Essay about Free Trade And Fair Trade

Essay about Free Trade And Fair Trade

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According to two former parts, both free trade and fair trade perspectives expect to help developing countries overcome poverty. Free trade tends to promote industrializations and economic growth. Although free trade will bring technology and progress into developing countries and increase their economic growth but there are still have a number of poor people and an inequality problem between urban and rural areas. Opening markets of developing countries also affects domestic producers adversely because a competition with foreign nations will reduce prices of their products. Additionally, Yanke (2014) mentions that farmers in developing countries suffer a huge loss of revenues when market prices plummet since there are no government safety prices under free trade. Furthermore, it is possible that when developed countries invest in or move their operation into developing countries, domestic markets will be occupied by companies or industries of developed countries since generally developed countries have more powerful and capability than developing countries. According to Mukherjee (2004) since China liberalizes its trade in 1978 until 2004, economic growth increased over 7 percent, and in the 1990s the proportion of Chinese people who live below 1 dollar per day decreased from 31 percent to 5.5 percent. In addition, the flow of foreign direct investment to China also rose from around 590 million dollars in 1979 to nearly 50 billion dollars in 2004. Nonetheless, she contends that after adopting free trade policies, China has to confront with a problem about unemployment which more than 10 percent of urban and far more of rural people are unemployed, likewise, the problem about disparity of wealth between city and countryside which ...


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...ers and become better off from stable and appropriate income by selling organic sugar through fair trade markets around the world. Moreover, they also receives the bonus from free trade premium which they used it to improve their productivity, living standards and community. For example, they built a health care center in 2004. Furthermore, they also used the premium money to invest in education as a long-run strategy. In addition, Brown (2007) also contends that when coffee and cocoa cooperatives in Africa are in trouble Twin and Twin Trading, an organization which is their partnership from fair trade contracts, does not ever abandon them but helps to solve the problem.
Therefore, it is possible to argue that developing countries have the best experience of full benefits under fair trade rather than free trade that advantages are come together with disadvantages.

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