Топики 2 курс / Fair trade

Fair Trade

Fair Trade is a model of importing goods that have been created by workers who are earning real livable wages for what they are doing. Instead of taking advantage of the free market system to pay workers in the undeveloped world next to nothing, producers agree to meet specific wage and production standards in return for certain import concessions. The overall concept of Fair Trade seems very positive upon first glance. Digging deeper, there are some disadvantages to the Fair Trade system that must also be evaluated. Here is a look at some of the key points to consider when looking at imports within this production system.

Advantages

1. Living wages are more than just a few cents per hour when involved with the Fair Trade model.. Many cooperatives also make investments within local communities to support their workers, including modern medical care, schooling options, and the teaching of sustainable food growing practices.

2. Comforts are also provided by the Fair Trade model by cooperatives and providers. Many workers are able to work in conditions that exceed local standards and worker safety is often a top priority.

3. Discrimination is not allowed. Workers in a Fair Trade cooperative are free from discrimination. This allows for equal job opportunities that may not always be available to local workers.

4. Child labor can be reduced.

Children are very much a commodity in the undeveloped world. Many children work long hours without any form of payment – or if they do earn money, it is a fraction of what is actually deserved. Fair Trade practices help to eliminate the need for child labor because workers earn fair wages.

5. It allows small business owners to become internationally competitive.Small cooperatives and business owners who become certified as Fair Trade can become instantly competitive with large businesses on the international stage.

Disadvantages

1. There are natural limits to the success that can be achieved. Fair trade cooperatives can do a lot of good for a community, but ultimately their success is naturally limited to the local population centers where workers are. This can create divides within a community because some workers may not qualify to be part of the cooperative and may not receive the many benefits that coop workers are able to receive.

2. There is a limited customer base around the world. Because the fees are high and because workers earn competitive rates, Fair Trade products have a premium price associated with them when compared to “regular” products that fall outside of this type of market. The higher prices weigh on consumers who are living paycheck to paycheck, usually causing them to choose a cheaper product of similar quality.

3. The amount of product choice is greatly reduced. There are two primary products people purchase when it comes to Fair Trade goods: chocolate and coffee. Although there are numerous other goods that are available for sale, these niche products don’t have a very large market.

4. Big customers aren’t generally attracted to the Fair Trade model.

The biggest buyers of products in the world today are looking at the overall cost of their inventory purchase. If factory farming and assembly line production can create goods that are of a similar quality for a price that is 20-30% lower, then the big buyers will purchase the cheaper product.

5. There is no drive to create better efficiencies.

If there is a guaranteed minimum price, then there is no real motivation to improve the efficiencies of production processes. Ultimately this means the consumer is paying more for something without just cause.

Conclusion. The Fair Trade adv and disadv show that we need to make sure unethical practices no longer stay out of sight. Instead of putting an emphasis on cheap goods and services, we should be placing a point of emphasis on the working conditions of those who are producing what we are using. Far too often cheap prices exploit these workers. Fair Trade practices may not be perfect, but they do help to stop the practice of free market exploitation.