Category: Fair Trade

To What Extent Free Trade is Fair and Benefits The World Economy

Adam Smith, coined rightfully as the Father of Modern Economics, in 1776 in his book ‘The Wealth of Nations’ laid the foundation of the concept of free trade. Though by no means a novel concept, it had been informally practiced throughout British colonies as well the Ottomon Empire, he formalised this economic concept. Famously opposing the mercantilist approach, he is quoted as saying ‘It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy…What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom.’ To summarise, one of his main arguments for free trade was why buy what you can import for cheap. According to him, this would allow countries to specialise according to their natural strengths and then trade for the rest of their needs from what complementary countries do best. The Scotsman further stated ‘By means of glasses, hotbeds, and hot walls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?

Free trade is also considered to be a vehicle of peace. Frederic Bastiat is attributed to have said ‘ ‘When goods cannot cross borders, armies will.’. History has seen examples of when the USA President Hoover signed the Smoot Hawley act, hiking tariff, eventually leading to extreme protectionism, the Great Depression and then World War 2. Finally, in 1947 the General Agreement on Tariff and Trade (GATT) was signed with objectives of encouraging international trade, and reducing tariff as possible. A more recent example is the USA imposing trade sanctions on Iran, following and leading to hostile relations between the two countries.

The modern world consists of multiple free trade agreements with most countries’ members of more than one. These are blocs formed geographically or according to a country naturalised need. They can be bilateral or multilateral. Oftentimes international trade can be a political tool, a symbol of goodwill for some nations and hostility in other cases. The World Trade Organisation is a notable example with many member countries and a comprehensible framework. In case of peaceful neighbours, bilateral relations are common, reducing transport and other costs associated with the physical transfer of goods.

Specialisation is one of the main articles of free trade. David Ricardo and his theory of comparative advantage was a key proponent of free trade. He theorises that Comparative advantage is when a country produces a good or service for a lower opportunity cost than other countries. By raising the productivity of national economies, international specialization increases the output of goods and services. This is its economic justification and the principal justification of the international trade that makes possible such specialization (Franklin R. Root, 2000).

No country is self suffice in all their needs and to attempt to do so, shut themselves up in this endeavour, would cause great economic inefficiencies as well as scarcity for a great fraction of the people. Also, trade increases the importance and usefulness of a commodity for a country. Saudi Arabia with its oil reserves would not amount to much if they could not trade it in for their needed imports, a vast array of items scarce in a dessert country.

So is free trade the end all of the worlds commodity distribution and rotation ? While most liberal and western thinkers and economists think so, the conservatives have sometimes cited a different stance. Many also argue that free trade in its complete sense is almost impossible to implement and it would be the natural tendency of those e who have the clout to offer some degree of protectionism to their home industries. A famous Republican stance from USA, from William Mc Kinley states that :’Under free trade the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man. It is said that protection is immoral […]. Why, if protection builds up and elevates 63,000,000 the U.S. population of people, the influence of those 63,000,000 of people elevates the rest of the world. We cannot take a step in the pathway of progress without benefitting mankind everywhere. Well, they say, ‘Buy where you can buy the cheapest’…. Of course, that applies to labor as to everything else. Let me give you a maxim that is a thousand times better than that, and it is the protection maxim: ‘Buy where you can pay the easiest. And that spot of earth is where labor wins its highest rewards.

Opponents of free trade argue that while Ricardo’s theory of comparative advantage is non trivial and theoretically true there are factors that undercut its plausibility, namely the flight of capital and labour. Henceforth, wherein ethical and social regulations may not come into full force, countries and companies pursue absolute advantage, to the undue and reckless exploitation of the producer. Paul Krugman once stated that, ‘ If there were an Economist‘s Creed, it would surely contain the affirmations ‘I believe in the Principle of Comparative Advantage’ and ‘I believe in Free Trade’.

Intellectual and political opponents of free trade cite many reasons for their stance and in some cases even portray developed nations indulging in free trade as a mafia of sorts. Western literature tends to skim over the negative effects of international trade and outsourcing, or possibly many researchers don’t get there. Ethnocentric biases seem rampant. Furthermore, it can be pointed out that there are in practice many discrepancies and uncertainties, both economic and political which cannot be included in an economic model.

Free trade puts all participating global players on the same playing field. Ideally one has complete information and access to all commodities for sale. Essentially this would mean that manufacturers and sellers who are newer into the market or on a smaller scale are at a start disadvantage. An infant industry may not be able to stand up against an established one. This leads to Krugman (2008) suggesting that since these are not normal conditions protectionism may be prudent to nurture less industrialised nations and for industrialised nations the case of protectionism is weaker. Even if smaller nations manage to stay afloat they will have lesser margins, taking less advantage of economies of scale and may even be operating at a social if not only financial loss. In an ideal situation this competition would drive innovation and efficiency but in practice one sees smaller scale producers losing dearly. Newer industries simply don’t have the resources, human and physical capital and the information to be able to survive. Wherein they endeavour to do so it is often at the cost of labour and environmental exploitation, with free trade doing them much more harm than good. Many countries have criticised the WTO for not doing more to levelise the dealings of the North (developed nations) and the South (developing nations). This is a major criticism of the free trade concept.

