Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade

Abstract

This paper explores the proliferation of Fair Trade organizations, their products, services and client groups in order to establish the impact of this movement. Although small in volume, alternative trade represents a unique response to the relentless pursuit of free trade through the GATT/WTO process. The economic underpinnings of both Fair Trade and subsidy programs in general (such as the EU's Stabilization of Exchange system) are evaluated. Ultimately, alternative trade can provide significant assistance to targeted groups within developing countries, including gains in production and export proficiency. On the negative side, Fair Trade is likely to prolong the dependence of developing countries on products with poor future prospects.