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Fair trade

Posted on:2/2/2006
The fair trade movement, also known as the trade justice movement, promotes international labour, environment and social standards for the production of traded goods and services.


The fair trade movement, also known as the trade justice movement, promotes international labour, environment and social standards for the production of traded goods and services. The movement focuses in particular on exports from the Third and Second Worlds to the First World. Standards may be voluntarily adhered to by importing firms, or enforced by governments through a combination of employment and commercial law. Proposed and practiced fair trade policies vary widely, ranging from the commonly adhered to prohibition of goods made using slave labour to minimum price support schemes such as those for coffee in the 1980s. Non-governmental organizations also play a role in promoting fair trade standards by serving as independent monitors of compliance with fairtrade labelling requirements.

 

Implicit (and often explicit) in these approaches is a criticism of the current organisation of international trade as being "unfair". When developing countries export to rich country markets, they face tariff barriers that can be as much as four times higher than those encountered by rich countries. Poverty advocates claim that those barriers cost poor countries $100bn a year - twice as much as they receive in aid. Advocates of fair trade practices also hold that the fluctuation of commodity prices does not guarantee a living wage for many producers in developing countries, forcing many into crippling debt. Market prices may not properly reflect the true costs associated with producing the product due to economic externalities such as environmental and social costs. Although critics of so-called fairer trading practices charge that proposals for reform simply amount to protectionism, campaigners maintain that it is rich countries such as the United States and the European Union which operate expansive programmes that subsidise their domestic producers.


  
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