Many developing nations are agro-based or depend on a small range of exports. This leaves them more vulnerable to fluctuations in crop yields, international price hikes and currency fluctuations. Most ‘North’ nations buy these raw materials, add value and then sell them back to the South nations, creating more real wealth for themselves and widening the gap between the rich and the poor. The rich sell products, not the means to make such products, keeping the balance in their favour. It is similar to giving a man a fish vs. teaching him to fish for himself. For example buying raw cotton, then processing it and then selling back clothes to the originating country. At this point if one even starts a competing plant for cotton processing, with open trade it would rarely be able to compete on price or quality and without some protectionism involved would be a failed venture. Furthermore another social cost of free trade and globalisation is urbanisation. Farmers lose their farmland, move to urban centres where they may or may not do well and may contribute to increased crime rates.

As long as a poorer nation is forced to accept such free, unfair trade in essence larger countries are able to sustain a great amount of mercantilist theories under the cloak of laissez faire liberalisation. According to Smith (2003) they would be handing their wealth to the imperial-centres-of-capital of their own free will.

Furthermore free trade also encompasses, in practice, other discrepancies. It opens up barriers for the trade off of information and technology but at the same time it also opens up avenues for technological theft. Countries have different laws pertaining to privacy, patents and innovation and many a times even copy right laws implementation can take years. In this case the import of machinery and/or IT tools leave these vulnerable to copy and theft in the host countries. Engines have easily been taken apart and rebuilt, giving the host country and company technical knowledge to replicate what they import. Content such as music, art and books are pirated and sold widely in countries with the original authors and publishers having little way to track or collect any royalties. One may again argue that in the third world this dispenses education at a price that is affordable but ethically this is still debateable. Competitive advantages are dispelled and to any producer this could be a sizable blow. The purpose of business and economics is not philanthropy though mindfulness and responsibility is now a virtue.

Cultural identities also perceive a threat from free trade and its counterpart, globalisation. Many countries view these as white-washing or Americanising its culture with insensitivity towards their native values. There is a loss of local aesthetic and demand of local traditional products because foreign cheaper good serve the same purpose but in a cheaper more Anglicised way. To many citizens this is a loss of national identity and sovereignty. Since this is not quantifiable, many classical theories do not consider this component. Furthermore, traditional industries also become indirect competition to the foreign goods and more often than not lose out. Food vendors, with local street food lost out in most cases when a Mc Donald’s opened down the street. Flamboyant locally handmade cloth in India, which was initially a lengthy, rich process got reduced to more accessible, cheaper British cloth during the British colonisation and the after effects are seen to this day. Many artists and craftsmen became obsolete, losing years of expertise and hard work. Languages are also affected as are customs. Rice and roti eating nations started consuming bread and breakfast cereal. Their own wheat was exported and then re-imported made into processed snacks. The health of the local was affected, not all climates allow for rampant consumption of richer, heavier food and the slighter built East Asian had a paunch weighing down his frame. Traditional ways of life have been lost to the glamorised Western way of life which is not without its own pitfalls but is promoted and pushed on as the end all. The world as a while loses out on diversity, thoughts, varied points of view, heritage and culture. Free trade has also been used as a political tool. Countries can ‘favour’ each other with distinct deals in order to foster better relations. On the flip side however embargos are another way to show hostility. However on a separate scale, multinationals with political backing and manoeuvring are able to get lawfully and unlawful advantages regarding land acquisition, evading natural and national laws, bribery and corruption. More often than ever, developing nations with lax frameworks of social justice and security are the targets. It is now easier than ever for an MNC to go into a country, set up shop and while adhering to already lax laws, further get away with more exploitation simply by knowing the right people in the host country. Many developing nations do not have pressure groups with as much clout as the developed world, and the information gap may ensure that a company indulges in less than tasteful practices for years before the media catches on. The diamond industry in Sierra Lone, African exploitation are a classic example of this. These MNCs can then further on play a role in politics, aiding the candidates, in legitimate ways and otherwise, who will be most lenient to them. This will leave the common man of the developing nation at a further disadvantage, concentrating the wealth that investment brings into a few hands, before the possibility of capital flight.

