Fair Trade Price

AAA

DEFINITION of 'Fair Trade Price'

A minimum price paid for certain agricultural products imported from developing countries. Fair trade is a movement which believes that it is unethical to pay producers in developing countries the market price if it is too low to provide a sufficient quality of living. Instead, certain importers agree to pay producers in the developing world at least a minimum price for their goods. The goods are then imported to developed nations where they are promoted as fair trade products, and normally sold at a higher price.

INVESTOPEDIA EXPLAINS 'Fair Trade Price'

For goods to be labeled as Fair Trade Certified, they must comply with regulations outlined by the organization FLO-CERT and/or other local fair trade labellers. Opponents of the fair trade system argue that establishing a price floor results in oversupply. It is argued that this oversupply can actually lead to lower market prices for producers that are not able to sell to fair trade buyers.

RELATED TERMS
  1. Administered Price

    The price of a good or service as dictated by a governmental ...
  2. Trade War

    A negative side effect of protectionism that occurs when Country ...
  3. Wholesale Trade

    An economic indicator that measures the value in U.S. dollars ...
  4. World Trade Organization - WTO

    An international organization dealing with the global rules of ...
  5. Socially Responsible Investment ...

    An investment that is considered socially responsible because ...
  6. Trade

    A basic economic concept that involves multiple parties participating ...
RELATED FAQS
  1. What are examples of businesses that exhibit social responsibility?

    In the 21st century, companies that exhibit corporate social responsibility are winning high marks from consumers and investors ... Read Full Answer >>
  2. Why is social responsibility important to a business?

    Social responsibility is important to a business because it demonstrates to both consumers and the media that the company ... Read Full Answer >>
  3. Why are business ethics important?

    Several factors play a role in the success of a company that are beyond the scope of financial statements alone. Organizational ... Read Full Answer >>
  4. How important are business ethics in running a profitable business?

    A number of factors play a part in making a business profitable, including expert management teams, dedicated and productive ... Read Full Answer >>
  5. How do business ethics differ among various countries?

    Business ethics is the study of business policies and practices, such as corporate governance, insider trading, bribery, ... Read Full Answer >>
  6. What was Rupert Murdoch's role in the wiretapping scandal?

    According to Rupert Murdoch, he had no direct role in the wiretapping scandal involving the now-defunct news tabloid “News ... Read Full Answer >>
Related Articles
  1. Economics

    Exploring The Current Account In The Balance Of Payments

    Learn how a country's current account balance reflects the country's economic health.
  2. Personal Finance

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.
  3. Forex Education

    Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
  4. Fundamental Analysis

    An Introduction To The International Monetary Fund (IMF)

    Chances are you've heard of the IMF. But what does it do, and why is it so controversial?
  5. Economics

    What Is The World Trade Organization?

    The WTO sets the global rules of trade. But what exactly does it do and why do so many oppose it?
  6. Investing

    How Counterfeiting Affects Alibaba's Business

    We examine the source of Alibaba's counterfeit products and their effects, as well as the ways Alibaba is fighting back.
  7. Taxes

    What's an Audit?

    An audit is an objective examination of accounting records that makes sure the records are a fair and accurate representation of the transactions they claim to represent.
  8. Economics

    What is Price Discrimination?

    Price discrimination occurs when a company charges different customers different prices for the same goods or services.
  9. Economics

    What Does Asymmetric Information Mean?

    Asymmetric information describes a situation where one party in a transaction knows more than the other.
  10. Economics

    Understanding Money Laundering

    The process of creating the appearance that large amounts of money obtained from serious crimes actually originated from a legitimate source.

You May Also Like

Hot Definitions
  1. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  2. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  3. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  4. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  5. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  6. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!