The discussion would revolve around this continuing debate on globalization which is, without a doubt, the controlling capitalistic trend in the world today. But there is a hotly debated contest on how globalization should continue. This is a contest between free trade and fair trade. Free trade and fair trade have been in constant tug of war pulled from each side by economists and politicians. Both carry an ideological approach to what world commercial activity should be. But it is also flavoured by nationalism and politics because the issue directly stirs the potential economic power of its participants whether it is a developed or a third-world country. It is not surprising then that this debate is rife with vicious arguments from each side. In this paper, we would create a case for fair trade as better form of globalization with the rationale that free trade globalization has only made global markets become reckless and abusive.
Proponents of free trade argue that trade between countries should be eliminated of barriers and preferential policies, particularly those that favour countries or specific industries. It is their belief that a business would fail or succeed depending on how it can adapt on a free and open market, without having to depend on special government protections that protect industries or workers. Thus, proponents want to eliminate subsidies and tariffs and are opposing regulations that force companies to pay extra just to do business in foreign markets.
Advocates of fair trade, on the other hand, make working conditions a priority in establishing trade relations. For instance, a fair trade advocate will want to demand an increase of wage rates of workers to improve their livelihood. Thi...
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...s that could support the thrust toward new capitalism. The author builds on the arguments of globalization supporters that say that the richest countries tend to be the most open to the rest of the world if you look at their trade practices and investments. This is because, according to Rodrik, these countries have big governments that have extensive reach and effective regulation. They also have the widest, social safety nets.
In conclusion, fairer trade should be the object if globalization should continue to the future. A fairer trade protects trading itself and not let organizations abuse it. It may seem like protectionism. But a measured form of protectionism means there is a balance between government regulations and openness of the market. Fairness is the only foreseeable solution against globalization’s trilemma of democracy, independence and openness.
...ystem primarily responsible for promoting global competition. Free trade also promotes shifts in production so as to fit the “comparative advantage” model. Though free trade is widely practiced concerns with how to regulate free trade, something supposedly unregulated, countries have to subject themselves to the controversial institutions of the IMF and WTO. Fair trade policies while potentially creating smaller markets support workers’ rights in both the U.S. and developing nations. Though the pros and cons of globalization continue to be debated the United States can no longer escape its role in the global economy nor can it impose policies that are detrimental to the United States founding ideals. However policies that play towards the advantages of both free and fair trade could stimulate a healthy domestic economy that is also competitive in the global market.
In his book, The Globalization Paradox: Democracy and the Future of the World Economy, Dani Rodrik presents a critique of globalization advocates who aspire for the further proliferation of free trade, full liberalization of foreign trade, and unrestricted capital movement across borders. He argues that despite the increasing living standards brought by engaging with the world economy, the social side effects of this engagement are incredibly distressing. , Newly-generated problems such as increased unemployment and the global consequences of the recent economic recessions challenge the idealization
Business in the domestic and global markets have become saturated with competition which laid claim from smaller producers of goods and services; that they were being left out of the markets for the reasons of competing prices. The concept of 'fair trade' was introduced to provide these individuals with a way to compete against the pressures of the big giants of producers of goods and have equal position to sell goods in the markets. This opportunity allows ...
Fair Trade can be defined as “a trading partnership, based on dialogue, transparency, and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South. Fair trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional trade”. (Lyon and Moberg 2010) By encouraging more ethical consumer choice, Fair Trade challenges processes which devalue and exploit people in disadvantaged positions and the environment by aiming to re-embed commodity circuits within ecological and social relations. (Lyon and Moberg 2010) Established and enforced by Non-Governmental Organizations (NGOs), Fair Trade is a voluntary system with its success driven by the wi...
In running our personal affairs, virtually all of us exploit the advantages of free trade and comparative advantage without thinking twice (Blinder). Free trade essentially introduces new technologies to 3rd world countries and helps them develop a stronger economy and find a new quality of life. The advantages of free trade are described by the theory of comparative advantage, which defined means a lower relative cost of production than someone else. With this as long as each country specializes in products that it has a comparative advantage in, ...
In an interview with the Peterson Institute, Rodrik claims he is trying to create “a new narrative to shape the next stage of globalization, and to address the imbalance between the national scope of governments and the global nature of markets”, in many ways, this book does just that. As previously stated, Rodrik has diagnosed a “Political Trilemma of the World Economy”. The first point is that of Hyperglobalization, which is the ambitious agenda of “economic liberalization and deep integration” (17). In other words, it is a rapid and w...