Environmental degradation has long been a woe of people in industrialised settings. Developed nations are likely to have more comprehensive and strictly enforced laws in place. However, their corporations are not as careful where they get a looser reign. Irresponsible extraction of natural raw materials and improper disposal of waste and emissions into the environment are much easier to overlook in a foreign land. Proponents of free trade here argue that it is the responsibility of the host country to have better laws in place and to enforce them.

Nestlé’s baby formula scandal is an example of MNCs and their reckless clout. Despite the WTO Code recommending a complete ban on advertising and marketing of any breast milk substitutes in developing countries. The poverty stricken mothers of these nations assumed that they were doing the best for their children by giving them formula but at the same time they had no t been educated as to the correct usage, sterilisation of bottles etc. Mothers would dilute the formula as a measure to save more money. However, with insanitary conditions, gross mismanagement scores of children were lost. Nestle was far and wide criticised but it still took years to regulate.

Free trade is indeed a double ended sword. there is a vast discrepancy between its theoretical implications and practical applications. For free trade to be fair trade there would be a call for great benevolence on the part of countries and corporations which would be far-fetched to assume. It is support and special groups that oppose free trade and they are fighting for the in quantifiable gains and losses for humanity. In reality however, and as is seen now, free trade is far from fair trade. It is many developing nations striking deals that benefit them less than their counterparts, but they generally have no other way out. It would be up to individual organisations and entity to at least try to play nice, play a little bit fair.

Fair Trade: The Pros and Cons

Fair trade is trade in which fair prices are paid to producers in developing countries. It based on partnership between consumers and producers. Fair trade improves the lives of those living in developing countries by offering small scale producers fair trade relations and a guaranteed minimum price. There are over 1.5 million workers and 1210 fair trade certified producer organizations in 74 countries (Fairtrade Labelling Organizations International, 2011). The fair trade USA coffee market has grown nearly 90% since it was established (TransFair USA, 2005). Fair trade was started as an alternative to free trade and has had a major positive impact on the world. They have a vision based on equality “”…To achieve this vision, Fairtrade seeks to transform trading structures and practices in favour of the poor and disadvantages. By facilitating trading partnerships based on equality and transparency…” (Fair Trade Foundation). Fair trade specifically focuses on solidarity and the well-being of producers. Fair trade should be encouraged and embraced. Improving the lives of those living in developing countries, the positive impact on women, the humane working conditions, reduction of child labor and the environmental protection are some of the many reasons why fair trade works and should be supported. A major aspect of fair trade is their focus on the quality of life for the producers in third world countries.

The main goal of fair traders to increase the quality of farmers and producing goods in third world countries. Impact assessments have been conducted that have found that fair trade can make a significant difference in the live of the workers. Fair trade supports farmers growing thing such as bananas, cocoa and coffee making them less vulnerable to poverty. Training and premium markets become more accessible which results in higher sales and better farming. Additional funding provided through fair trade supports things like better housing and more accessible and affordable food. Critics of fair trade have made some valid points about why fair trade dos not work such as pointing out one of the biggest flaws that is, that fair trade does not include or apply to all workers. The market share for fair trade is too small and does not impact the general living conditions of these developing countries. Despite the negative opinions on fair trade, they continue to fight for income security and poverty. Although fair trade focusses on the improving of all workers lives, they also specifically focus on the positive impact that they can have on the lives of women in these developing countries.

Women do most of the work in plantations and on farms but are treated unfairly and discriminated against. Fair trade is a known advocate for women rights. They are major supporters of gender equality, ensuring both mean and women have access to the same jobs and resources. The company does not discriminate in hiring, access to training, promotion, termination or retirement based on race, origin, religion, disability, gender, sexual orientation, political affiliation, HIV/Aids status or age. A major focus of fair trade has been their impact on the lives of women. Fair trades premiums help fund and support women empowerment programs. One of the focuses of fair trade is helping women realize their potential and get the respect they deserve. Female workers are guaranteed access to health care, certain job rights, and provided them with opportunities for education, leadership roles, and scholarships. “Thanks to Fair Trade, I sent my son to college to study engineering after my husband passed away. I was struggling to meet expenses with a single income. Without the assistance, I couldn’t have managed it. I am thankful to everybody behind this for helping people like us dream big.”(fairtradeusa.org, 2016). Fair trade organizations offer women the opportunity to work towards finial security and empowerment. A common argument is that fair trade does not do enough for the female workers. There is a lack in monitoring of the treatment of women in the workplace due to too little funding. It is believed that fair trade could being doing so much more for women. Despite supporting women being a major focus of fair trade, the working conditions for the workers is very important to them.

