Fair Trade is Counterproductive and Unfair

3 Pages Posted: 12 Sep 2008

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David Henderson

affiliation not provided to SSRN


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

Henderson, David, Fair Trade is Counterproductive and Unfair. Economic Affairs, Vol. 28, No. 3, pp. 62-64, September 2008. Available at SSRN: https://ssrn.com/abstract=1266917 or http://dx.doi.org/10.1111/j.1468-0270.2008.00847.x

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