Talk:Fair trade/Archive 1

message: I think it's time to disambiguate Trade Justice and Fair Trade... the article itself is very confusing as both concepts are used interchangeably. I think part of the article should be moved to the Trade Justice entry. What do you all think?
--Quebecois1983 13:44, 13 July 2006 (UTC)
replies: text: Agreed. It's about time to disambiguate this page. I just moved some parts to the Trade Justice page. Bonner5 19:53, 25 July 2006 (UTC)
thread_title:  Trade Justice vs. Fair Trade 

message: I have just made some major edits to the article: much of the information I removed was incorred or inappropriate. Fair Trade has a universally adopted definition: it was developed by FINE a couple of years ago and is widely recognized throughout the Fair Trade movement  - I added this definition to the first paragraph and adapted the text. 
I also rewrote the section about Fairtrade certification and labelling - again, much of the information was incorrect or outdated. The International Fairtrade Certification Mark,currently used in 18 countries, was not even mentioned! I also deleted the short paragraph about Transfair USA and replaced it with more "international proof" references to Fairtrade Labelling Organizations International (which Transfair USA is a founding member of).
And finally, I reorganized all the links. It was quite a mess... legitimate links were mixed with commercial ones etc. I created new categories such as Fairtrade Towns, Publications, ATOs etc. in order to better classify everything. I deleted all commercial links but left ATO links (such as Oxfam, Lutheran Relief etc.) since ATOs have played quite an important role in the development of Fair Trade.
Anyway, I hope you all agree with my changes. I am tempted to make some more, as this article still needs serious editing...
-- Quebecois1983 12:32, 12 July 2006 (UTC)
thread_title:  Major Edits 

message: This article has no concise definition of what fair trade actually is. Perhaps that should go at the very beginning?
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I agree with Jan Tångring. Since fair trade seem to have so many meanings, see more in the disambiguation in the article, a more clear division between the different meanings of the term would make the article much clearer.
I thought that fair trade was first used in the protectionist meaning. The fair trade labelling came along later on. I am not sure when the term first was introduced. Protetections in 60's early 70's, or? and the ethical trading in the 80's, or?
--Bedrupsbaneman, 16:11 2005-04-04 (GMT)
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The counterarguments section gets confusing. The text would benefit, I think, if the ethical purchasing form of fair trade and the tariff form of fair trade were debated separately.
--Jan Tångring 17:59, 17 Jan 2005 (UTC)
replies: text: The main ["The main" by whose ranking? How about a simple "An"] argument against fair trade is that the term [you mean "the concept"?] in practice is primarily intended to protect [intentionally? someone wants this?] inefficient industries and that fair trade as conceived of by its proponents would do little to help [to help what?] as fair trade still remains a niche and indeed would aggravate problems of global poverty and social injustice, as not everyone [who, exactly, needs one?] can get a fair trade certification. [why not?]
--Jan Tångring 17:50, 17 Jan 2005 (UTC)

