I don’t at all doubt the good intentions of those who promote the use of fair trade products, such as tea, coffee, clothing, etc. But as an ethical question, is fair trade really that fair? According to an article by Leo McKinstry in the British periodical The Spectator, the answer is no. In The Iniquities of Fair Trade (April 2005) McKinstry makes the point that “there is nothing particularly fair about ‘fair trade.'”
An enlightening quote that demonstrates his assertion concerns the actual impact of fair trade market values on the very farmers they are hoping to aid:
Because fair trade subsidies ignore market realities and guarantee prices, they encourage overproduction of certain goods, just as the wretched Common Agricultural Policy has done in the European Union. In the coffee market — where the British fair traders are most active — the central problem at present is oversupply, which has forced down prices. So by propping up unwanted production the fair traders are actually driving down prices even further, which increases the economic damage to farmers and workers. It is especially misguided for fair traders to underwrite inefficiencies and poor quality, when the major, low-cost, highly mechanised plantations of Brazil and Vietnam or the specialised, high-quality farms of Central America can meet the world’s coffee demands so much more effectively. Campaigners would do better to encourage inefficient, small-scale coffee producers, especially in Africa, to diversify into other areas.
People have failed to realise that you cannot legislate morality, and when the European Union has set regulations in place informing buyers who they can and can’t buy from they are in effect harming both the farmers and the consumer.
What is interesting to note is that the fair trade advocates are generally of a more socialist or left-wing perspective. This means that they are against a market driven economy. The irony is that they have to utilise the very market they are against to promote fair trade wares.
Another helpful article, that places the fair trade trend in perspective is Katharine Winans Fair Trades Dirty Secret hosted at Lew Rockwell’s site.