Fair trade helps workers realize their rights and negotiate the terms and conditions of their working conditions. Workers and famers are given the choice to work for fair trade. Fair trade enforces safe working conditions. “Organisations who buy Fair Trade products from producer groups either directly or through intermediaries ensure that no forced labour is used in production…”(world fair trade organization 2013). Not only does fair trade ensure humane working conditions, they also fight to prevent child labor in third world countries. It has been argued that fair trade does not monitor the working conditions in the workplace as well as they claim. Despite the thorough training the workers receive, the conditions of the work place can still be considered to pose a threat to the employees of these companies. Fair trade has worked hard to ensure that there is no forced labor within its workforce.

Fair trade is working to combat child labor in the workforce. Child labor for children under the age of 15 is prohibited within fair trade. Fair trade monitors any involvement of children in the workforce ensuring their well-being, security, and educational requirements. Child labor is a result of poverty and unfair terms of trade, it is also a result of exploitation, lack of access to quality education. “Local governments are working together with cocoa manufacturers and farmers themselves to address the root causes of child labor in order to get kids off of farms and into schools. And Fair Trade has proven to be one of the most effective tools for improvement.” (The Huffington Post 2016). Fair trade has raised the incomes for farmers so they can invest in their farms and hire adult workers. Premiums from fair trade are being used in communities and invested in things like education. Some believe that fair trade is not doing enough to prevent child labor. Their certified products are considered to be more expensive so consumers choose the cheaper options and end up supporting the child labor industry. Although reducing child labor in developing countries is a very big aspect of fair trade, the protection of the environment is a key element when it comes to fair trade.

Fair trade is a major advocate for environmental protection. The standards of fair trade promote training for workers that teach more environmentally friendly practices. Energy and greenhouse gas reduction, soil and water quality, prohibition of genetically modified organisms and dangerous chemicals and waste management are all things that are taught and encouraged by fair trade. “Farmers and workers must meet environmental Standards as part of certification. Producers are required to work to protect the natural environment and make environmental protection a part of farm management. They are also encouraged to minimize the use of energy, especially from non-renewable sources.” (Fairtrade Canada 2016). Fair trade provides financial aid and producer support to make following these environmentally friendly practice possible in developing countries. Certain harmful chemicals are prohibited as well as GMO’s. They are replacing harmful methods with safe and more natural methods to increase the health and safety of members. An issue that has been argued about the standard of fair trade is the costs of these standards being high, the cost of maintaining standards results in a lack in actually monitoring the standards they claim to up hold. Fair trade has been seeking to reduce their impact on the environment.

The positive effects of fair trade out weigh the negative results by far and it should be for all. A common argument against fair trade is that they have too many partnerships, but the problem is there are not enough partnerships. Fair trade has standards that all members whether consumers or producers must follow. Fair trade has been working towards many goals including the improvement the lives of those living in developing countries, the positive impact on women, the humane working conditions, reduction of child labor and the environmental protection.

Free Trade and Fair Trade Policies of North America and The World Trade Organization

Free Trade is a policy followed by North America and the other countries in the World Trade Organization. The policy allows for open trading routes between all member countries. The agreements often remove any sorts of taxes or tariffs in place and make it much easier to freely trade products. The problem with free trade comes from the amount of power that large corporations gain from it.

With trading being allowed by highly developed countries and smaller less developed ones, it makes it harder for the small countries to compete in the market place. Large corporations can basically control the market and set the prices for the farmers or manufactures goods. This causes loss of jobs, and overall loss of profits for the less developed countries. They may even end up spending more money to grow crops, then what they eventually sell them for. This essentially renders their work useless. With all of the connections a large corporation has, they can essentially set their own prices by driving down the market. If they really want to destroy a market in a country they do what is called “dumping.” Mexico may be one of the most devastated countries to experience dumping, after the enactment of the North American Free Trade Agreement. The dumping of corn, that was cheaper then what it cost Mexican farmers to grow, essentially destroyed the market. It is estimated that the dumping cost Mexican corn farmers one billion dollars a year in between the period of 1995 to 2005.

Free trade and fair trade might sound the same, but they are very different. Fair trade is a policy that protects the farmers and manufactures who make the goods. It ensures that the goods they produce hold their value, and they will not be sold for less then what they cost to make or grow. The fair trade movement wants to make life better for some of the farmers in less developed countries. Working with free trade buyers here in North America and in other countries, they get a fair price that allows them to make a profit.

A lot of people are confused about fair trade and think it may be some sort of charity. It doesn’t involve any type of charity; it’s just about treating the people who work hard to produce the goods more fairly. It also seeks to improve some of the conditions on the farms they work on, eliminating some of the harsh working conditions. There have been some strides made in the movement in recent years, some large chain retailers are now carrying fair trade certified products. One of the biggest accomplishments of the movement was getting Wal-Mart and McDonald’s to sell certain fair trade products, coffee being one of the first. Hopefully, the movement keeps gaining momentum and takes off in other countries as well. Every worker who grows this nation’s food deserves to live just as comfortable as us, it’s only right. October is Fair Trade Month! What could be a better time than now to pledge to buy Fair Trade goods?

