Free Trade Vs Fair Trade

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"Free" and "Fair" are the most often misused word. Most people thought it is similar and somehow meant the same way. However, it is not similar in any way as free and fair are completely different words and both possess meaning of their owns. The word “Free” itself means uncontrolled and unrestricted, while “Fair” means equality, without favoritism or discrimination. Free trade is a policy and concept involves international trade without government intervention and restraint to its imports and exports areas. On the other hand, fair trade is an idea of trade in which fair prices are paid to the producers. Both possess uniqueness and distinctive features of their own. Therefore free trade is undoubtedly and unconditionally not fair trade in any…show more content…
For free trade it benefits includes increase countries production, improve the efficiency of resources, lead to economic development, and boost international relation. Free trade agreement can increase countries production because it enables countries to specialize in the product that they have a comparative advantage. A comparative advantage simply means the ability to produce specific product more efficiently than another product. Therefore countries can take advantages of efficiency generated from the specific products that was produced to generate more income to the countries. In addition to that, free trade also improves the efficiency of resources as countries can allocate or trade in resources with each other freely. That being the case, countries can exchange and buy raw materials or resources they need easily, which improve production rate as they can focus on making products of their best. Moreover, the high production rate would also improve countries economy and lead to economic development. Economic growth can happen easily as free trade allows people to trade internationally, which means people would have more opportunities to engage in trade rather than solely relies on trade in their domestic area. Lastly, free trade strengthens international relation, making countries cooperate more through common benefit. ASEAN are the best examples for this as countries within it got closer together,…show more content…
For fair trade, the key organizations include Fair Trade Labeling Organization, and World Fair Trade Organization. These organization focuses on policies that provide financial sustainability to producers in developing countries. For examples, World Fair Trade Organization main mission is to improve the livelihoods and well being of disadvantaged producers. This indicates that they support fair trade idea, promote it, and uphold it. In contrast, free trade key advocate organizations are World Trade Organization, World Bank, and International Monetary Fund. World trade Organization are the best example for organization that support free trade policy as it roles are to analyze each country trade power and ensure that the global trade goes smoothly. This indicate that the world trade organization goals is align with free trade policy, which result in it advocating the free trade
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