text: Throughout the 1980s and 1990s, most economies worldwide embraced varying degress of free trade, and rejected fair trade measures on the grounds that charging higher prices than the global commodity markets for the goods exported by developing nations would penalize them unduly, denying them hard cash, and preventing them from gaining market share and trusted positions in a supply chain (since varying tax and tariff rates, or worst, complex trade law, would prevent them from competing on an equal basis with developed-nation suppliers).  Critics of fair trade argue that a growing economic inter-reliance of all nations globally also contributes to peace, as suppliers rarely wage war on their customers.
Most of the anti-free trade energy has been focused at manufacturers of finished products.  Commodity goods such as agricultural products remain larged protected and there has been very little liberalization in this area.  Also the problem isn't the complexity of the tariffs, its the size of the tariffs.   
*yes, you're right, it's complexity of trade remedies, e.g. dumping laws, rather than complexity of tariffs themselves.  The manufactured, information, and agricultural sectors need to be better differentiated - that paragraph is saying way too much at once.  I'd stick by the assertion that these are the excuses used to avoid fair trade, but really, it is being enforced by default, e.g. developing nations and the EU and US refusing to negotiate an end to agricultural tariffs.  The commodity-export issue is mostly in timber and non-food crops, which is one reason why rainforests are destroyed:  timber is the only exportable they grow... whereas the food crops that could be grown without destroying the forest, are subject to lots of protection.  OK, I can rewrite this to be closer to your sense of it. 24
*actually, the big problem with this paragraph, even correctly rewritten, is that it has to assume a political economy to say anything sane at all... it verges on macro-economics, whereas the fair trade arguments are "all micro", i.e. about effects at ground level.  So, to be fair, one would need a classical/nationalist, neoclassical/globalist, Marxist/labour-centric and green/resource-centric view of what was going on in the 1980s and 1990s, and that's too much for this article.  A separate article on export strategy or industrial strategy should go into this in detail, but not here... if anything is said here it should be along the lines of "how legacy agricultural subsidy and protectionism constitute an informal set of resistance to free trade measures, especially in land and agriculture" 24
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I don't think this article is terribly good as it stands. It's largely criticism by nutcase free market-obsessed americans. Could we mention something like this: http://www.maketradefair.com/go/uscotton in the stuff about why fair trade is better?  -- Tarquin 09:22, 22 Aug 2003 (UTC)
thread_title: Just pointing something out

message: Restructured to clarify distinction and relationship between fair trade in general and fairtrade labelling; there's still a case the entire Fairtrade labelling stuff should go into that article (but that's currently short and sweet so I'm reluctant). Also primary-topic disambiguation. There's clearly more to be said about non-fairtrade labelling aspects; but removal of the straw-man discussion of import-taxation is a start for developing something useful. Issues include the role of international standards (eg ILO), including enforcement issues; role of WTO (including nontransparency of dispute resolution); expansion of agricultural subsidy issue (see trade and development); role of developing-country protectionism (eg Dani Rodrik on sequencing and need for institutional development, experience of China and the Asian Tigers, etc); abuse of "fair trade" argument by domestic producers in rich countries (see Cato Institute external link). Rd232 21:54, 17 Jan 2005 (UTC)
replies: text: Please confirm that you actually read what I wrote above, before I take this silliness to RFC. It certainly doesn't look like you did. To reiterate: it is POV to insist, against the "fair traders" position (as well as objective fact - see eg trade and development), that current international trade practices are "free trade". Rd232 21:06, 6 Feb 2005 (UTC)

text: Hm, your position is clearer to me this morning. Your characterisation of fair trade is US-centric - all about the interests of US producers, who want (additional) protection from overseas competition. But as important (and more prominent in international usage of the term) are the interests of developing countries' producers, who a face a system which is not free trade, but is actually rigged against them. So in this case fair trade is not about "we shouldn't have free trade because it's unfair", but "we shouldn't have what there is now, which is trade biased against the poor, which is unfair". My formulation covered all of this quite adequately and neutrally. Rd232 09:32, 7 Feb 2005 (UTC)

text: Thanks for your reply. Rd232 21:30, 6 Feb 2005 (UTC)
thread_title: Restructure

