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Fairtrade

Fair Trade aims to give a better deal to small-scale growers and producers disadvantage in globalised markets. It targets primarily marginalized independent growers and producers in the world's poorest countries, fair trade ensures they receive payment above the market price and includes an additional premium to support producer development programmes.

The Fairtrade Foundation, which was set up by the Catholic Fund for Overseas Development (CAFOD), Christian Aid, Oxfam, Traidcraft Exchange, New Consumer and the World Development Movement, awards a consumer label - the FAIRTRADE Mark. This mark demonstrates that internationally recognised standards of fair trade have been met.

DFID supports a number of fair-trade initiatives and has recently provided a grant of £750,000 to the Fairtrade Foundation that will extend the benefits of fair-trade to more producers in the South and help it respond more efficiently to the number of companies wanting to use the Fairtrade mark.

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Free trade

Free trade refers to free movement of goods and services without payment of any taxes or limits from quotas or other administrative barriers. Countries can charge a tax to all imports crossing their border. This increases their final price. They can also impose limits on how much of a certain product is allowed to enter the country. This controls the quantity of imports. In addition, they can require heavy procedures for products to cross borders e.g. licenses or inspection by customs officials. If trade was completely free, there would be no such taxes or restrictions placed on trade. The UK government does not support completely free trade, favouring instead the gradual dismantling of trade barriers as opposed to removing them in one go.

See Fairtrade

Last updated: 4 October 2005

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