Why Environmental Sustainability is so Important

In order to consider environmental sustainability, we must first define it. It can be described as “The rates of renewable resource harvest, pollution creation, and nonrenewable resource depletion that can be continued indefinitely.” My perspective is that it is something that all countries need to actively consider. It may be harder in underdeveloped countries, such as Kenya, for obvious reasons. They have to work with lack of funds, political corruption, less developed ideas about on what is appropriate for women to take part in, and an ever-growing population to feed and employ. Here in the United States, we are advantageous because we are more progressively moving towards eliminating age old gendered norms that constrict the ability for women to exceed in all aspects. We also probably have a steadier economic environment, we may not have much to fund but we still have the state parks and such up and running.

The most important aspects of a sustainable environment are social, economic and of course, environmental. Without satisfying all three of these consecutively it is not possible to have one. Let us first focus on the biggest factor, the environment. The amount of pollution that the United States of America emits is not even comparable to that of Kenya just due to sheer size. Even so, you would think that it would be a very pressing issue considering the amount of scientific evidence that show a grim outlook for our earth. However, that is simply not the case. As Americans we are told by so many large figures in political power that it’s made up or exaggerated. A senator by the name of Jim Inhofe actually used his time on the senate floor to go outside and pick up a handful of snow as a way of discrediting global warming. This is someone that has been elected to office, someone who is supposed to help make educated decisions for the people in this country. He went on further to point out “record lows” in temperature to further suggest that global warming is a hoax. Even our new president-elect Donald Trump has expressed his skepticism regarding global climate change.

One might think that seeing this, you could call these people fools, that you could show them empirical evidence to prove that it does, indeed exist. It is truly sad to see the sentiment of people like that echoed among our vast population. I honestly do believe that a lot of people in our country choose to turn their heads away from the issue at hand. One of the reasons is that it is bad for business. We are a country derived on capitalist ideals and are always trying to reap whatever we can sow, regardless of the consequences. Only recently have we start to see companies trying to make a difference and change their business models so that they are fair in all kinds of aspects of business. Starbucks promotes fair trade and paying farmers of their coffee competitive prices because it is unethical to pay them less, as they might take it because they have no other choice. Panera Bread opts for buying from local farms and also ethically buying coffee.

Another big reason people might turn the other cheek is that it is in all honesty, pretty terrifying to come to terms with. It’s scary to think that we have known about the consequences for quite some time, yet humans still deplete resources, still pollute water sources and still do as they have since the industrial revolution. The implication that the earth has been damaged beyond repair, or that we cannot slow down the rate at which the global temperature is rising is hard to fathom. My theory is that when something is scary, and seemingly too big and powerful to stop, than the most you can do is hide.

There is also a lot to consider about who we can blame for this. Everyone needs someone or something to blame when bad things happen, it’s part of human nature to want to. However, instead of pointing the finger or playing whodunit, we need to focus on a plan of action. As a country we need to listen to voices of people such as Wangari, because despite the political turbulence her career endured, she still is motivated and working on new ways to implement her vision. We need to see that not only the global temperature is being affected but smaller things, things that people who live in less developed places rely on, what we rely on in some aspects as well.

I think the first step we could take as a nation is to listen to what is being said, to take that information and process it, to think about it critically but also be willing to be opened minded. From there we could start to make a plan about ways to fund, create and maintain a sustainable environment. There are so many new things that people are inventing, so many ways to “get your hands dirty” and take charge of your immediate environment, just like Wangari has. We could implement the use of more solar, wind, and hydro energy. We could make the big focus on the phasing out of the use of fossil fuels for renewable ones. We can get politically involved to help impose restrictions on large corporations who exploit resources or do not monitor or decrease their carbon footprints or amount they pollute. There are just so many options out there that can help get the ball rolling. But alas, never without obstacles.

Financially, it may be hard to come up with the resources to fund such projects, especially in a time of economic struggle. It is something to consider to be a priority though, because the disastrous affects are going to cost lives, homes and even more money in damages. As a nation we should consider what we can do without to make the transition to clean energy, what with that being one of the mane concerns. Our elected officials need to come up with a way to get on the right track, not just for our citizens, but for the entire world.

In conclusion, I think that we do not yet have what it takes to maintain a sustainable environment. We have a lot of work to do still, and even though we are developed, it is possible that my own voice as a woman would fall upon deaf ears. As a woman I will do my best to rally others to make their voices matter, to assure them just as Wangari did that they do not need to be a scientist or a college graduate to care or to make real changes.

The Problems Related to Sweatshops and Solutions to It

The consumer goods we buy in our day to day lives have a lot of work and a big story to tell behind their making, but the story may not be so pleasing. Sweatshops commit an abundance of crimes that most of us are unaware of. There are five violence behind the sweatshops.

