Fair Labour and Ethical Trading

One of the most significant developments in the world of trade in the last couple of decades has been the opening up of economies across the world.

International trade has got itself out of the fetters of tariffs (protectionist import duties) and quotas (quantitative import restrictions) to a large extent, leading to the an unprecedented boom in business globally under the WTO regime.

Relocating to Low Cost Economies

A direct fallout of this has been the relocation of many low-technology industries to low cost economies in the developing world. To remain competitive, a large number of companies have shifted their manufacturing base to low-cost economies of the “South.”

The cost advantage in these countries has also helped consumers in the developed countries by keeping the prices of many essential commodities low. In the textile sector, most of the world production is today sourced from Latin America, Asia and Africa.

Lowest Possible Wages

However, a completely different set of problems started surfacing soon after this transition. To keep costs low, the majority of producers looked for countries with the lowest possible wages to locate their manufacturing facilities. This in turn led to concentration of industries in countries with inadequate safety net for industrial workers – whether a poor legal structure or a poor record in their enforcement.

Horror stories soon began pouring out of many such manufacturing hubs, a return to the dimly lit, unventilated ‘sweatshops’ of the early days of the Industrial Revolution. A kind of industry where there are no maximum working hours, no overtime pay, no holidays, no benefits, no trade union or collective bargaining rights. Where little children work in the unhealthiest of environments, and getting pregnant can get a woman worker fired.

There have even been reports of indentured or bonded labour and sexual exploitation of workers. The victims are inevitably the weaker and marginalized communities without a minimum access to human rights and freedoms we take for granted.  Governments in such nations sometimes hesitate to crack down on such abominable practices fearing that the industries would simply relocate to other countries, creating even more poverty.

Sweatshop-Free Production

It is against such inequitable and unfair practices that the concept of ethical and sweatshop-free production first emerged. The movement presents a case for discouraging these unscrupulous producers by simply refusing to buy their products, unless they follow certain norms of behaviour. A number of organisations on both sides of the Atlantic have campaigned for consumers to be aware of where the things they buy are actually coming from, and whether blood and tears went into making them.