Fair Trade refers to an organization that certifies that goods sold with its marketing label have been sourced from producers at "fair" prices and have been grown using sustainable methods. In particular, the organization's mission states that products bearing its label have been negotiated directly with farmers or working families who choose to send their children to school, maintain environmentally-sustainable methods, and recognize employees' rights to organize in unions. The most common place we hear about "Fair Trade" is in our favorite coffee house, but the label can also be found on cocoa, apparel, flowers, wine, and soccer balls. A recent article even explains how "fair trade" - with no caps, since this would not seem to be sanctioned by "Fair Trade USA" - has been adopted by cocaine traffickers as a marketing tool to signal that their blow was not purchased or produced through criminal cartels or from corrupt law enforcement officials.
Fair Trade should not be confused with free trade, which refers to a policy regime enacted by a government in which goods are traded with very few discriminatory taxes or legal barriers that apply only to imports. Fair trade on the other hand is a marketing tool - branding - that differentiates its goods in terms of consumers' perceptions of quality. Also, while it is true that wholesale prices Fair Trade organizations pay farmers is nominally higher than that paid to corporate producers, much of that markup goes to the organizers who sponsor the label.
As we will learn later in the course, one of the most effective ways to raise wages in poorer countries is to tear down trade barriers, both in terms of import restrictions by developed countries and export restrictions by their home countries.
I think any developing country should operate with "Fair Trade". Not only does it help the producer, but also positively influences the surrounding community. For a country to have a fair trade market will substantially benefit a country by obtaining better trading conditions, which will ultimately allow for that country to grow at a much faster rate. When a developing country wants to trade without fair trade, it makes it almost an impossible task. A fair trade market will allow those hard working producers that are at a disadvantage in developing/struggling countries an opportunity to succeed, due to the fewer restrictions and a more direct trading method.
ReplyDeleteI believe fair trade prevent illegally compete to harm other company. Protect both consumer and supplier. It is hard to prevent unfair situation, but there is organization group and also law. Increasing creativity firm acts, freely promotion of competition, and perform mediation role. In Korea, we have big law of fair trade which controlled illegally economic acts or profits. Specially, prevent poor agriculture and manufacture from high handedness of big corporations.
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