Trade Vs Fair Trade

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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. Small entrepreneurs lack the support and accessibility to gather their resources to produce their goods, so through fair trade these small scale producers will be able to compete against the developing nations and make a sustainable living. Hence fair trade allows for more equal distribution of wealth between undeveloped and developed countries. Therefore I agree that a better managed fair trade will bring…show more content…
The fair trade price is set by taking into account local economic conditions and is calculated by the Fair Trade International organization. This guaranteed price is termed the fair trade minimum floor price, and its intentions are to cover the cost of sustainable production and a decent standard of living. These financial aspects of fair trade are particularly important at both individual producer and organisational Long-term relationships and supply contracts that allow for planning and sustainable production practices. These are designed to ensure producers do not suffer from the effects of buyer’s short-term bias. Cooperation develops buyer–producer relationships built on trust and mutual respect. According to Dragusunan et al (2014) that Fair trade has grown over 4500 distinct fair trade products in Argentinean pin cushions in the 1960s while the fair trade movement has improved market mechanisms to change the society through global consumption patterns. And that it “provides consumers with product options that uphold high social and environmental standards” (Raynolds, 2009 as cited in Dragusanu, Giovannucci, & Nunn, 2014). Arnould et al. say that this long-term planning allowed for higher levels of education in regions benefiting from fair trade than in non-fair trade equivalents, particularly when fair trade represents a reasonably high percentage of producer exports. Doherty,…show more content…
When free trade is implemented, there should be no barriers from the governments on the trade. But countries together with the big companies sometimes enter the poor countries and capture a bigger market of a product which leads to a monopoly and poor become dependent again. Finally the rich put sanctions on the poor so they cannot stand up again on their own. Therefore Free trade is subjected to criticism among the people as well as among the critics. Kulkarni (2013) proves this idea by saying that there is no country who adopts Free trade as it is. For example double standards can be seen in USA when they subsidize their wheat farmers. Already they have made a pure monopoly on that where the poor countries cannot compete with the lower prices of USA wheat. Also USA does not allow the developing countries to impose countervailing duties on their agricultural subsidies. Stiglitz, (2006) justifies the unfair Free trade actions through illegal American cotton subsidies which are still in the market even though WTO does not approve. Therefore it is evident why economists say “Free trade cannot be fair anytime” (Żukrowska, 2010 cited in Wielechowski and Roman,
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