The restaurant, apparel, and meat-processing industries are believed to have the most serious and widespread problems with multiple violations. Forty of the 53 federal regional officials surveyed said that violations are a serious problem in their areas in at least one of these three industries. In the past 10 years, they believe the severity of violations in the restaurant, apparel, and meat- processing industries have either remained about the same or become more severe. Hispanics and Asians are the ethnic groups thought to be most heavily represented in establishments where multiple violations are a problem in these three industries, having the largest percentages of workers in sweatshops in those industries, according to those we surveyed.

Directors of state labor departments were asked whether various indus about Chronic Labor Law tries had a serious problem with establishments that regularly violated Violators (1) mainly wage/child labor laws, (2) mainly safety/health laws, or (3) both types of laws. Officials in 35 states cited some industry as having serious problems. Twenty-eight cited industries with mainly wage/hour or mainly safety/health problems, and seven identified industries where multiple labor law violations were a problem. As figure 13 shows, four of the seven state officials cited the restaurant industry, two cited the meat-processing industry, and one cited the apparel manufacturing industry.

152 million children are in child labor today, 48% are between the ages 5-11, 28% are between 12-14, 24% are between 15-17. 70.9% of these children are working in agriculture, 11.9% in industry, and 17.2% in services. In November 1998, the AIP unveiled plans to create a Fair Labor Association to oversee implementation and monitoring of the code. UNITE, and the other union member, the Retail, Wholesale and Department Store Union, and the Interfaith Center for Corporate Responsibility rejected the FLA as too weak and left the organization. These groups complained that the code failed to require payment of a living wage; had weak language with respect to union rights in nondemocratic countries; and had a weak monitoring and verification mechanism.

Workers in sweatshops are usually young women and immigrant workers that are desperately poor and work long, long hours, sometimes up to 20 hours a day and their wages still do not total a workable wage to feed and clothe their families. The workers are often denied bathroom breaks and forced to undergo pregnancy tests and take birth control, so the companies do not have to pay maternity leave costs. The workers often suffer verbal and physical abuse and struggle to complete high quotas each day.

Many Americans enjoy having the luxury of buying their clothes from popular brandname stores for bargain prices. Yet countless American consumers are unaware that low-price fashion comes with a high cost. Factory workers across the globe operate for hours each day under unsuitable conditions, producing garments that are later sold in the U.S. Possible solutions to improve garment factory conditions, such as the shutting down of factories or the organization of unions for workers, are controversial because many argue that solutions like these will not truly benefit workers. However, if there are rules and standards set for garment imports, then industries will have no other choice but to improve conditions for their employees. Given the low wages, unsafe labor conditions, and the social impact of child labor in the garment industry of developing countries, the Federal Trade Commission (FTC) must establish a practical and fair set of regulations by which garments can be imported into the United States.

Having a background awareness of the issue of poor garment factory conditions in the greater historical context of labor generally is crucial to an understanding of the specific issues we are grappling with today. The concept of a ‘sweatshop’ has existed in developing countries as well as in the United States for over 150 years. The term is used to describe a working environment in which “conditions are harsh, hours are long, and pay is low”. The U.S. Department of Labor defines a sweatshop as a factory that violates 2 or more labor laws. From the 1911 Triangle Shirtwaist factory fire to the 2013 Bangladeshi Rana Plaza factory collapse, major historical accidents have occurred due to substandard working conditions. There have been anti-sweatshop movements made, but the problem still widely exists today. The Triangle Shirtwaist fire in New York City, for example, spurred action to improve standards, and labor unions such as the International Ladies Garment Workers Union pushed for labor reform laws. Nevertheless, little is being done to build upon these gains, and today, “too many employers are failing to obey the labor and workplace safety laws that were enacted in the years following the Triangle Shirtwaist fire”. In addition, many U.S. garment manufacturers have shipped the production of garments to developing countries where the labor is cheaper. The inadequate conditions of garment factories spur too many major accidents and problems, and action to improve these surroundings is essential.

Low-wages and unsafe conditions are some of the most dominant issues in the garment industry, and the wellbeing of factory employees is affected across a wide range. Workers do not get paid a living wage, are prevented from forming unions, and can be fined for making such small mistakes as “forgetting to turn the lights off,” or “showing up to work late”. In Bangladesh, there are “5,000 or more factories attracted there by low wages and a large supply of available labor”. A 2013 report stated that Haiti’s minimum wage was supposed to increase in January, but that “it did not affect Haiti’s 30,000 assembly factory workers” and recent studies “found rampant wage theft at almost two dozen of the factories that stitch clothing for companies like Gap and Walmart”. Furthermore, the truths of the conditions in factories are also often hidden when inspections occur. An inspection of workers’ wellbeing at the Rosita Knitwear factory in northwestern Bangladesh received a high grade, but 10 months afterwards, workers stormed through the factory, “accusing management of reneging on promised raises, bonuses and overtime pay,” and some claimed that they had been “sexually harassed or beaten by guards”. The employees’ complaints remain silent in the inspections, and poor conditions continue. These are just a few of the ongoing difficulties garment factory workers face.

