Fair trade- how good is fair trade - Essay Example

Running Head: Fair Trade- How good is fair trade Fair Trade- How good is fair trade of the appears here] ofthe institution appears here] Fair Trade- How good is fair trade The concept of 'fair trade' is now well established as a way of describing relations between the UK and countries in the developing world. This approach is intended to be ethically sound, to ensure that producers receive a price that reflects their real costs, a reasonable amount of profit for living expenses, and funds to reinvest in building a healthy business. Consumers are rewarded with good quality produce at a price that does not exploit the people producing the goods. But what's this got to do with care The Office of Fair Trading (OFT) - the consumer watchdog - recently published a report on the inquiry it conducted into the functioning of the 'care homes market' (OFT 2005). That inquiry had resulted from a 'super complaint', made by a consortium of voluntary organisations (Bright 2004). The findings cover: * availability of information to assist people in making informed choices * uneven levels of advice and support for older people and their families * lack of transparency about fees and the services provided * unfair contracts * access to complaints systems. Around 70 per cent of the 410,000 care home places currently occupied by older people are paid for by a combination of care budgets and individuals' state retirement pension. Residents are then left with a personal expenses allowance of 18.40 per week, to cover all their personal wants and needs that aren't included in the fees, such as newspapers and magazines and other small outgoings such as birthday cards, stamps and gifts. Older people whose assets exceed 20,000 must meet all their care costs until they reach that point, at which they then become eligible for state help. The OFT found that around 20 per cent of homes charge older people who are self-funding a higher weekly fee than publicly-funded residents for similar rooms and services. Some commentators, including this one, suggest that this happens because homes need to subsidise the inadequate fee levels received from public sector purchasers. No wonder people are so resentful about paying for care - not only do they feel penalised for having saved, they also pay a premium for being capable of meeting their own costs, and allow local authorities to carry on paying less than the full cost! Looking for a care home is not easy. People are often doing so under time pressures and in the wake of huge emotional upset. So they need as much information as possible, not least about how much it will cost. The report recommends setting up a one-stop shop specialising in care home information, and this, along with the recommendation that regulations should be amended to make clearer price information a requirement on homes, could make a big difference for many vulnerable people. Those who are meeting their own fees will then see that the home they are considering charges self-funders more than those who are placed by local authorities. And families searching for a home for someone who qualifies for local authority support will also be able to see that there are few - if any - homes in the locality that are prepared to take publicly-funded residents without recourse to the family 'topping-up'. The need for a 'third party top-up' often means that the price the local authority has set is insufficient to enable the home to operate. So this move towards greater transparency will go some way towards creating 'fair trade in care' and may, for some homes, make the difference between carrying on in business or closing, making existing residents homeless and reducing choices available to future generations. I am optimistic about the scope for change and improvement. But I should not get too carried away, as there is evidence that a very large number of people have either no contract, or one containing unfair terms. And this is despite an earlier study (OFT 1998) identifying contractual problems, and the inspection system having been reformed and strengthened twice in the intervening period So let's take the values that influence our coffee buying - supporting growers in Central and South America - into the field of care. Whether we are purchasing, providing, inspecting - or visiting a friend or family member - it makes sense to think global and act local! Is free trade ever fair trade Every one of us has probably seen reports or heard something about demonstrations against globalisation when international organizations like the WTO meet. One example was the G8 meeting in July 2001. So we have to ask us the question why there are some people who protest against globalisation and also against the free trade the WTO stands for. The main complain and concern of these groups is unfairness. They say free trade is unfair, the low wages are unfair, the poor working conditions of foreign workers, the environmental standards in less developed countries, the high profits of multinational corporations, the inequality in incomes around the world, everything is unfair. If these reproofs are true it would mean that also free trade and globalisation is unfair. However the people of international institutions and multinational corporations who are in favour of free trade and globalisation also use the term fairness in their arguments. If a multinational company pays low wages in less developed countries, they can claim that the wages are still fair set because they are above the legal minimum wage standards and that the workers would not get a better opportunity in a company of their country or their government. The WTO and other international organisations consider free trade even as help because it will promote economic growth, which in turn will raise the living standards throughout the whole world and reduce also the income inequality in the future. They suggest that globalisation can promote better outcomes for many people what makes the free trade fair. Both sides, either supporting or depreciating free trade predicate that what they think and support is fair. Of course everyone is in favour of fair trade, nobody could ever proclaim the opposite. But how can supporters of two opposed policies both be in favour of fairness. The truth has to be somewhere in the middle. In my opinion there are certainly some or even many aspects of free trade, which are unfair. Those who support the free trade are certainly the international corporations and the rich. Due to free trade the wealthy companies can force some small companies down. If they sell their products at a price that is less than it's cost of production and this way undercuts the competition for a sufficient length of time, the competition will be forced out of the business, because everybody would demand the product with the same quality but lower price. When there is no competition anymore they can raise their prices again and be able to recoup their losses. That's of course unfair for the smaller companies, which are not able to use this strategy and go to bankrupt because of it. So developing countries have to allow big business access to their markets. Another point, which is true and doesn't support the free trade policy, is that in cases of deciding whether to protect the environment or to encourage trade, the WTO tends to decide in favour of trade. There have been many examples for that issue. Yet the WTO allows trade to continue however there is no proof if a product is safe until it is proved unsafe. That issue should be handled the converse way, because environment and health is definitely more important than economic profit. So in this case the free trade policy of the WTO is unfair and not correct towards the environment and the population. A dramatic aspect showing the unfairness of free trade is the unequal income and wealth. The rich are getting richer and the poor are getting poorer, at least relatively poorer. Fairness in trade and globalisation would mean that the rich would need to redistribute some of their wealth and income to the poor, or that the poor would need a higher percentage of the income of their nation. But free trade doesn't only have unfair and negative aspects. For example one point that is considered as unfair of many opponents of free trade is that workers around the world are not treated equal and do not gain wages in developing countries. But why should a man in Africa who has the same profession as a man in the US gain the same amount of many His living cost are not as high as the living costs you have to pay in the USA. So in relation he actually gains about the same wage and is not treated unfair. Also the increasing number of developing countries is a proof for the efficiency of free trade and there are many countries, which has already benefited of the WTO. To come to a conclusion I think that free trade can't be always fair to every country, every economy or every individual and certainly there should be some attempts made of the WTO to become more fairly in some aspects. But it's important to have in mind how difficult the job of the WTO is. They have to show consideration for developed countries and for developing countries, which of course have different interests. Although the developing countries and economies have some disadvantages and not the same influence, power and treatment like the developed ones, they would be worse off without the WTO and if not now, in the future they will profit of free trade. The aim is to develop a good working free trade economy on the whole world without such inequality between some countries, but to achieve this every country has to make some sacrifices. References Bright, L 2004. Buyer beware Nursing Older People. 15, 10, 6. Office of Fair Trading, 1998. Older People as Consumers in Care Homes. London. Office of Fair Trading. Office of Fair Trading, 2005. Cure Homes for Older People in the UK: A Market Study. London, Office of I air Trading. Bibliography ANDERSON, T. and E. RIEDL (2004). Fair Trade: The Scope of the Debate. (Paper Based Publication Pending). 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