by Michael Gidney, CEO at the Fairtrade Foundation
A few weeks ago history was made when the UK decided to leave the EU. The impact on business, the grocery industry and the Fairtrade movement in particular, could be profound. What will happen to the single market? What will happen to our food prices? After all, food security was one of the main reasons the European common market was set up and businesses have been following its rules of trade for decades.
This is to be no quickie divorce. Like any split after so many years there is fault on both sides: debate on the benefits or risks for trade have too easily descended into rancour and emotion. The years of negotiation ahead will give us time to cool off, to pause and reflect on what the EU has achieved to improve the lot of farmers and workers around the world. Since the EU was first conceived, producers in many countries have more clearly defined rights on a range of subjects from health and safety standards to wage bargaining and attitudes to child labour. While too often those rights are still not recognised locally, the aspirations underpinning the EU’s trade and development policy have helped create space for discussion and negotiation. Whether or not these gains would have been made if the UK had traded in isolation all these years, the fact is that globalised trade needs international policy to set common rules and avoid a race to the bottom. It is much harder for countries to achieve this individually.
The EU has also been a strong champion of Fairtrade, with many MEPs (including from the UK) being vocal advocates for the Fairtrade movement. For example, the EU has promoted Fairtrade terms within its guidelines on public procurement which has resulted in local authorities in many member states changing the way they assess ‘value’ in their sourcing. And in October 2015, for the first time, EU trade strategy included commitments to support fair and ethical trade schemes. This was a very practical way in which the EU would seek to ensure that its future trade would work better for the millions of farmers and workers in the world’s poorer countries, who are vulnerable to hunger, human rights abuses and the devastating impacts of climate change.
There is no guarantee that these commitments will be taken up by the UK, as it wades through the many bilateral and multilateral trade agreements it must now negotiate. There is a real risk that the rights and needs of producers in the global South will fall from sight. As we go forward in campaigning and negotiating for a future UK trade strategy, we must ensure these farmers and workers in their millions are not left short-changed.
Currently the UK imports 38% of its food. If trade barriers go up as the UK renegotiates trade deals across the world, there could be less choice in supermarkets. Farmers in the UK have also warned prices may rise, and the National Farmers’ Union want assurance that the £2.4 - £3bn in subsidies they receive from the EU under the Common Agricultural Policy will continue. There are many strong voices among consumer, business and farming lobbies whose needs the UK government will need to respond to.
But what about farmers in developing countries who produce every day groceries such as coffee, cocoa and bananas? Brexit could disrupt their sales as the cost of trade with different countries changes. In other words a new deal for one country could come at the expense of farmers in another. This could push greater hardship upon the millions farmers trying to work their way out of poverty. Over the past few days we have received emails from producers around the world, worried about what the Brexit decision will mean for their sales to the UK, which is the largest market for Fairtrade goods in the world.
Amidst all this uncertainty, there is surely opportunity for the UK to create a dynamic, new trade strategy, which works for consumers, businesses and producers alike. A strategy which builds on the UK’s long and proud track record of fighting poverty and championing international development. There is real support in the UK for this: in Fairtrade alone we saw our supporter base increase 25% last year. Over the years, British MPs have often said their hands were tied on issues to do with making trade fairer for all, because of EU membership. The “Leave” campaign even argued that the UK would be in a better position outside the EU to negotiate new trade deals to benefit poor countries. So the government now bears a heavy responsibility to make sure that it realises this promise to make the UK’s new trade deals truly fair for farmers worldwide.
This will take time and real commitment to enter into fair and open negotiations with developing countries. New proposals must not be tied to unacceptable demands for poorer countries to open up other sectors. Liberalisation must go at the pace of the weakest - surely these are the lessons learned from the stalled Doha WTO round. But the uncertainty could damage trade in the meantime, and this is an unacceptable cost if we are to tackle the scandal of hunger and poverty among farmers globally, who grow food for us but are unable to feed their own families.
Now is the time for the UK to propose a new beginning. It could, for example, commit now to offering duty-free quota-free market access to all developing countries into the UK. Yes the details would need to be worked out, including who qualifies and what to do about economies like Brazil, India and China, but it would send a powerful signal of intent, and a message that UK trade in the future will be more, not less, inclusive.
We will need to hold the government to account - the years of blaming Brussels will soon be at an end. The fact is most of our trade deals will need to be renegotiated. There is an opportunity to put fairness at the core of the UK’s future international trade. Whatever the outcome of the current chaos, we at Fairtrade will redouble our efforts to make trade fair. Now, more than ever, producers need the support of shoppers, businesses and politicians to make this happen.