such transitions easier and generate real opportunities. Since many poor nations can't afford the investments required to build these institutions, rich nations have a responsibility to help.

Without these other institutions in place, the authors say, trade by itself can do more harm than good. They point out that inequality increased after trade was liberalized in Argentina, Chile, Colombia, Costa Rica and Uruguay. Ten years after the North American Free Trade Agreement went into effect, Mexico's real wages are lower than they were before, and both inequality and poverty have grown. Many of the manufacturing jobs that came to Mexico in the wake of Nafta have since been lost to China, partly because China invested heavily in education and infrastructure while Mexico, lacking tariff revenues, couldn't afford to do so. According to Stiglitz and Charlton, every developing country that has succeeded in achieving rapid growth has protected its market to some extent until it was ready to dismantle trade barriers. China's growth, for example, escalated in the 1970's, before it lowered its barriers.

Moreover, they warn, one size does not fit all. Richer nations should not force all poorer nations to abide by the same market-opening rules and timetables. Poorer nations have different needs. They are at different stages of economic development (subsistence agriculture in much of Africa and parts of Asia, export-oriented agriculture in Latin America and other parts of Asia, early-stage industrialization elsewhere). They have different political and institutional capacities.

How can this commendable agenda be sold to richer nations? Their political leaders are in a bind since so many of their own citizens are also losing jobs and experiencing declining incomes and, rightly or wrongly, blaming globalization for their plight. This

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PDF created with pdfFactory Pro trial version www.pdffactory.com is one of the major reasons the antiglobalization movement is as strong in the developed world as in the developing. It was, after all, Americans who marched and demonstrated against the World Trade Organization in Seattle in December 1999, at what was to have been the start of the new round of trade liberalization. And just months ago, with a Republican in the White House and a Republican-controlled Congress and with the solid support of American business leaders, the modest Central American Free Trade Agreement squeaked through the House of Representatives by only two votes. The wealthy are growing much wealthier while the middle class is being squeezed.

Heading their list of suggested reforms is the “Doha Market Access Proposal,” which would bind WTO members to provide free market access in all goods to all developing countries poorer and smaller than themselves. Thus, even though Egypt, for example, would have to grant free market access to Uganda, it would in turn win free market access to the United States.

Average agriculture tariff rates (%)

Exporting Importing region region High income Developing countries countries High income 15.9 21.5 countries Developing 15.1 18.3 countries World 15.6 20.1

Source: Herteland Martin (2000)

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PDF created with pdfFactory Pro trial version www.pdffactory.com Average manufactuingtariff rates (%)

Exporting Importing region region High income Developing countries countries High income 0.8 10.9 countries Developing 3.4 12.8 countries World 1.5 11.5

Source: Herteland Martin (2000)

The tables above given in the book also tells about the unfair trade where developing countries are giving more tariff rates than the high income countries in agriculture as well as manufacturing sector. Developing countries are paying high tariff both to high income and developing countries whereas, high income countries are just doing vice- versa.

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PDF created with pdfFactory Pro trial version www.pdffactory.com REFERENCES 1. Stiglitz, Joseph E. and Charlton, Andrew (2005), ‘Fair trade for all- How trade can promote development’, Oxford University Press. 2. Stiglitz, Joseph E. (2002), ‘Globalization and its discontents’, Allen Lane- an imprint of Penguin books. 3. http://en.wikipedia.org/wiki/Fair_trade 4. http://www.amazon.com/gp/product/product- description/0199290903/ref=dp_proddesc_0/102-5859630- 9654526?ie=UTF8&n=283155&s=books 5. http://www.nytimes.com/2006/04/02/books/review/02reich.html?ex=1301630 400&en=7927f3ab7a931eae&ei=5088&partner=rssnyt&emc=rss# 6. http://www.us.oup.com/us/catalog/general/subject/Economics/International/~~ /dmlldz11c2EmY2k9OTc4MDE5OTI5MDkwMQ== 7. http://www.powells.com/cgi-bin/biblio?inkey=1-0199290903-1 8. http://hbswk.hbs.edu/archive/5219.html 9. www.maketradefair.com 10. http://www.oxfamint.org.in/MTF_India.htmFair trade for all – Stiglitz & Andrew Charlton 11. http://www.justchangeindia.com/frames.asp?file=concept.htm&head=Concept 12. http://www.oxfam.org/en/about/ 13. www.traidcraft.co.uk 14. www.profit.org.in 15. www.irft.org 16. http://www.amazon.com/gp/product/product- description/0199290903/ref=dp_proddesc_0/102-5859630- 9654526?ie=UTF8&n=283155&s=books 17. http://www.nytimes.com/2006/04/02/books/review/02reich.html?ex=1301630 400&en=7927f3ab7a931eae&ei=5088&partner=rssnyt&emc=rss# 18. http://www.us.oup.com/us/catalog/general/subject/Economics/International/~~ /dmlldz11c2EmY2k9OTc4MDE5OTI5MDkwMQ== 19. http://www.powells.com/cgi-bin/biblio?inkey=1-0199290903-1

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