Wednesday, March 7, 2012

the benefits and costs of "Fair" (Free) Trade

Some of the summary points:

• Fair Trade is part of the market economy and is not, in any way, in opposition to free trade.

• Fair Trade brings certain benefits to producers...These benefits may not be as great as many of Fair Trade’s
proponents imply...

• Criticisms of Fair Trade are also exaggerated...
• The benefits of Fair Trade also come at a cost. There is a levy on the wholesaler as well as a certification charge for producers. The certification charge starts at £1,570 in the first year – a huge sum of money for producers in the poorest countries.
• Fair Trade does not focus on the poorest countries. Fair Trade penetration is greater in middle-income than in poor countries.
• The benefits claimed by Fair Trade can also be obtained from the normal business relationships that exist between primary product producers and buyers. Attempts by proponents of Fair Trade to denigrate free trade and normal market practices are not helpful and distort realities.


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