Low pay and long hours also have a negative impact on working mothers, and child labor is one of the results of economically struggling families. Often families cannot afford to provide a proper education for their children, and even if they can, children frequently must drop out of school, and then they will have to work. Child labor is one of the biggest problems with factories in the garment industry. According to the United Nations, India, for example, “has become the world capital for child labor, employing over 55 million children aged everywhere from 5 to 14”. According to a 2006 report by the Institute for Global Labor and Human Rights, children working at the Harvest Rich factory in Bangladesh reported “being routinely slapped and beaten, sometimes falling down from exhaustion, forced to work 12 to 14 hours a day, even some all-night, 19-to-20-hour shifts”. These severe social impacts of child labor must cease in an improvement of garment industry conditions.

There are multiple solutions that could be attempted to improve the conditions of garment industry factories, but they must truly benefit the workers. If factories around the world were to be suddenly shut down, for example, millions would abruptly be without work, and the economy of countries receiving imports from these factories would be hurt. A frequently suggested solution is to have workers organize unions, but there is no guarantee that with the formation of unions, overall worker conditions would improve. It would also be extremely difficult to try and enforce the allowance of unions in developing countries, as many factories hide the fact that they are restricting workers ‘rights. A New York Times examination reveals how although inspection systems are “intended to protect workers and ensure manufacturing quality,” they are “riddled with flaws.”

Another solution proposed is for companies themselves to band together with each other to stand up against unsafe factory labor conditions. However, this is proving to be less impactful, due to the facts that inspection systems are flawed and demand for low-priced goods remains high. The resolve is weakened when the story is not in the media spotlight. Perhaps the best possible solution is to have strict and organized regulations placed on garments in the United States that determine whether the source treats its employees fairly.

Part of the job of the Federal Trade Commission is to “prevent business practices that are…deceptive or unfair to consumers” and to “protect consumers by stopping unfair, deceptive or fraudulent practices in the marketplace”. Thus, it is appropriate to task the Federal Trade Commission with setting the regulations for garment imports. These regulations should establish a set of ground rules by which factories must operate, if the goods they make are to be imported into the U.S. Some of these ground rules might include a maximum 12-hour work day, a fair and living wage which would have to be determined by any given country’s economy, the right to take at least one break per day, adequate ventilation, an emergency evacuation plan, and enough lighting. If any garment imports do not meet these standards, then they will not be allowed into the U.S. Garment industries often tend to engage in a “race to the bottom” policy in which they “cut back on regulation and enforcement of decent working conditions in order to lower labor costs”. With regulations set in place, public awareness will be raised about these policies and pressure will be placed on garment industries to improve conditions.

Without a solution to the continuing issue of unsafe labor in garment factories, there will be many repercussions. Laborers employed in mass garment industry factories in developing countries will continue to be deprived of substantial wages to provide for themselves and their families. Workers will face daily risks and unsafe conditions in factories, and there will most likely continue to be numerous incidents involving workplace fires and collapses. Many children will still be forced to quit school in order to go to work, where their chances of getting a better, more educational job in the future will often be corrupted. Countless consumers will also continue to buy into the poor conditions of so many workplaces, often unknowingly or even because they must, seeing as “98% of clothes sold in the U.S. are made overseas, according to the Apparel and Footwear Association”.

Some people who are aware of the problems in garment factories make the argument that sweatshops are beneficial to workers because they help alleviate poverty and boost economic development. There is a certain notion that low-wage work is better than no work at all, and “although conditions are horrendous, they provide a means for many of the country’s least-skilled people to earn livings”. However, this is not the case, as sweatshop workers are “trapped in a cycle of exploitation that rarely improves their economic situation” and often “countries’ minimum wages are insufficient to climb out of poverty,” so no economic progress can ever be made. Furthermore, garment industry employees must spend nearly all their paychecks on food for their families in order to survive. Other critics of solutions to improve garment factory conditions worry about the price of clothing going up, and they make the claim that changes in American garment regulations will threaten many retailers. There is a possibility that a set of regulations could harm retailers in the U.S., but the improvement of both garment factory conditions and the lives of workers in developing countries is a top priority.

