Free trade benefits few but not the masses, is in favor of rich companies with large corporations, means a loss of power and political control on a national, regional and local levels of government, as well as allows for child labor and there for loses out economically. Many people here in the United States are not well informed about Free Trade or its drawbacks. By giving people the information and steering them toward a better form of trade such as Fair Trade we could possible help those other counties that are dealing with the effects of free trade. When dealing with free trade the commercial benefits are hard to miss, more choices on cars and products, lower coasts on goods so consumers can by more products and live the good life. (p.68) However, digging deep in to the effects of free trade shows us that that it benefits few but not the masses.
In Carol Off’s book, she states, “Green & Black’s played the ethical card to the hilt, putting the message that it was paying a premium price for the cocoa beans while allowing African farmers a chemical-free environment” (281). Though their chocolate cost more than others’ did, they were able to pay farmers well, and stipulate a healthier approach- organic. Such can be done on a larger scale, but is being avoided by big companies, whose best interest lies in profit. Seeing how slavery can be greatly reduced, which has been successfully demonstrated, begs the question: what than will it take for big business to implement these changes? Works Cited Off, Carol.
However, it is not every developing country will succeed in developing their economy after adopted free trade policies. There are many developing countries remain poor or even worse off since the prices of technology and manufactured goods that they import from developed countries are higher than the income that they gain from export their low price products such as agriculture which are major exporting commodities of many developing nations. Moreover, opening domestic markets also brings huge risks to developing countries which have not enough capability to compete with developed nations. For instance, after Zambia and Ghana opened their markets the rate of economic growth has fell suddenly because their domestic products cannot compete with foreign goods while the cost of imports were higher than income from exports (Byers, 2003). In contrast to its theory that free trade will improve the living standards of the population in developing countries, the effect of free trade, in reality, affects many people adversely in developing countries particularly poor people in countryside even though the state have economic growth.
He also said that the country which is provided with any one of the factor in abundant should be produced in large amount thus lowering the cost of the manufacturing process. The country should import the products which they are not good at. According to this theory, the case states that India had the most skilled labours and the agricultural area when compared to many other countries in the world. India lead the race from the year 1920 till 1970. By that time Brazil and some of the African countries joined the race along with India, but could not compete with the standard of skilled labour when compared to the labours in India.
a) Mercantilism According to the Mercantilism theory, In India Export is more than Import and it is maintaining trade surplus but however when considering zero-sum game which stats that one country will gain results another country will lose In this case scenario India leads in cashew business and simultaneously Brazil is being as biggest competitor and also East Africa doesn’t lose its market so here no one loses their position so mercantilism is not applicable. b) Absolute Advantage As per the Absolute Advantage theory which states that a product is produced than any other country to produce it. In this case, India produces cashew more efficient than East Africa and Russia and also Brazil due to climatic conditions and skilled labors. Also due to utilizing less fertilizers, India is able to produce high-grade nuts which has better flavor and that cause Indian to sell at premium prices by 15 percent more comparing to Brazil and 25 percent more from Mozambique. So Absolute advantage is applicable to this case.
This burdens citizens of the country, especially to the low-income families. It also indicates that entry in the international market will be hard for the Philippines because the price of exporting sugar would be higher compared to a country like Thailand who has a lower cost of production due to its efficient technology. Bioethanol, which is the alternative gas for running the sugar mills, is not enough that is why the government must import bioethanol gas from Brazil, which contributes to higher production cost. The winners in this situation are countries that have the ability to enter the sugar world market and trade with states. Meanwhile, the loser is the Philippines alone because it does not have enough money to allocate funds for the improvement of sugar production, thus making the cost of production
From 1950’s India buys nuts from African countries and as per mercantilism theory that is trade between two countries and here it doesn’t explain trade between two countries. Thus India buys from one country and sells to another for at higher rate and the richer company buys process it and sells it to the developed countries like US &UK when their demand increased after 1970’s. India exports only 50 percent due its demand in country but Brazil exports 85 percent to other countries. Thus mercantilism doesn’t explain clearly about cashews. (b) Absolute Advantage Theory: Adam Smith states that one country has more advantage when it is more efficient in production of a product than other country.
Given a chance to get a job and an education, people can get out of poverty, to turn around the economy to improve their living conditions and to increase the wealth of a country. Over the past twenty years is common to listen about sweatshops and its role exploiting people and destroying economies. People are wrong, they are blind for they desire for a better world, free of poverty and injustice. Unfortunately, good intentions alone won’t change the world and sweatshops have taken the first step to change the world. Sweatshops have been marked as unethical and unfair, but on the contrary sweatshops are sources of opportunities where the poor have the chance to get a job and education.
Internationally, much effort have been placed in expediting free trade flows, particularly in products which are of significance to the developed countries, neglecting other issues like labor market standards and sustainability. Countries like Africa have not achieved macro-economic stability that is vital for growth and poverty alleviation. The assistance from developed countries in the form of foreign direct investments, financial aids, debt relief and more is not constant and does not guarantee poverty reduction. Besides, globalization will upset the local markets because of the increased in foreign consumption. Consumers in developing or third world countries will tend to purchase more imported goods due to the belief that “the grass is greener on the other side of the world”.
That is regulated by a set of rules created by governments over the years. In general, poor countries don't have access to developed countries’ markets because of the barriers of trade and agricultural. It’s difficult for poor countries, because of trade barriers, to sell their products abroad and develop their living conditions. While free trade benefits everyone, governments sometimes aim to protect their goods and markets by providing subsidies to local rules and producers, or creating barriers like tariffs and quotas. This particular practice is known as Protectionism; which can be identified as the economic policies and procedures of controlling trade between states... ... middle of paper ... ...rvices, cause deformation in domestic economies.