Exam L5M5 Topic 1 Question 80 Discussion

Choice B - This is correct because one of the primary criticisms of direct trade is the lack of universal standards. Companies can define "ethical practices" in their own terms, which may vary widely and lead to confusion or even greenwashing.
Choice A - This is incorrect because while direct trade does not rely on third-party certifications, this does not ensure complete transparency. In fact, the lack of third-party oversight is often criticized as a limitation, as it can lead to inconsistent or unverifiable claims.
Choice C - This is incorrect because direct trade does not guarantee fair wages for all workers, especially temporary or seasonal laborers. The focus is typically on producers or cooperatives, leaving other workers vulnerable to exploitation.
Choice D- This is incorrect because power imbalances can still exist in direct trade relationships. Buyers may hold significant leverage, particularly if producers depend on them as their sole buyer. Direct trade does not inherently eliminate these imbalances.
Reference:
LO-3.3; Page 309-310; Fairtrade standards that affect the workplace and producers and their implications for procurement and supply