Fair trade is counterproductive and unfair: rejoinder

Abstract

This is a rejoinder to a criticism of Henderson (2008) by Alastair Smith. Our conclusion is that Henderson’s basic case, although nicked around the edges by developments since the original was written, still stands. Moreover, we point out that Smith’s criticism of Henderson’s point that Fair Trade could help kill the banana actually supports Henderson’s case. Finally, Smith’s proposed ‘trade, not aid’ solution does not contradict Henderson (2008). Refusing to buy Fair Trade coffee and other products and, instead, buying quality coffee and other products would not reduce trade, as Smith seems to imply.