FAIR TRADE : What it means to make this claim.
These pages examine the issues. 1. What's the problem?

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Fair trade: 2 3 4 5 6 · Origins & challenges 

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   Roy Scott reflects on «fair trade»
   in the UK, and the challenge for the future,
   a featured article from Church Times   
   for «Fair Trade Fortnight» 2003

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   Understanding Fair trade

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Fair trade?

Fair trade is a description often banded about these days, but how realistic is it to make this claim? In a grossly unfair world, to say that trade is «fair» is a big statement.

The assertion is all the more interesting considering that it is probably trade, more than anything else, that has created so much inequality and injustice for the world's people.

The practice of normal trade is to work first of all for the benefit of the traders themselves. Mere growth in trade is unlikely to better the status of the poor.

Faced with a prevailing world system based on capitalist «free enterprise», it is probably inevitable that the principal beneficiaries of commerce will always be those who are already relatively well off.

   Understanding Fair trade   

The system means that it can be almost impossible for people without financial assets to take any control of trade.

Trade generally increases inequality because its process automatically accumulates capital into fewer hands.

Workers are often prepared to accept low rates of pay only because the alternative might be no income at all. Trade creates great wealth for some at the cost of poverty for many others.

It seems that many merchants and shoppers do not realize that when they demand low prices it is individual workers who pay the difference. Workers' earnings are cut – often to less that what is recognized as minimum survival standards.

See ILO report
Read Retail Week report illustrating downward pressure on prices
The Guardian reports on the human situation behind High Street labels
The issue of
«bonded labourers» in India (BBC)

   Understanding Fair trade   

Perhaps the beginnings of progress can be seen when regular companies accept social responsibilities beyond their immediate stakeholders – for example by setting standards within external suppliers.

But, for workers, the situation more often than not remains very hard and is getting worse as inequalities increase. In the world at large, earnings below 50 pence a day are common, with serious social, health, and wellbeing consequences for the individuals involved.

And payment of low prices is not the only trade issue faced by the poor. It is common for buyers to require a discount in exchange for payment on time! They also require producers to bear many of the risks of trade*, so that profits are assured for the rich. Contracts with such far-reaching clauses can cause truly serious human catastrophes when things go wrong.

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So what is this talk of Fair trade

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   What can it mean?
*For example, buyer's contracts can require producers to finance any losses caused by the buyer's own failures to forecast accurately –
Or pay costs and supposed «loss of profits» due to delays that might be beyond the control of producers.

   Understanding Fair trade

Retail Week cartoon © Patrick Blower 2007





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