----

(2004/C 70 E/058)

WRITTEN QUESTION E-1628/03

by Eija-Riitta Korhola (PPE-DE) to the Council

(14 May 2003)

Subject:   Promoting fair-trade products in the EU

During Fair Trade Week, which begins on 3 May, campaigners in Finland will draw attention to fair-trade products and seek to persuade members of churches, among others, to increase their use of fair-trade coffee.

In reply to my written question P-3856/02 of 24 January 2003 (1), Commissioner Pascal Lamy wrote: ‘In the long run, however, only a sustained trend of increased demand for fair trade products by European consumers is likely to lead to large reductions in prices [of fair-trade products].’

Has the Council considered or does it intend to consider possibilities of promoting demand for fair-trade products by publicising European Fair Trade Week (3-9 May) in the Member States?

Will the Council promote demand for fair-trade products by means of public procurement in the Member States?

Reply

(8 December 2003)

Poverty reduction is the overarching goal of EC's development policy. At its November 2002 meeting, the Council (GAERC) adopted its conclusions on Trade and Development, where it recognised that trade liberalisation in itself is not sufficient to combat poverty in developing countries and it stressed the need for balanced trade rules that benefit all countries, with particular attention to the least developed countries.

The Council is both aware and deeply concerned about the long-term decline of the prices of most commodities and is taking care of this issue in the context of a joint reflection with the Commission on the basis of a recent Commission paper on Agriculture Commodity Trade, Dependence and Poverty which deals inter alia with the potential of mainstreaming fair trade.

The Council welcomes fair trade insofar as it gives producers in developing countries higher revenues for their goods as well as increased opportunities to find new markets. In so doing, fair trade aims to contribute to establishing the conditions that can foster a higher level of social and environmental protection in developing countries.

Currently, the only fair trade products that have 4 % or more of the market within the EC are bananas in the Netherlands (4,2 %) and Luxembourg (4 %). Fair trade coffee consumption is increasing but still remains very limited. Total turnover for all fair trade goods in Europe is estimated to be around EUR 260 million. Fair trade products are typically 5 % to10 % more expensive than equivalent conventional products. In addition, the movement is a largely European phenomenon. In the US it is virtually unknown — e.g. fair trade coffee accounts for only 0,15 % of their market.

Thus the potential for expansion globally exists, but closing the gap between the intentions of the consumers and their actual behaviour is likely to require time and would have to pass through a wider presence and recognition of these products by the consumers. European Fair Trade Week should therefore be actively supported.

The Council considers that promoting the demand for fair-trade products is part of a wider scenario of corporate social responsibility. At the ICO/World Bank Round Table on the Coffee Crisis held in London on 19 May 2003, the EC suggested inter alia encouraging private industry to invest in long-term relations with suppliers, based on mutual benefit, through the introduction of codes of conduct for the purchase of coffee, in which fair prices should be one of the essential elements.

Finally, the Council has welcomed the Commission's intention to present a general review of the EU's trade-related assistance in 2005. This review should be an appropriate occasion to consider possible ways to foster the consumption of fair-trade products.

----

(1)  See page 26.

----