The Fair Trade movement is rapidly becoming an emerging and dynamic strength to respond to the negative influence of globalization, or rather, to the contemporary international trade injustice. While on the other hand, there is criticism on fair trade, claiming that fair trade is not fair and it goes against free market theory. This term paper aims at introducing the development of fair trade, justifying its economical and ethical significance on the international trade and production chain, and also reflecting on its limitations from different respective.
The term paper is structured starting from conceptual framework, which focuses on defining the term of “fair trade”, introducing the related international organizations, and a brief overview of its current development. And then, the paper takes a close look at how fair trade functions under its own standards and price system. Furthermore, both the benefits and criticism of fair trade on producers, consumers and the intermediary are discussed, finally the conclusion is defined that fair trade is an effective marketing exercise but is not the mainstream market model.
Although there is no universally accepted definition of fair trade, Fair trade Labelling Organisations International (FLO) most commonly refer to a definition developed by FINE, an informal association of four international fair trade networks (Fair trade Labelling Organizations International, World Fair Trade Organization - formerly International Fair Trade Association, Network of European Worldshops and European Fair Trade Association): fair trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South. Fair