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What is Free Trade Coffee?

By Micki Elizabeth
Updated May 16, 2024
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Free trade coffee is coffee that is purchased within or between countries without restrictions from any government. The term “free trade” is often spoken of in discussions of “fair trade," and the terms are sometimes mistakenly used interchangeably. Fair trade coffee comes from developing countries where the fair trade social movement aims to provide sufficient wages and better working conditions for laborers. The free trade model has its proponents and opponents.

This coffee is given no monetary restrictions such as taxes or tariffs. Therefore, proponents of free trade insist that this model allows for lower production costs on the manufacturer’s end as well as the consumer’s end. The logical result may be lower prices on coffee.

Opponents of free trade coffee point out, however, that producers and manufacturers of coffee are not always fair. Though the costs will be lower on their end, they may still charge whatever price they wish in the market. The manufacturers, then, would be the only group to gain from the free trade model. Not all manufacturers may act unjustly, however, nor might they all price fairly.

One major argument against free trade coffee is that, without any type of restrictions from any government, manufacturers are possibly free to treat their laborers as they please. Sometimes, this translates into low wages and dangerous working conditions, because money may not be invested for proper attire or tools. Child labor has also been used in some situations. Furthermore, negative effects on the environment have resulted from the lack of government supervision and regulations, leaving coffee farmers’ land devastated and no longer livable.

Fair trade coffee, on the other hand, requires that workers are paid a certain amount of money that they can live on comfortably, and that no children are used for labor. Under fair trade, laborers may even get paid time off or help with medical needs. Fair traders try to produce coffee in such a way that it causes the least damage possible to the surrounding land.

Free trade coffee tends to be sold at lower prices, while fair trade coffee is often the higher-priced item on the shelf. Though there are certainly exceptions, defenders of free trade coffee are usually more concerned with the economics of the model as it pertains to companies and consumers. Fair trade advocates’ interests often lie in the safety and security of coffee bean farmers and their land.

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Discussion Comments
By umbra21 — On Aug 11, 2013

There are some pretty good applications for your phone now that you can use to figure out what conditions your products like coffee and that were made under, or what associations the company that made them has.

Just because a company makes organic, free or fair trade coffee doesn't mean that they don't sell the slave made coffee on the next shelf.

By irontoenail — On Aug 11, 2013

@browncoat - I prefer to get my coffee and also chocolate through fair trade because at least I know there hasn't been any slave labor or child labor involved in making it.

I think it would be better to be able to buy free trade, but these products often come from countries that don't have strong enough laws against exploiting workers. So, while fair trade isn't perfect, I think it's better than the possibly alternative.

By browncoat — On Aug 10, 2013

It's actually a difficult call to make, as to whether free trade or fair trade coffee is better, and not just because one ends up being cheaper than the other.

When a country that has fair trade restrictions in place goes through a bit of a boom and starts wanting to sell their coffee at higher prices, they are often blocked from doing so, because of the fair trade agreement. So it can actually leave the producers and the workers less well off than they otherwise would be.

Of course, it's a bit like insurance. When the next downturn comes they might be glad to have the protection of the agreement.

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