Is there such a thing as fair trade Essay Example | Topics and Well Written Essays - 1500 words

Is there such a thing as fair trade - Essay Example hough fair trade is often regarded as simply as reform initiative, it becomes apparent that Fair Trade is an intervention in the market to mitigate social exclusion, alienation, and economic inequality that uses the productive means of the communities instead of charity. Fair trade has its roots not only in civil society organizations but also includes private sector participants. Critics of corporations may be skeptical to the engagement of profit seeking firms but they offer potential to expose the broader society to Fair Trade products through shelf space in supermarkets and possible future advertising and educational promotions. In the following sections, I offer evidence from the involvement of MNCs role in shaping and formulating economic policies that hinder effective implementation of Fair Trade principles. Thus, through these evidences and in the absence of implementation of these principles, I argue that there is no such thing as Fair Trade, especially when we consider it i n the context of globalization and the role of MNCs. In the past two decades, MNCs have emerged as the dominant player in many industries. In the food industry, where Fair Trade is active, the top five parent companies of roasted and instant coffee (Nestle, Phillip Morris, Sara Lee, Proctor & Gamble, and Tchibo) control about 70% of the market1 and the banana industry is dominated by three oligopolies (Dole, Chiquita, & Del Montel) that control over 65% of the market. In 2003, these three companies had 56% of world banana export shares and 80% of export shares in Central America (FAO, 2003) Economics of scale enable MNCs to reduce the costs of manufacturing and lower prices to benefit consumers but they can also provide the basis for concentrated markets such as an oligopoly with high prices and monopsony power. Evidence of the power of MNCs is seen in the vertical integration where MNCs own banana plantations and control packaging, shipping, importing, and ripening to closely control