The creation and developments of an alternative market. The example of Fair Trade between Latin America and Europe

In my presentation I analyze Fair Trade as an example of challenge between the dominant international market system and an alternative practice aiming to mutate its hegemonic structure.

I ground my presentation on the empirical findings of a three years research with case studies of coffee producers in Mexico, Nicaragua and Peru and traders in Germany, Italy and the United Kingdom. I focus the analysis on the institutional change processes affecting the international commodity chain of Fair Trade coffee.

The explicit goal of Fair Trade towards ‘market moralization’ appears to have the potential to drive a change in the global market, challenging the practices and the basic assumptions of the capitalist system. Nevertheless, its success, boosted by consumers’ interest, has already attracted the attention of large, conventional companies formerly indifferent to it. Their increasing influence over Fair Trade appears to mirror the attitude of capitalism to adapt to potentially revolutionary changes and subsume them.

I investigate the competition between the two governance systems institutionalized in Fair Trade: 1.the Alternative Trade Organizations’ model, which represents the original alternative way of practicing Fair Trade; and 2.the Fair Trade certification model, which is used by corporations to step into the Fair Trade system. The competition between these two models expresses the tension that Fair Trade generates within the capitalist system.

The coffee market offers several clear examples that indicate a clear change in the institutionalization of transnational market practices. This on one side proves the potential Fair Trade has to drive changes in specific patterns of globalization on the other it makes visible the counter forces of the capitalist system tackling this possibility of change. The outcome of this dynamic will shed light on the future of the international commodity market.