Category: Fair Trade Arguments

Hi everyone, this isn’t part of the Fair Trade Argument Series, but part of it will be. Rather, these are some thoughts I have had today about how Fair Trade is often incorrectly perceived, as well as some attitudes that I don’t much agree with or like.

Patricia Kumar (@PatriciaKumar) is an advocate of Fair Trade and is trying to convert her town, Blacktown in Australia, to a Fair Trade town. She has been met with some resistance in converting her local council. Some of the quotes from the council debate are included below with my thoughts surrounding them. Please feel free to comment, and ENJOY 🙂

“There is nothing we can do, these issues are too big for us to deal with as a Council, we do not have the power to act on this”  (Alan Pendleton, Labor Councillor)

Councils do not have the power to act alone, agreed. But the council is a leader in the community, they can inspire a movement, they can create the environment for a change to happen on a large enough scale. We don’t expect the council to go about being fair trade alone, but we do expect it to be the leader in our communities.

“We know international aid never truly goes there without someone taking a bit from the top” (Alan Pendleton, Labor Councillor)

Firstly, fair trade and aid are not the same. Aid is free money given to governments (often with high levels of corruption) with no constraints and terms of use for that aid. In other words there is no monitoring of that aid; where it goes and to what uses, so it becomes inefficient and, essentially, useless. Aid has had no effect on GDP per capita in developing countries.

Fair Trade on the other hand is a business mechanism. Fair Trade encourages communities and people to start businesses, make money for themselves (which they appreciate and value higher than aid/giveaways), and choose what and how to spend their money. It encourages innovation, leadership and better working and living conditions. It can be seen as an extension of micro-lending, and we have all seen how successful the Grameen bank has been in boosting the Bangladeshi economy.

Fair Trade is about supporting those third world producers, giving them a platform to trade on with the rest of the world. Regardless of whether someone is “skimming”, as long as we support those producers we are doing the world a service.

“We have Fairtrade principles and therefore there is no point in seeking accreditation. We have one of the most ethical procurement guidelines around, we are doing our fair share. Yes, we can do more and we will but we don’t need to be part of the Fairtrade association for it” (Stephen Bali, Labor Councillor)

It is great that the council has Fair Trade principles, but there is a way to prove that, and show case that to the community. By becoming a registered and active member of Fair Trade Towns, the council can display its support of fair trade to the public, and to their communities. In fact, being part of the association and becoming a labelled organisation, the council is being recognised for their commitments to fair trade. I mean why go through all the effort of committing, and not ask for the recognition, right? Become a member, and lead your community in ethical purchasing and fair trade principles.

What do you think? Should the council be a leader for their community? Or should they wait for the community first?


I wanted to discuss Aid and Fair Trade.

Developed countries advocate Aid as a solution to poverty’s problems in developing countries. Has it been working? No.

It is merely a political propaganda to keep the general population happy in those developed countries. If the public thinks that their government is helping with poverty they won’t stand up and shout.

Aid has benefits, but it hasn’t really had any impact on developing countries’ living standards or GDP per capita. This is perhaps because of two reasons: 1) much aid is given to governments who have high rates of corruption, and 2) aid is not monitored (the money may not be distributed to the best industries/regions/uses).

Aid has its flaws. Perhaps the easiest way to empower a country is to empower its people. By encouraging trade with developing countries and giving them a level playing ground, they can earn their income. This will allow the income to be distributed as freely and fairly as possible, and be spent on those things which matter most to the people/the country.

What I have found is that the people, who are in most need of money, would prefer to earn their incomes rather than be given free money. They often  choose to spend it on educating their children. This to me seems like a worthwhile cause. Fair trade advocates earning money, whereas Aid is like free giveaways. Fair Trade is sustainable, Aid is a waste. What do you think is the better solution?

If you want to watch an interesting talk about how Aid funds are actually used versus how they should be used, try this video by Esther Duflo – Social Experiments to Fight Extreme Poverty.

For many of us Fair Traders we come across some skeptics. While their arguments may be strong, here is the first argument you can use to prove that Fair Trade is valuable. Happy reading and arguing 😛

The argument of fair trade versus free trade is now obsolete. Fair trade is free trade, the difference being that, now, it is the consumers who are driving the market – forcing corporations to make ethical production and purchasing decisions all the way down to the extraction of raw materials. Your first argument for fair trade is thus “Free Trade is Fair Trade”.

Free trade suggests that markets should be allowed to choose their sources, and minimise costs without any limitations. Trade will continue to be free, but the only constraint a market will now have will be that which its consumers place on it. If you don’t do what your consumers want, you will fail. You can, you must, tell your company what to do – act and choose ethically.

And that is exactly what is happening. People all around the world are refusing to buy from companies with unethical practices, switching to those companies that truly care about the people involved in their products. The question that companies now face is: “If I am losing business to an ethical competitor, why haven’t I switched to an ethical source yet?”. The latest big change to Fair Trade sources is Cadbury’s switch to FLO certified cocoa for their Dairy Milk chocolate. Well done Cadbury! Check out this link for more info.

When iPod skins cost $0.19 to manufacture (including packaging) why do we pay $12 retail? Why not give the producer a fair price? I am still happy to pay the $12, but I don’t want the hidden cost to be the suffering of someone else.

Their argument: Normal market mechanisms determine a market under the free trade methodology. Companies make choices that lower the costs to the economy and the resources of the world. Free trade is efficient!

Your Argument: Consumers’ demands are a normal market mechanism, so Fair Trade is exactly that, a free trade market. It no longer means minimising costs, it means making sure the consumer is happy with the choices you make. Efficiency is important in our world, we just don’t have enough resources. But we don’t want billions of people to suffer just in the name of efficiency. We choose fair trade, we want ethical practices to be used, so if you don’t want to be ethical, then we won’t buy from you!

Make a Fair Trade Choice today.

Questions of the day: How does poverty make you feel? What do you think of the current solutions to poverty?

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