Fair Trade Labels: A Good Step?

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Fair Trade Labels: A Good Step?
Anneke Zwart, Moderator
Efforts to produce fair products have started long ago. In the late 18th century, attempts to boycott sugar from the West Indies were already made to fight against slavery. Today, the fair trade movement aims to provide a ‘fair price’ to those that are sometimes seen as the ‘victims’ of globalization, the poor.
In the past decade, the share of fair-trade labeled products that were sold increased significantly. But, how ‘fair’ are those fair-trade products really?

N.S. Sylla (2014) is skeptical in terms of fair trade labels and products. According to him, many fair-trade products represent marketing success instead of truly contributing to helping the poor out of poverty. He calculates that for each dollar paid for a fair-trade product by American consumers, only 3 cents extra is going to the country it came from compared to an unlabelled alternative. So, where did it go wrong?
Mr. Sylla argues that it went wrong once the fair trade movement entered mainstream consumer markets which lead to competition within this specific market. Organizations started to see that one could take advantage of the growing conscience among consumers. Organizations could capitalize on market opportunities on the fair trade market, that resulted in the growth of a whole new market consisting of fair trade certification and licensing.
However, the growth of those labels and certifications/licenses increased confusion about the definition of fair trade. Are products fair trade if they do help the lower middle class but do not help the poorest of the poor? Are fair trade labeled products made in well-developed countries ‘fair’ if only a very small portion of the benefits is flowing into the poorer countries?

In my opinion, the fair trade movements is a step in the right direction. Consumers and producers recognize the need of a more equal distribution of wealth. However, the rising consciousness indeed creates the possibility for producers to take advantage of the increased awareness of consumers by focusing more on the marketing than on truly taking actions in terms of fair trade. The solution to the still existing bad practices like child labor and slavery will not be fair trade alone. Other measures are still needed to hold producers accountable for unfair practices.

⇒ To what extent do you think that the fair trade movement truly contributes to the decline of unfair practices and helps the poorest out of poverty?

“Fair Trade: Good Thing, Or Bad?” The Economist (2014)
“About The Fair Trade Scandal: Marketing Poverty to Benefit the Rich”, Ndongo Samba Sylla. Translated by David Clement Leye


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