Fair Trade means an equitable and fair partnership between marketers in Western countries and producers in developing countries. A fair trade partnership works to provide low-income farmers and artisans with a living wage for their work. Fair Trade Federation (FTF) criteria of Fair Trade are:
- Paying a fair wage in the local context
- Offering employees opportunities for advancement
- Providing equal employment opportunities for all people, particularly the most disadvantaged
- Engaging in environmentally sustainable practices
- Being open to public accountability
- Building long-term trade relationships
- Providing healthy and safe working conditions within the local context
- Providing financial and technical assistance to producers whenever possible.
Issues of Fair Trade
Rich developed countries limit and control developing countries’ share of the world market by regulating high import taxes. As a result, many poor countries are forced to export raw, primary industry materials, which give far lower returns than secondary industry products.
For example, countries such as Australia buy cheap cotton and cacao and turn them into expensive clothes and chocolate – reaping all the profits. At the same time, developing countries are threatened with having loans withheld unless they open their markets to rich countries exports.
Most of the world’s coffee beans, cacao, cotton, and copper come from developing countries, yet it is the rich developed countries that set the prices. If the price is set low the big companies that sell to the consumers make a huge profit, leaving the producers even poorer than they were.
Many big brand name companies in the fashion and food industries are driving down employment conditions for millions of workers (mainly women) around the world. Competition means these companies are squeezing their workers to supply cheaper and cheaper products. This results in long work hours, faster work rates, and poor conditions with no job security.
Patents imposed by developed countries push up the price of essential products such as seeds, medicines, software. This takes the cost of these goods out of the majority of people in developing countries.
Dumping & Subsidies
The developed countries insist the developing countries get rid of subsidies, but they continue to spend billions of dollars subsidising their own farming enterprises. Subsidised produce is dumped on developing countries, driving down the price of local produce and having devastating effects on the local economy.