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Fair Trade Is Counterproductive – And Unfair

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  • David R. Henderson

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.

Suggested Citation

  • David R. Henderson, 2008. "Fair Trade Is Counterproductive – And Unfair," Economic Affairs, Wiley Blackwell, vol. 28(3), pages 62-64, September.
    • Handle: RePEc:bla:ecaffa:v:28:y:2008:i:3:p:62-64
    DOI: 10.1111/j.1468-0270.2008.00847.x
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    Citations

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    Cited by:

    1. Magdalena Śliwińska, 2022. "Fair Trade a nowa rzeczywistość pocovidowa trzeciej dekady XXI w," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 3, pages 326-348.
    2. Francisco J. Castellano-Álvarez & Francisco M. Parejo-Moruno & J. Francisco Rangel-Preciado & Esteban Cruz-Hidalgo, 2021. "Regulation of Agricultural Trade and Its Implications in the Reform of the CAP. The Continental Products Case Study," Agriculture, MDPI, vol. 11(7), pages 1-18, July.
    3. repec:dau:papers:123456789/5229 is not listed on IDEAS
    4. Alastair M. Smith, 2010. "Lack Of Rigour In Defending Fairtrade: Some Important Clarifications Of A Distorting Account – A Reply To Peter Griffiths," Economic Affairs, Wiley Blackwell, vol. 30(2), pages 50-53, June.
    5. Colleen Haight & David R. Henderson, 2010. "Fair Trade Is Counterproductive And Unfair: Rejoinder," Economic Affairs, Wiley Blackwell, vol. 30(1), pages 88-91, March.
    6. Ryan H Murphy, 2016. "The willingness-to-pay for Caplanian irrationality," Rationality and Society, , vol. 28(1), pages 52-82, February.
    7. repec:dau:papers:123456789/5232 is not listed on IDEAS
    8. Claire Chambolle & Sylvaine Poret, 2013. "When fairtrade contracts for some are profitable for others," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(5), pages 835-871, December.
    9. Alastair M. Smith, 2009. "Evaluating The Criticisms Of Fair Trade," Economic Affairs, Wiley Blackwell, vol. 29(4), pages 29-36, December.
    10. Peter Griffiths, 2010. "Lack Of Rigour In Defending Fairtrade: A Reply To Alastair Smith," Economic Affairs, Wiley Blackwell, vol. 30(2), pages 45-49, June.

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