People may criticise Fair Trade goods, but they are just starting out….
In the UK, there were just £16.7 million of sales of Fair Trade goods in 1998 – hardly a huge amount. The figure had escalated to £493 million in 2007. That is nearly half a billion pounds of sales and is a huge increase.
Protractors of Fairtrade say that Fairtrade is protectionist and that the market should be left to decide the price of a product. Competition and efficiency follow on from this as well as innovation. The Free Trade argument also uses the theory of Comparative Advantage. Very simply, this says that any two countries should do what they are best at and that trading is better for everyone as a result.
Anyway, just carrying on trade with a country will help it climb out of poverty. Trade of any sort is positive and must surely help the poorer nation’s people over the long term. Foreign trade puts cash into the economy and creates employment and that further supports the local economy. Over time, such a country’s economy will improve grow and the wages, wealth and working manner of its workers will get better.
Fairtrade also faces criticism for creating inefficiencies in the market, that it reduces product quality because the better produce is put aside for sale on the open market rather than being put through the Fairtrade scheme. Some people have said that here are more methods of helping the world’s poorest instead of just giving them a guaranteed reasonable price for their goods. For instance, most of the value in a product is created at the time the raw material is manufactured and the finished item is produced. However, that part of the process normally takes place in wealthier countries. The roasting of coffee beans prior to before export would make much higher income for producers.
Fans of Fair Trade Goods strongly argue that the majority of products that are made by third world countries, such as coffee beans, have highly erratic prices. Business planning is very difficult or impossible s a result of this and the cash flow situation very difficult, to say the least. The long term prices of such goods show a decrease, too. Developing countries require far more help than just any trade at any price. They also state that the actions of the international companies that supply our consumer goods and even much of our food help to reduce both the wages and working conditions of overseas workers as they try to meet consumers’ demands for ever cheaper goods.
Looking at all of this there are truths in both arguments. Standing back from a distance and viewing the arguments it is clear to see that something new is going on. Fairtrade has been around a very short time and will evolve. In fact, it has to change and become better if it is to meet the needs of all everyone involved. Debate is vital in this process as it will help everyone’s understanding and move things forward. Innovation should follow and Fairtrade should find its way forward. Fairtrade supporters need to understand its weaknesses and see how it can be improved, whilst those on the other side of the argument could make a vital contribution to its well being by making suggestions for its improvement.
My opinion is that they may not be perfect but we should strongly consider purchasing Fair Trade Goods whenever we can.
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