Fair trade is a trading partnership that seeks more equitable international trade relationships. It aims to help marginalized producers and workers in developing countries secure better trading conditions and rights by offering higher prices to cover the costs of sustainable production. Some argue fair trade has alleviated poverty by providing opportunities for producers to earn higher incomes. However, others argue it is merely a marketing tool that exploits consumer goodwill while providing minimal benefits to producers. There is debate around whether fair trade rules actually help or hinder producers and laborers.

1. Is Fair-trade fair?Is Fair-trade fair?
Team of Legal Research
Thomas Henry Gummer
Soon Lee Tan
Ng Wai Yen
Ian Wong

2. DefinitionDefinition
 Fair Trade is a trading partnership, basedFair Trade is a trading partnership, based
on dialogue, transparency and respect,on dialogue, transparency and respect,
that seeks greater equity in internationalthat seeks greater equity in international
trade.trade.
 It contributes to sustainable developmentIt contributes to sustainable development
byby offering better trading conditionsoffering better trading conditions to,to,
andand securing the rights ofsecuring the rights of,, marginalizedmarginalized
producers and workersproducers and workers – especially in the– especially in the
SouthSouth..

3. HistoryHistory
 Curtail the exploitation of coffee pickers inCurtail the exploitation of coffee pickers in
Dutch colonies.Dutch colonies.
 Fair-trade foundation in 1992Fair-trade foundation in 1992
 Worldwide recognised brand/labelWorldwide recognised brand/label¹¹
¹http://www.fairtrade.org.uk

4. RoleRole
 Assist developing country workersAssist developing country workers
 Bringing togetherBringing together producer and consumerproducer and consumer
in a citizens’ movement for a changein a citizens’ movement for a change
 Tool to ensure disadvantaged farmers andTool to ensure disadvantaged farmers and
workersworkers receive a better dealreceive a better deal

5. Alleviating Poverty?Alleviating Poverty?
 Plough back into producerPlough back into producer
communitiescommunities by retailer by charging aby retailer by charging a
higher premiumhigher premium
 FLO acts as a catalyst forFLO acts as a catalyst for increaseincrease
product quality and better workingproduct quality and better working
conditionsconditions
 A strategy for poverty alleviationA strategy for poverty alleviation
 sustainable development acrosssustainable development across
developing countriesdeveloping countries²²²<http://www.fairtrade.org.uk/what_is_fairtrade/fairtrade_foundation.aspx> accessed in 20/10/2010

6.  FLO is praised that well meaning moveFLO is praised that well meaning move
towardstowards increasing opportunities forincreasing opportunities for
poor producers of goodspoor producers of goods ..
 People like thePeople like the idea of helping peopleidea of helping people
not with hand outsnot with hand outs but opportunity tobut opportunity to
work hard and decentlywork hard and decently
 UK food retail industriesUK food retail industries supportsupport such assuch as
Co operative, Waitrose, M & S…..Co operative, Waitrose, M & S…..

7. A mere marketing toolA mere marketing tool
 ““exploiting customer goodwillexploiting customer goodwill” by adding” by adding
additional mark ups to fair trade for theiradditional mark ups to fair trade for their
own profitown profit
 Regulation stop many farmers from qualifyRegulation stop many farmers from qualify
for fair trade salesfor fair trade sales

8.  Out of every 10 pence made in mark upOut of every 10 pence made in mark up
only 0.01 pence is received by producersonly 0.01 pence is received by producers
 Fair trade helps landowners, rather thanFair trade helps landowners, rather than
the agricultural labourers who suffer thethe agricultural labourers who suffer the
severest povertyseverest poverty
 Fair-trade rules actually make it harder forFair-trade rules actually make it harder for
labourers to gain permanent, full-timelabourers to gain permanent, full-time
employment.employment.
Adam Smith InstitutionsAdam Smith Institutions ³³
³.-‘Adam Smith Institute: Fair trade is unfair, says think-tank’ (25th Feb 2008)
<http://www.politics.co.uk/press-releases/adam-smith-institute-fair-trde-unfair-says-think-tank-
$1207231.htm.> , accessed 20th October 2010

9. ConclusionConclusion

10. ConclusionConclusion