Co-operative Internationalization: Lessons from the Fair Trade Movement

 The practice of Fair Trade has been one of the most widely acclaimed movements for promoting local development through international co-operation. Fair Trade links small producers in the South more directly to Northern consumers through the intermediation of Fair Trade Organizations (FTOs) that are committed to “Fair Trade Principles” and the development of more just trade practices. Through these principles small producers in the developing world are able to access higher prices for their goods and, perhaps more importantly, benefit from a range of financial, organizational, and technical support. These advantages can function to expand the organizational and networking capacities of small producers, increasing their competitiveness in traditional markets and better enabling them to pursue an integrated local development strategy.  
There are several features of Fair Trade that allow it to provide important lessons for the international-ization of  cooperatives (and social economy activity more generally).  These include the facts that: 1) Fair Trade producers in the South are typically organized into co-operatives; 2) many Northern Fair Trade actors are co-operatives (or social enterprises); 3) there is a strong overlap between co-operative principles and fair trade values (including the notion that fair trade exchanges are supposed to be based upon relationships of solidarity); 4) both co-operatives and Fair Trade actors typically find it necessary to engage with traditional firms (e.g., as suppliers); 5) there is a divergence both among Fair Trade actors and co-operatives with regard to the pressures that the feel from processes of economic globalization and how they respond to these pressures (which can be analysed through variations in their value chains).  
This paper will examine the lessons - both positive and negative – that the Fair Trade movement has to offer with respect to co-operative internationalization.  On the positive side, these lessons include: a) the potential for and importance of marketing “the co-operative advantage” as a way to capture ethical consumers;

b) the importance of developing co-operative value chains and ensuring the consistent exercise of co-operative values throughout the length of the chain; c) the importance of consumer education with respect to understanding co-operative values and production; d) the roles that consumer organizations and civil society actors can play in the promotion of co-operative production as a more sustainable and fair option to traditional firms; e) the importance of political engagement (and strategic alliances) for ensuring a level playing field for cooperatives. On the more negative side, Fair Trade has learned several lessons, often at great cost to the movement. These include: a) the problems of trying to grow too fast; b) which can lead to making trade-offs in the form of strategic alliances with large multi-national corporations, which are not committed to fair trade (or co-operative) values, and; c) a certain approach to the “professionalization” of co-operatives and the recruitment of leadership from traditional business backgrounds, and; d) a corresponding marginalization of the grassroots from control of the movement.

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