FAIR TRADE IS COUNTERPRODUCTIVE – AND UNFAIR

David R. Henderson

Economic Affairs, 2008, vol. 28, issue 3, 62-64

Abstract: Fair trade – paying a price premium for commodities based not on quality but on employment and other conditions – is counterproductive and unfair. It results in consumers getting a lower‐quality product. Much of the gain from the price premium goes to the fair‐trade bureaucracy rather than to the producer. Fair trade may even, if effective, destroy the banana industry. A better solution for consumers and third‐world producers is to abolish all remaining trade barriers.

Date: 2008
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