Chains for Change

Trade can be an important driver in poverty alleviation and empowerment in developing countries. International trade relations can be an important impetus to change, but in what direction? Whether the optimistic expectation related to trade liberalization and globalization materializes, depends on the conditions under which trade relationships are managed. As an arms-length relationship between independent actors, or as dependency relationships in networks of supply and demand, also known as international value or commodity chains? This makes the issue of ‘fair trade’ a prime topic not only for policy makers and international economists, but also for business scholars. Firstly, fair chains involve the inclusion of small entrepreneurs: firms, farmers (small-holders) and their co-operatives. Are they able to participate in global value chains, can they get a fair share of the economic pie and can they produce under sustainable conditions? Secondly, there is the big business perspective which involves major traders and multinational firms that ‘steer’ global value chains either in-house or at arm’slength. Thirdly, the question involves the acts of consumers. Can their – sometimes inarticulate – demands for sustainability and fairness be translated in feasible market propositions (products, business models) and clear communication (labels, codes)? Finally, there is a role that has to be played by governments: can they be neutral bystanders or should they become active, and if so in what areas?