Fair Trade City Subsidization and WTO Agreement Violation

Numerous local governments in the UK have achieved the designation Fairtrade City for their provision of special assistance to Fairtrade certified goods “ which originate from producers in the developing world who enjoy a higher wage and healthy living standards. This article examines the legality of such policies through the framework of the World Trade Organization agreements and argues that such favourable treatment is both an illegal subsidy and a violation of the Most Favoured Nation principle. Discrimination against non-Fairtrade goods is likely not defensible through the WTO's permissible exceptions for developing nations; nor does it fit under any of the general exceptions under GATT. The article concludes that Member states from the developed world injured as a result of Fairtrade City policies should seek consultations as provided by the WTO Agreement on Subsidies and Countervailing measures