Trade has the potential to both to lift individuals and countries out of poverty, as well as contributing to the problems and inequalities they face. At present the international trading system is an un-level playing field that unfairly disadvantages the poorest countries and is pushing many of them deeper into poverty.

At present the global architecture of trade marginalises large segments of society, who are unable to benefit from the global trading system. The lack of equity in the trading system means that many poor countries are unable to attain equitable economic development. This in turn means that they are unable to tackle issues such as food security, which are essential if they are to meet the aims of the Millennium Development Goals.

Although a number of Southeast Asian countries have managed to develop equitable growth strategies that utilise the international trade system, for many other countries the international trade system has led to severe indebtedness. Trade justice supports changes to the global trading system that would promote the economic development of poorer countries, allowing sustainable poverty reduction while protecting the livelihoods of local producers. This could be partly achieved by actions such as reducing the tariffs imposed on poor countries, as well as comprehensive debt relief.

On a smaller scale many ‘fair trade’ initiatives have also shown that it is possible to use trade to help poor communities get out of the poverty trap. ‘Fair trade’ refers to a trading partnership in which the producer is guaranteed a fair wage as well as decent working conditions in order to increase sustainable development. Fair trade has been successfully developed by non-governmental organisations and exists because of choices made by consumers. It helps to give a voice to millions of small producers and helps to empower them and their communities.

Poverty reduction and equitable economic growth requires a trade architecture that does not marginalise large segments of society.

Our values
Islamic Relief is a relief and development organisation founded in the West but guided by Islamic principles. We work to alleviate the poverty and suffering of the world’s poorest people. Given the role that trade plays in deepening the poverty of many countries it is necessary that we add our voice to the debate on the need for a more just world trading system.

In Islam trade is encouraged as it is considered to be an empowering activity. However, there are boundaries on what can be traded and how, with people required to trade ethically. Above all social justice and equity must be the determining factors in all economic endeavours, as social justice and equity are at the heart of Islam.

In Islam there are a number of principles that economically active people must adhere to:

1. People must not be exploited. This means that workers must be fairly compensated for their work and must not be coerced or forced against their will to carry out work.
2. Charging interest is forbidden.
3. Certain products such as drugs and alcohol must not be traded.
4. Key sources of wealth, such as water, must not be monopolised.

In many ways Islamic principles of trade ethics and the current message of trade justice advocacy groups have much in common. Both focus on empowering poor countries and communities and eradicating the exploitation of producers in the developing world. Other areas where thinking is aligned include:

1. Workers and producers must be fairly compensated for their work and goods.
2. Workers should be guaranteed a decent standard of living.
3. Fair trade should ensure access to markets and opportunities.
4. Working conditions should be safe and reasonable. This means that production of goods should not involve exploitation, slavery or the worst forms of child labour.
5. Trade practices should not impede on intergenerational justice. This means that production should aim to cause minimal environmental degradation.

Our response
Islamic Relief has developed three trade-related objectives.

1. Working towards a more just world trade system: Islamic Relief will contribute towards the development of a more just world trade system. We will complement the existing work of various worldwide trade justice lobbies by adding Islam-specific messages on trade ethics to the discourse. This will involve advocacy campaigns aimed at the general public and our donors, as well as engaging in in-depth dialogue with key trade organisations and policy makers.
2. Implementation of an internal fair trade policy: Islamic Relief will progressively implement an ethical procurement policy. This will begin at our headquarters and will spread to other parts of the Islamic Relief family. This will begin with securing a fair price for small producers and combating environmental degradation and will increase to include issues such as labour rights.
3. Entering the worldwide ‘fair trade’ market: Fair trade products range from bananas to coffee and are produced and bought in such a way as to guarantee small producers in developing countries a fair wage and to encourage economic and social development. In the long term Islamic Relief will utilise its successful livelihood projects to produce items that are marketable and ethically produced and traded.
   

Send your feedback on this material to
pru@islamic-relief.org.uk.