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Fair trade and its future essay
The problem of fair trade
The problem of fair trade
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Using consumer commodity fetishism, free trade has greatly contributed to the society of perpetual growth by increasing the amount money added to the local economy and offers to consumers many competitive and low prices for commodities. The free trade market has had great success in the capitalist economy due to the transformation of the consumer and the new cultural expectation for consumers to accumulate wealth. In capitalism people aim to produce goods for the purpose of exchange for more capital or money. Robbins states that the economics of capitalism grew out of interactions of five different items: commodities, money, labor power, means of production and production (2013, pg. 36). It is the manipulation of these items in the free trade market that has allowed free trades objectives of economic growth, access to high quality low priced goods, competitive markets, increased amount …show more content…
The success and growth of fair trade is heavily tied to consumers and them being aware how goods are produced. In an opposing way to free trades masking of production in the black box, fair trade aims to educates consumers. This education of consumers is the result of “fighting commodity fetishism by creating greater transparency between the grower and the end consumer” (Topik, 2007, pg. 146). Fair Trade thrives off of the transparency of the production of goods. Consumers can pressure sellers to provide fair-trade products in markets who in turn encourage the producers to participate in fair trade by buying fair trade products from them. The objectives of free trade are distinctly different from those of fair trade. As much as fair trade is not a displacement for free trade, its aims are directly opposed to that of free trade and that is a contributing factor as to why the fair trade movement is slow to
Wright, L. T., & Heaton, S. (2006). Fair Trade marketing: an exploration through qualitative research. Journal of Strategic Marketing, 14(4), 411-426. doi:10.1080/09652540600948019
Fair trade should give protection to governments from exploitation. For example, small farmers can be protected by giving government food sovereignty. An article from the Chicago Democratic Socialist Organization proposed, “The agreement must return to governments the ability to safeguard food sovereignty by protecting family and small-scale subsistence farmers” (Chicago Democratic Socialist). Rewriting the agreement can protect the small farms and retain jobs for farm workers. The article further addressed an issue discussed previously, “Large-scale importation of basic grains into Mexico is a major cause of the economic collapse of rural communities, which forces millions of undocumented migrants to seek work in the USA” (Chicago Democratic Socialist). Therefore, it would solve problems both in the US and Mexico. It will take efforts of the many to renegotiate NAFTA, and many other terms needs to be added. The general direction should focus on protecting the interest of the general public by restricting corporate powers. Fair trade will reduce the problems caused by
In 1993, the North American Free Trade Agreement (NAFTA) was signed by President Bill Clinton. It was said that Clinton hoped the agreement would encourage other nations to work toward a boarder world-trade pact. In 1994, the agreement came into effect, creating one of the world’s largest trade zones between United States, Canada, and Mexico.
...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.
As Ian Fletcher pointed out in Free Trade Doesn’t Work: What Should Replace it And Why, nations need a well-chosen balance between openness and closure toward the larger world economy (Fletc...
While free trade has certainly changed with advances in technology and the ability to create external economies, the concept seems to be the most benign way for countries to trade with one another. Factoring in that imperfect competition and increasing returns challenge the concept of comparative advantage in modern international trade markets, the resulting introduction of government policies to regulate trade seems to result in increased tensions between countries as individual nations seek to gain advantages at the cost of others. While classical trade optimism may be somewhat naïve, the alternatives are risky and potentially harmful.
Fair Trade coffee truly presents a difficult dilemma: through attempts to help farmers it sometimes backfires in certain areas and ends up hindering instead. Rules for the guaranteed market, guaranteed price floor, and opposition of child labor all originate from good-hearted desires to improve the lives of coffee farmers. Unfortunately, the situation many coffee farmers face cannot be so easily solved. The process of moving Fair Trade to the next level of functionality may not come quickly: it may take years, even decades. But that does not matter; rather, it matters much more that we ensure that the issues are addressed and thought over rather than simply swept under the carpet with the National Debt. With care and creativity Fair Trade can grow if we simply put forth the effort required to help it do so.
