Benefits Of Fair Trade

In the past few years, there has been an international economic debate between free trade and fair trade. The question that’s causing controversy is asking about which practice is better for the future development of the world economy. Fair trade has shown to be the most prosperous practice so far, and it continues to show how much it really benefits countries around the world. Fair trade is better for the future development of the world economy because it creates sustainable relationships between the consumer and the producer, it will provide an equal playing field for both developed and developing countries and also give the poorer countries a better chance to develop themselves and become more successful. Just how fair trade

The article says, that “the developed countries are able to offer tariffs or subsidies for agricultural products in order to protect their industries productivity.” (Vander Weyer, 1) Since these countries are offering the farmers money in order to produce specific goods, they are able to create abundant amounts, helping them increase sales globally by selling them to consumers in developing countries causing those consumers to buy imported goods instead of locally grown products. Poor farmers also cannot gain access to money or technology that would allow them to increase their productivity and lower prices in order to increase imported goods. (Melamed, 4) These struggling farmers cannot earn the money because they cannot sell their products due to their prices not being able to compete with those of exported goods. They are stuck in a cycle that is difficult to escape because of their disadvantages with the developed country’s imported goods. When there are raw materials that are extracted from the earth involved, the poor countries also have a

Since consumers in developing countries turn to imported goods in free trade, there is less production in those countries. (Melamed, 2) With less production in the developing countries the need for workers decreases and there are less people that can supply for themselves and their families so they maintain in the same lifestyle situation. Another flaw with free trade is that it causes imports to increase at a rate faster than export increases which will not be sustainable after a period of time. (Melamed, 3) That means that a country is spending more money than they are making and could possibly have to use money from other sections. If they must cut down on money in other places, they are limiting what they can spend to develop. Although their export demand does not rise, the countries become dependent on products whose prices have been dropping. (Melamed, 4) The countries depend on the products they can export to have some type of income but a country’s development is limited if they have to focus on specific products and cannot expand what they have to offer. Some countries are not granted any loans because they are seen as too poor to be able to repay them and they don’t want to risk not getting that money back. (Melamed, 3) Although it is likely that the country would not be able to pay back the loans, it is difficult