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MA Thesis Proposal Fair Trade and the Moral Obligation it Generates By Yodahe Tesfaye Lamore Submitted to Central European University Department of Political Science In Partial fulfillment of the requirements for the degree of Master of Arts Supervisor: Professor Andrés Moles Velázquez CEU eTD Collection Budapest, Hungary (2012) Acknowledgement My biggest gratitude goes to Professor Andres Moles for supervising my thesis and giving me valuable comments and directions. I would also like to thank my beloved wife, Hermela, for being a great support throughout the thesis writing process. CEU eTD Collection i Abstract In this thesis, I explore whether Fair Trade is ‘working’, and if so, if consumers have moral duties to purchase fair trade products? I argue, based on various empirical studies, that Fair Trade has been effective with its major goal of promoting the livelihood of disadvantaged producers. On this premise, and following an act consequentialist moral theory, I further argue that consumers have a duty to purchase Fair Trade products. In response to the comparative objection, that is, what makes purchasing Fair Trade a better alternative to other poverty relief strategies, I argue that it has additional values, namely: avoiding exploitation and prompting non- contributors to contribute. CEU eTD Collection ii Table of Contents Introduction ................................................................................................................................................... 1 Chapter One .................................................................................................................................................. 6 General Overview ..................................................................................................................................... 6 1.1.Historical Overview ........................................................................................................................ 6 1.2. Mainstreaming of Fair Trade ......................................................................................................... 9 1.3. Defining Fair Trade ...................................................................................................................... 11 1.4. Differing accounts of FT: complementary or conflicting with the market system ...................... 14 Chapter Two................................................................................................................................................ 19 Is fair Trade working? ............................................................................................................................. 19 2.1. Does Fair Trade keep producers poor .......................................................................................... 21 2.2. Do producers benefit from the amount that trickles? ................................................................... 24 2.3. Does Fair Trade favor the relatively rich? ................................................................................... 25 2.4. Conclusion ................................................................................................................................... 27 Chapter Three.............................................................................................................................................. 30 Act Consequentialism: A General Discussion ........................................................................................ 30 3.1. Simple Act Consequentialism ...................................................................................................... 30 3.2. Satisficing Consequentialism (SC) .............................................................................................. 35 3.3. The Hybrid View ......................................................................................................................... 37 Chapter Four ............................................................................................................................................... 40 CEU eTD Collection Fair Trade: A Consequentialist Defence ................................................................................................. 40 4.1. Is Fair Trade excessively demanding? ......................................................................................... 43 Chapter Five ................................................................................................................................................ 49 iii Other Values ........................................................................................................................................... 49 5.1. Exploitation .................................................................................................................................. 50 5.2. Argument from indirect benefit ................................................................................................... 55 Conclusion .................................................................................................................................................. 58 List of Reference ......................................................................................................................................... 60 CEU eTD Collection iv Introduction International trade, it is argued, does not benefit everyone in the world. Many people live in poverty, and do not receive a fair income for their labor. This has led to the emergence of the movement of Fair Trade, which aims to guarantee that producers in the global South receive a fair price that not only reflects a commensurate cost of their production, but also helps achieve a socially and environmentally sound production. Fair Trade can be defined as: …a trading partnership, based on dialogue, transparency, and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers— especially in the South. Fair Trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising, and in campaigning for changes in the rules and practice of conventional international trade (FINE 2001) With regards to the Fair Trade movement, a question that is asked by many but not adequately responded to is: Do consumers have moral obligations to purchase the products of the poor farmer elsewhere? This is the central question of the paper. However, the paper also seeks to answer another separate but related question: is fair trade ‘working’? In a sentence, this thesis is set to ask and attempt to reply to the question/s: Is fair trade ‘working’, and if so, do we have a duty to purchase fair trade products? The paper will be divided in two parts. The first part which consists of chapter one and two aspires to deal with the first half of the question, that is, whether fair trade is succeeding. In the CEU eTD Collection first chapter, I will present a historical overview of fair trade, from its inception to its present status of mainstreaming. The definition and goals of fair trade will also be briefly presented. The chapter concludes with an important discussion on two contrasting accounts of fair trade. 1 Researchers of fair trade are divided on their response to the question: is the relationship of fair trade and the global market one of a conflict or is fair trade simply a complementary project aiming for improvements? Some regard it as a temporary measure to be employed where a wider implementation of justice at the global level is lacking (Walton 2010), while the others prefer to think that markets have to be made just by some restructuring and fair trade is here to do this (see Renard 2003).I will argue that fair trade, based on its commonly accepted definition, should be considered as complementary to the global market system. In chapter two, I go through various empirical researches and case studies to see if fair trade is actually working. This should not be confused with the question can fair trade succeed as a system globally? I will avoid this question as it requires an enormous research on its own and appears to be beyond the scope of this paper. I will rely on fair trade’s goals outlined in chapter one to asses if the movement has been able to realize such goals. Among the goals, I will be focusing on the major goal of improving the livelihood of disadvantaged producers. Majority of the impact assessment studies conducted in almost every corner of the world where fair trade operates indicate that the system is actually succeeding particularly in promoting the economic wellbeing of Southern producers. The second part of the paper asks if we have moral obligations and looks for the basis of consumers’ moral obligation to buy fair trade products. I will look in to consequentialist moral CEU eTD Collection theories, particularly act consequentialism. Act-Consequentialism, a major variant of consequentialism, which was popularized by Peter Singer (1972), has been a famous argument with regards to our obligations to the world’s poor. The theory claims that the morally right act is 2 the one that brings about the best possible outcome in terms of the overall good. Such a moral theory is premised on the assumption that since all humans matter equally, the well-being of everyone should have the same moral value. It follows that the morally right act will be the one promoting the well being of every one (Singer
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