...would also trigger an unintentional effect that would eventually benefited the society as a whole by maximizing the total profit if individuals all follow their self-interest to behave. Newbert explained “For, only capitalism allows individuals to automously choose their own course of action, provided that in so doing, they do not violate the rights of others by forcing them to buy or sell a given product or service” (Newbert 2003, 253). From here, we can realize Smith’s insight towards the early form of capitalism. Finally, Smith’s suggested that free trade is the only way that helps a nation to sustain stable economic growth. He thinks that mercantilism is a barrier of the growth of a nation. He claimed that a nation will be able to maximize the wealth only if they use their competitive advantage on production and trade the surplus under the free trade economy.
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.
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...
Another economist, Douglas Irwin, wrote a book titled “Against the Tide”. The book is an Intellectual History of Free Trade. It is an interesting, educational account of how free trade appeared and of how the concept of free trade has coped with two centuries of attacks and criticism. The behavior of an economy is reflected in the behavior or nature of the individuals and firms that make up the economy. So by studying how the individuals and firms act, we can be able to understand the economy.
“Fair trade is much more than a buying relationship,” Heyl said. “It’s about developing holistic communities and retaining wealth and talent and education in villages in India”. The model is especially significant for helping women. Heyl said in some communities, women aren’t allowed to leave the house without a man. Everything all at once.
Trade is more than the exchange of goods and services; it sows the seeds for growth, development and provides the knowledge and experience that makes development possible (Cho, 1995). Trade is considered one of the main driving forces behind economic growth and poverty reduction, especially in Africa (Fosu and Mold, 2008). Adam Smith’s 1776 theory of absolute advantage states that a trading nation can gain by specialising in the production of the commodity of its absolute advantage and exchanging part of this output with other trading partners for the commodities of its absolute disadvantage (Llorah, 2008). This process enables countries to extend beyond their borders, allowing greater specialisation in production, enhanced effectiveness in use of thin resources, the growth of national income, the capacity to accumulate independent wealth and enhances the growth of the economy (Cho, 1995). According to DFID’s report, Trade Matters, other positive derivatives include raised employment, increased household income and the chance for people to earn their way out of poverty, independent of aid (DFID, 2005). The role of trade, while strongly advocated, is still highly debated (Collins and Graham, 2004; Madeley, 2000) and many recent studies question the positive role of economic growth on open trade (Bene, 2009). The extensive arguments surrounding this controversial discussion empirically highlight the difficulty in isolating the effect of trade liberalisation on economic growth, although it is clear that it does, and will continue to have, an important role in poverty alleviation.
Mobility has allowed human civilizations throughout history to reap the benefits of unrestricted, intercontinental trade, but there are environmental costs as a result which are not immediately apparent. There is no doubt that trade between nations has depleted natural resources, but the question as to whether current trade policies augment or temper environmental degradation is currently under contention. One view is that environmental regulations will create "pollution havens" in countries where there are less stringent regulations, simply relocating environmental damage to a country where the environment is worth less. The opposing view comes in the form of the "Porter hypothesis" named for Michael Porter and his suggestion that stringent regulations will encourage technological innovation among polluting firms thereby decreasing the rate at which the environment is damaged. The opposing views deal with current trade policies, but it is also important also to look at the effects that trade has had on the environment when trade policies were just taking shape.
Fair Trade is a simple idea that improves the living and working conditions of small farmers and workers. The Fair Trade movement promotes the standards for fair labor conditions, fair pricing, direct trade, environmentalism, social policy, and community development. Businesses wishing to adopt Fair Trade practices have to purchase certification licenses, which then leads to Fair Trade Labeling Organization (FLO) sending representatives to the farms from which the products are purchased and ensures that the farmers adhere to the procedures outlined in the Fair Trade standards. Products marked by the Fair Trade label contain 100% Fair Trade certified contents. Buying Fair Trade Certified products, consumers are helping the lives of famers out of poverty through investments in their farms/communities, protecting the environment, and developing the business skills for trading. The practice of Fair Trading a good way to not only help cause awareness but also improve the lives of the workers.