4.5: fair trade

• fair trade: international trade with a focus on sustainability and the rights of workers
  • protecting workers and small businesses in developing countries

fair trade standards

• mainly focused on trade from developing to developed countries
• fair trade-based organizations (generally nonprofits) bring to light the dark sides of international trade, namely exploitation of people and resources in developing countries
  • focus on economic, social, and environmental benefits of fair trade
  • three sets of actors and potential beneficiaries: workers, consumers, and producers
• fair trade for producers
  • the idea that a small portion of consumer price goes to the producer in a developing country
  • eg. Haitian sewing → sewers get a cut of the end price while the rest goes to wholesalers, importers, distributers, advertisers, retailers, etc.
• fair trade for workers
  • arguments against international trade
  • little government protection of workers
  • many work long hours under poor conditions for little pay
  • child labor and forced labor may be prevalant
  • poor sanitation and poor safety lead to poor health for workers
• fair trade aims to
  • raising the incomes of small-scale farmers and artisans by getting rid of some intermediaries in the supply chain
  • distributing production profits and risks more fairly between producers, distributors, retailers, and financiers
  • increasing the entrepreneurial and/or management skills of producers
  • promote safe and sustainable farming habits and working conditions
  • eg. eliminating the use of pesticides, herbicides, increasing the production of organic crops
• fair trade requires
  • wages high enough to support food, shelter, education, healthcare, etc. for workers → cover basic needs and pay a living wage rather than exploiting poverty for profits
  • ensured right to unionizing and bargaining
  • increased effective environmental regulations and improved safety standards
• international fair trade organizations set standards and serve to monitor, audit, and certify compliance with these standards
• farmers and artisans (co-ops) qualify for
  • credit for funds for equipment and improving farms
  • decreased cost of materials
  • producers democratically allocate resources, oversee safe and healthy working conditions to ensure their presence
  • profits invested directly into the community instead of being sent to corporate owners