Fair Trade: A Comparative Analysis

Fair trade and free trade have an unforeseen amount of shared policies. Both groups are concerned with lessening the poverty and increase global success. Free trade is said to take place amongst countries when there are no barriers to trade by governments or international organizations. Goods are able to exchange freely between countries. The fair trade was developed and enforced to help small entrepreneurs from developing nations to compete with products manufactured by their counterparts in advanced nations so that they are not damaged by the lack of support to gather adequate resources for making. Therefore fair trade allows for more equal distribution of wealth between undeveloped and developed countries. Hence Fair Trade is better than

“Fair Trade offers farmers and agricultural workers in the global south better prices, stable market links and resources for social and environmental projects” (Raynolds, 2009 as cited in Dragusanu, Giovannucci, & Nunn, 2014). Direct buying from makers aims to diminish the power of brokers and middlemen operating between the producer and the consumer. Corporations engaging in free trade have been accused of exploitation of farmers, especially those belonging to poorer countries, by forcing them to cultivate only profitable crops and paying them less. For example by Kinnock (1994) says Nestlé company in 2005 was dubbed as the globally 'least responsible company ' for its role in provoking the coffee crisis that left millions of coffee producers cash-strapped. To improve its public image, the company ran a fair trade for coffee campaign called 'Coffee with conscience ', in 2007. The heavily marketed advertisement has stated that Nestlé was trying to enhance the living condition of farmers affected by low coffee prices. This will greatly encourage farmers in developing nations to increase production under fair trade. Scott (2014) quoted the statistics from Bureau of Labour Statistics 2011 which mentions that NAFTA has contributed to 5.6 million job losses between 2000 and February 2011 with growing income disparity, decreased real wages, and weakened workers’ collective bargaining powers. But

Thus, fair trade mainly thrives on the demand created by the consumers for such products. Free trade can benefit everyone, the developed and developing world.(Hufbauer, 2008) Free traders believe the best way to lessen poverty in the long run is to permit free trade while fair traders think that opening trade will even further make rich nations becoming richer and poor nations becoming poorer. But there are many ideas on having a managed fair trade which will generally result in sustainable long-term prosperity and equality between