The key challenges facing Fair trade arise from the inherent contradictions embedded within this initiative between movement and market priorities. According to them, this divide can be understood as FT being between “alternative civic/domestic conventions rooted in trust, place attachment, and social benefits and conventional industrial/market norms, practices, and institutions ruled by price and efficiency.” Thus there comes to be two analytical approaches: 1) a social movement, or development orientation that sees FT as an avenue for empowering the poor and marginalised based on social justice concerns and 2) a commercial, market, or corporate reform orientation that sees Fair trade as an avenue that largely upholds the values and institutions of the market. (T.Raynolds & Murray, 2007)
Even in a world focused on the benefits free trade and aimed at achieving the goal of free trade, states are protectionist by nature. Unfortunately, the design of the international system allows for stronger nations to be more protectionist, leaving the weaker states even more vulnerable. A study that is more intensive than a critical commentary should be devoted to analyzing the impact of free trade on developing nations. I was limited to the readings and prior knowledge, and thus couldn’t provide a sufficient analysis on the fair treatment of developing nations. I was skeptical of the one reading that focused on fairness of international institutions because of the statistics that indicate these nations have not done well in recent decades. I would like to look into this more given more time and resources.
International trading has had its delays and road blocks, which has created a number of problems for countries around the world. Countries, fighting with one another to get the better deal, create tariffs and taxes to maximize their profit. This fighting leads to bad relationships with competing countries, and the little producing countries get the short end of this stick. Regulations and organizations have been established to help everyone get the best deal, such as the World Trade Organization (WTO), but not everyone wants help, especially from an organization that seems to help only the big countries and those they want to trade with. This paper will be discussing international trading with emphasis on national sovereignty, the World Trade Organization, and how the WTO impacts trading countries.
In conclusion, Dani Rodrik believes that globalization works best when it is not pushed too far. This allows domestic governments to hold on to some authority over trade alongside policy-making space. Free-market trade going unchecked through hyper globalization would present a problem because people undermine the regulations that citizens are so used to being protected by. This would lead to a problem concerning legitimacy. One solution would be to impose a set of regulations among all countries, but that would be advantageous to some and disadvantageous to others, making it an unfair solution. Creating policy-making space provides governments with some ability to keep trade legitimate as globalization expands.
Globalization is a long program supported by the developed countries in terms of economy to free trade agreements worldwide. It has also come to mean the relocation of production activities or services to places with lower labor costs . Global business in the past or at the time - do not need any support globalization of searching, namely the so-called level playing field . International trade has always had a mixed character in which national organizations and private companies have two parts , where the monopoly has been imposed , often defended by the military , where all forms of restrictions and tariffs have been common , and the participants have made numerous efforts to addressing such interference or to profit from it.
Fair Trade is considered as an alternative trading system, which aims to protect the economically disadvantaged producers, especially in developing countries. It provides transparency and respect in international trade (Gingrich and King, 2012). Besides, Fair Trade also contributes to sustainable development by offering better trading conditions for marginalised producers and workers and securing their rights (Mohan, 2010).
Free trade is a form of economic policy which allows countries to import and export goods among each other with no government interference. In recent years there has been a general consensus in economist’s stance on free trade. They view free trade as an asset. Free trade allows for an abundance of goods with increased varieties and increased availability. The products become cheaper for consumers and no one company monopolizes an industry. The system of free trade has been highly controversial. While free trade benefits consumers it has the potential to hurt manufacturers and businesses thus creating a debate between supporters of free trade and those with antagonistic positions.
Free trade is a policy that relies on the concept of comparative advantage that when comparing two countries one of those countries will have the capability to make a product that is better than the other country. So it is best if each country focuses its efforts and resources into one product to increase the economic activity for both countries. The determination of who produces a product better is based on the open market without intervention from a government who may try to control a trade by imposing government protective measures such as tariffs. The World Trade Organization has been tasked with monitoring free trade, but it has been noted that their policing has not been effective to stop such interventions. Free trade not only relies on a laissez-faire approach but also on assumptions of conditions. The assumptions used by many for economic theories are not always accurate but rather the justification for using the assumptions is so that economic theories can be applied for the greater good of an economy.
In order for international trade to work well, governments must allow the world market to determine how goods are sold, manufactured and traded for all to economically prosper. While all nations may have the capability to produce any goods or services needed by their population, it is not possible for all nations to have a comparative advantage for producing a good due to natural resources of the country or other available resources needed to produce a good or service. The example of trading among states comprising the United States is an example of how free trade works best without the interve...