Fair Trade Part 2: Free Trade Zones and Sweat Shops

August 18, 2010

This is the second part of a discussion on economic challenges in the developing world- and some hopeful alternatives. I wrote about Structural Adjustment Programs yesterday. Click here if you want to read that post.

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Free Trade Zones and sweat shop labor are two other challenges in developing countries. Free Trade Zones are meant to help developing countries, but they are problematic. Wikipedia defines Free Trade Zones as “labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products”. Most Free Trade Zones are located in developing countries. Free Trade Zones are areas that are designated for the production of goods. Trade barriers have been lowered in these areas in the hope of attracting business. Globally, as of 2003, Free Trade Zones employed 43 million people in 116 countries. Wikipedia says that “usually, these zones are set up in underdeveloped parts of the host country; the rationale is that the zones will attract employers and thus reduce poverty and unemployment, and stimulate the area’s economy. These zones are often used by multinational corporations to set up factories to produce goods (such as clothing or shoes).” Sounds like a good thing, doesn’t it? More jobs?

In the documentary Life and Debt, Stephanie Black discussed some of the problems with Free Trade Zones. Because Free Trade Zones are not technically a part of the host country, the workers have no representation. When companies don’t pay their workers fairly, the workers have no recourse. They have neither a union nor a country to protect them- they have no voice. Also, of the 43 million people that are employed in Free Trade Zones, many of these people don’t make a living wage. There have also been reports of workers having their pay withheld unless very high quotas are met. Nike, Osh Kosh and Eddie Bauer are notorious for their presence in Free Trade Zones.

I couldn’t confirm whether Disney has a presence in Free Trade Zones or not, but I am comfortable with identifying them as a company that uses sweat shop labor. Per Annie Leonard’s The Story of Stuff, as of 2009, many workers in their Port au Prince manufacturing plant have been fighting for well over 15 years to get minimum wage. Minimum wage in Haiti is $15 a week– that’s six days a week- 8 hour days. Less than 35 cents an hour. Just like what has been reported in Free Trade Zones, many of the workers in Disney’s Haitian factory reported that they had to make a certain quota in order to be paid minimum wage. Again, Annie Leonard: “even with the horrible working conditions and starvation wages . . . women feared losing their jobs, because they had no other opportunities”. This is something that I want to do something about- this lack of opportunity. It’s just not right for sweat shop labor to be a worker’s best choice- for 35 cents an hour to be your best bet.

It’s worth mentioning that many companies in the United States have moved their production to developing countries in order to avoid the environmental regulations that we have in the US (and, of course, to pay the workers less). Developing countries want companies to set up shop in order to bring in jobs. Indeed, cheap labor and lax environmental regulations are two factors that are a big draw to multinational corporations. Unfortunately, this often means that host countries are left with an environmental mess on their hands. Sadly, there have been cases where it hasn’t just been an environmental mess- but instead an outright disaster. Read here about the Union Carbide disaster that occurred in Bhopal, India.

Playing the devil’s advocate, you could say that countries know about these draw backs on the front end. My point here is that just because a multinational company can get away with something doesn’t mean that they should. As consumers we have a choice each time we make a purchase. And I’m hopeful that we can participate in meaningful development that will give workers a more hopeful future than being sweat shop laborers. Development that will give consumers high quality products and workers in the developing world a wage that they can actually live on.

 

To read the other two parts of this series, please click on the links below:

 

Fair Trade Part 1:  Structural Adjustment Programs

Fair Trade Part 3:  Why Fair Trade?

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2 Responses to “Fair Trade Part 2: Free Trade Zones and Sweat Shops”


  1. […] of the US are often made in free trade zones.  You can read more about free trade zones here. I’m wondering if any of you have a short list of vendors for me to consider? Here’s my […]


  2. […] Fair Trade Part 2:  Free Trade Zones and Sweat Shops […]


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