FAIR TRADE

Analysis of the Criticism on Fair Trade

Analysis of the Criticism on Fair Trade

Introduction

Fair trade is one of the pillars of sustainable economic and ecological development, as it is a social movement and a form of international trade that seeks the establishment of fair prices, as well as social and environmental standards in balanced supply chains, promoting the meeting of producers with responsible ethical consumers (Ma, 2007).

The very distinction between free trade is often perceived as an exclusive disjunction, which implies that free trade is not fair, and vice versa. However, that in itself is debatable, because the advocates of free trade argue that trade is fair if, and only if, it is free. Moreover, one of the common demands of the advocates of fair trade is to be abolished tariffs that rich countries impose on products from poor countries, and they end the huge subsidies to farmers in rich countries, such as those data by the European Union and the United States (Ma, 2007). Proponents of free trade agree strongly with these two claims. The idea in this regards is that they also should not be allowed to poor countries and impose tariffs on products from rich countries. Moreover, they should be abolished protection afforded to artificial products of poor countries through the seal “fair trade”. The so-called doctrine of free trade seems to include three theses:

All free trade is made with the consent of all parties and are fair;

Protectionism is the protection of certain businesses from competition from other companies more competitive and is unjust;

Ultimately, protectionism is bad for the consumer.

Discussion

Fair trade has seen criticism from many decades and is believed to be false because not always consent ensures fairness of the transaction, even if a person is willing to sell himself/herself into slavery permanently, this transaction would still be unfair. Therefore, only a modified version is hypothesized to be true.

Since coffee is a product through which the seal of "fair trade" has achieved more notoriety, the paper will use the example of coffee to justify the criticism on fair trade. The question that needs to be answered is that what requirements for a product that deserves the stamp fair trade. An example will help explain this. Several multinationals such as Starbucks, Coffee sell fair trade. Such that the coffee deserve this seal had to be fulfilled two kinds of requirements: social and business (Pelsmacker, 2007). To fulfill the social requirements, producers of coffee had to be small farmers or plantation workers. To meet the business requirements, the Starbuck has had to:

An amount paid to producers that covers the costs of sustainable production and a sustainable way of life;

Pay a bonus that producers can invest in development;

Making partial payments early when it was required by producers;

Sign contracts that allow planning and sustainable production practices in the long term.

There are argues for the importance of the existence of fair trade as follows: extinction in the late 1980s, the International Covenant Coffee, which imposed a system of export ...