message: Okay people, i've completed a rough draft of my proposal.  I do remind that it is a draft and there may still be some points within it that do not conform to wiki standards.  But that's my whole point of posting it here first, before i post it in the article.  I tried my best to have a neutral POV, so make sure you read the whole article before you start a flame war on me  :)
The draft is sourced (virtually entirely) from:
Yanchus, D. d. V., Xavier (2003). "The Myth of Fair Prices: A Graphical Analysis." Journal of Economic Education Vol.34 (No.3): p235.
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This graph shows how these inflated fair prices impact on the countries that export to developed countries.  To explain this graph in a practical sense the production of coffee, from South America, being exported to the developed world will be used.
The thick curved black line, joining the two axis’, depicts the developing country’s Production possibility frontier (PPF) line.   This line depicts the maximum amount of production possible of coffee and “other goods” in those countries.  
Image:Fair Pricing.JPG
Obviously, with the payment of fair prices for coffee we see the price of coffee rise in relation to other goods produced in the developing country.  When we see such increases in relative prices we see that more resources will be allocated to the production of coffee, away from production of other goods.  When we see such activity, we will observe the economy shifting its production away from using the domestic price ratio line (denoted by the red line), to the international price ratio (denoted by the green line).
The effect of such a change would mean that the coffee producing countries would shift their optimum consumption from indifference curve Y0 to Y2, yielding the tangential points of A’ to B’.   With such a shift in resources we see that the country exporting the coffee will be unambiguously better off, since Y0 is preferred to Y2.   (Yanchus, D; de Vanssay, X, 2003)
This argument holds the basis that most fair price advocates claim, and indeed their arguments are justified in that these exporting countries are undoubtedly better off. 
With the case of fair trade there are several economic problems that need to be addressed.  Referring back to graph we saw that the exporting country gains an unequivocal advantage from the implementing of fair prices.  The first cost, to the importing and developed countries, derived from graph is the fact prices the fair price for coffee is higher than the market determined price.  For simplicities sake, it is assumed that that producer who is being paid the fair price is sufficiently small that world coffee prices do not change as a consequence. (Yanchus, D., de Vanssay, X., 2003).  This artificial increase in price can merely be seen as a donation, per unit sold, to the growers of the coffee, and theoretically we can see that the revenue raised from these fair prices is equal to the distance between U and T.  This is seen as cost to the consumers of the coffee in the developed world, which is a cost that fair trade advocates are more than happy to deal with.
The second cost component results from the change in the actual price of coffee itself. Since consumers, in the developed world, have increased the price paid for coffee it results in an increase in the export price received by the targeted growers.  This leads to a shift in productive resources towards the production of coffee, and away from that of other goods.  In the graph this is shown as a shift from production at point A to B. The value, in terms of world prices, of the new production point B reflects world resource costs.  Initially, the economy was producing at point A, and since the change we see a new, and lower, point of production at point B.  As a result, the value of production of other goods has decreased from 0U to 0V. In summary, the second cost component to the rest of the world of fair pricing comes from the increase in the production of coffee sold at fair prices, which is equal to the distance between V and U.  Therefore, as a result of fair prices the total direct cost to the developed world, in terms of output, is equal to the difference between V and T.
There is also a third cost of fair pricing, which is often overlooked.  This cost comes about by the fact that the producers that gains from the fair prices increases their production of the good, and as a result force non-targeted producers to reduce their production.  This can be assumed simply because of the fact that coffee, like most foodstuffs, shows inelastic demand characteristics, and as a result targeted producers are benefited, but non-targeted producers miss out.
These costs, just explained, seem to be merely external costs, or costs imposed on developed countries or countries not targeted by fair prices.  This seems to push the point that fair trade is better than free trade.  However, there are also costs incurred by the country receiving the fair price.
The first internal cost of fair pricing would be the fact that industries, other than coffee, and industries in other non-targeted countries would be neglected.  The reason why this is is because returns for coffee growers will increase, and as a result demand for land, water and other essentials will increase.  Basically, what this does is crowd out competing producers, who also compete for the land and water.  Industries such as the fruit and vegetable growing industries would lose as they would be forced to move to less productive land, and will be forced to compete for resources such as water. 
Secondly, the other cost of fair prices would be the fact that supported producers tend to become dependant on the premium prices paid for their goods, and if attitudes and preferences were to change, in the developed world, then we would see producers being unable to sustain themselves at the lower market driven prices.  As a result this dependency also creates is the fact that the country’s long-term comparative advantage is distorted.
Fair trade advocates claim that even if there are potential costs imposed to developed nations by fair prices there are still equity issues that need to be addressed, and that it is for this reason that fair prices are justified.  However, there are other options available, which are much more economically sound, that yield the same improvements in equity.
Such options include the fact that instead of paying fair prices, developed nations can simply pay one-off donations to these exportign countries, which yield the same utility for the exporting countries, but at a lower cost than fair prices.
Referring back to he graph we see that utility had increased from Y0 to Y2 and as a result the country seemed better off.  The cost of paying these fair prices was equal to the distance between V and T.  If developed nations were to transfer a once-off donation in order to yield the same utility then the cost of this transfer would be the difference between U and T.  The outcome of the transfer is the same as paying fair prices, yet it is cheaper to do so.
Another benefit of using this method rather than fair pricing is the fact that once-off transfers do no discriminate against certain producers, as we saw with coffee growers being benefited and fruit and vegetable growers missing out.  This happens because such donations would create no price incentives.  We must also assume that distribution costs and corruption is minimal in order for this assumed benefit is to hold.  Some may say giving a donation to the running government of an LDC could mean that not all of those donations would reach their intended recipients, due to corruption etc.  However, international organisations such as World Vision generally distribute such donations with costs and corruption that are aimed to be kept at a minimum.
Thirdly, unlike the situation under the system of fair pricing, when using a once-off donation the developing country is not required to maximize its consumption relative to distorted domestic prices, but instead, maximizes its consumption relative to world prices. This allows the developing nation to obtain a higher level of utility.  This increase in utility is show in the graph by noticing the increase of utility from Y2 to Y1.
And finally, if donations are used instead of fair prices we see that prices will not be distorted and as a result we eliminate the cost of non-targeted industries changing their production process (i.e. the costs of moving to less productive land).
Dupz 05:59, 15 October 2005 (UTC)
replies: text: Your section is bigger than the article itself. A summary in Fair trade#Criticisms of Fair Trade and a new article with the entire content may be a good idea. Patrick-br 13:33, 17 October 2005 (UTC)

text: *I didnt think of that.. fair point.  Anyone else have an opinion?  Is there any official positions on issues like this (ie. in the style guide or anything)?  I've posted the section in the main article though, hopefully it might attract a bit of more interest there.  Dupz 13:46, 17 October 2005 (UTC)
thread_title: Draft proposal

message: I've twice removed a link to eshopafrica.com added by an anon as being too commercial. Obviously, because of the subject at hand, most of the organisations listed are involved in commerce. Therefore, I suggest that we limit the links to organisations whose websites are more to do with campaigning and issues than selling fairly traded products. I feel that the following links do not meet this criterion:
*One Village
*Ten Thousand Villages
I'm going to remove these two links, because I can't justify removing the other unless I also remove these. Please discuss her, if you feel these links, or any other links should be included. --Gareth Hughes 08:40, 27 October 2005 (UTC)
thread_title:  Commercial links 

message: I just deleted Stevertigo's comment saying fair trade was developed in opposition to free trade. The Fair Trade industry of labelled and unlabelled goods is actually philosophically aligned with free trade, as Fair traders are after all helping disadvantaged producers access Northern markets. Fair traders are thus often opposed to all types of protectionism... please let me know if you disagree with this interpretation. I do suggest however moving your comment to the trade justice page. Quebecois1983 21:44, 15 August 2006 (UTC)
thread_title:  Free Trade vs. Fair Trade 

message: THis article needs some discussion about criticism of the fair trade movement. I'm not an economics expert, but this  link  does give a rough explanation of the positions for and against fair trade. Borisblue 21:30, 24 September 2006 (UTC)
replies: text: I just added a criticism section - what do you think? I hope this helps! Vincentl 22:22, 24 September 2006 (UTC)
replies: text: Looks excellent. Borisblue 23:51, 24 September 2006 (UTC)
thread_title: NPOV?

message: I just reverted the changes somebody made to "labelling" throughout the article. Although it is common in the US to write labeling with one "l", this practice is not customary in the UK and elsewhere. I think since we're talking about Fairtrade labelling here, we should maybe use the same spelling as the authority on the matter, Fairtrade Labelling Organizations International (see their website at [www.fairtrade.net]). Anyone, please, before changing the spelling again, debate it first on this discussion page. Vincentl 20:11, 5 October 2006 (UTC)
thread_title:  American English vs. British English