The FTC must establish a set of rules that determine which garments can be imported into the United States because of low wages, unsafe labor conditions, and the social impact of child labor in the garment industry of developing countries. For too long, the U.S. has ignored the existence of garment-producing factories with employees working under unacceptable conditions. Due to many factors, including mass marketing, Americans are usually either unaware of where their clothing is coming from, or they simply do not care where it comes from, and with the continuing support and purchase into unsafe labor factories, no changes will ever be made. It is time to focus on the sources of American imports and work to achieve real and meaningful improvements in the garment industry.

Free Trade Vs Fair Trade

As the name suggests, free trade is the unrestricted flow of products, services, labor, and capital across the country’s geographic borders without any government intervention on behalf of the economy or regulatory obstacles. The term ‘free trade’ is often contrasted with ‘fair trade’. In the simplest sense, the term ‘fair trade’ refers to the buying and selling of goods and services that are paid to producers fairly and equitably. It is an international social movement made up of countless producers, companies, consumers and organizations whose purpose is to improve the environment and labor standards.

What Is Free Trade?

Free trade, as its name suggests, is to open trade barriers in the international market. Free trade involves bilateral agreements between countries that allow the import and export of goods without restrictions. Although free trade has improved the efficiency of the global market by promoting economic growth and lowering commodity prices, it also has its shortcomings. Due to certain business infractions, such as the use of cheap labor, products may become cheaper.

What Is Fair Trade?

Fair Trade is a trade association based on dialogue, transparency and respect. Its main objective is to seek greater equity in international trade. Its purpose is to provide better business conditions and protect the rights of marginalized groups, provide better wages, standard working conditions and protect child labor. This type of trade attempts to regulate trade based on concerns about possible irregularities when trading with certain countries. Violations can be environmental conditions, human rights violations, and labor laws. Fair traders express their concerns through private actions, such as boycotting products produced by child labor and passing government regulations. This type of trade attempts to regulate trade based on concerns about possible irregularities when trading with certain countries. Violations can be environmental conditions, human rights violations, and labor laws. Fair traders express their concerns through private actions, such as boycotting products produced by child labor and passing government regulations.

Comparison of Free Trade and Fair Trade

• Objective: the main objective of free trade is to promote the development of a country, while the main objective of fair trade is to empower marginalized groups in the community.
• Economic theory: according to economists, the indirect costs of free trade are lower, so the prices of products are lower, due to strict working rules, fair trade prices for goods and services are high.
• Trade regulations: there are few regulations on free trade and cross-border exchange of goods and services, however, in fair trade, companies work hand in hand with marginalized groups.
• Beneficiaries: free trade is mainly beneficial to enterprises in the import and export industry, however, fair trade benefits small business owners in the community.
• Practice: free trade focuses on trade policies between countries, while fair trade focuses on trade between people and enterprises.
• Main participants: free trade mainly involves bilateral negotiations between countries, so the government is more involved in it, on the other hand, fair trade involves merchants and small business communities.
• Impact: free trade brings changes through the market and government policies, while fair trade brings changes through community improvements.

Free Trade or Fair Trade

In view of the above differences, fair trade is better than free trade. This is because fair trade aims to produce products that do not exploit labor and the environment. However, regardless of the mode of production, the goal of free trade is to generate more profits. Ideally, a prosperous economy can be achieved through the coexistence of free and fair trade. Fair trade helps poor farmers, artisans and producers with fair and reasonable prices that cover production costs. It also allows them to obtain interest-free loans or loans at nominal interest rates. It guarantees fair prices, safe working conditions, protection of natural resources and no forced child labor.

Conclusion

In general terms, free trade is an agreement that establishes that participating countries can import and export goods without tariffs or other non-tariff trade barriers. On the other hand, fair trade is equity for the labor community in terms of prices, working conditions, sustainability and terms of trade. Therefore, in all discussions, I prefer a fair trade system, which benefits small business owners and protects the rights of marginalized groups by providing better wages, standard conditions and protecting child labor issues.

Definition Essay on Fair Trade

The right to food is something that every single human being should not have to worry about. The right to food should follow under these three terms, Availability, Accessibility, and Adequacy. Being able to get food wherever, Accessibility is vulnerable to people like children, the elderly, people with disabilities. Food is affordable without other things having to suffer for cost. Such as medical care, education, or household fees. And Adequacy means the food is completely safe for any humans to eat and satisfy their dietary needs. Finally, the right to food is not having to worry about what is going down to get your food to where it is now. Meaning that our environment was not harmed in getting this food to us and that everyone working to get this food for us is being treated with all fairness, along with being safe. This is where Fair Trade comes in.

What is fair trade? “trade that satisfies certain criteria on the supply chain of the goods involved, usually including fair payment for producers; often with other social and environmental considerations” (thefreedictionary.com) Fair trade is eliminating child labor, eliminating unfair payment to the workers, and eliminating working in horrible conditions.”A fair trade product is helping the environment by not having dirty disgusting air in the slave buildings. A non-fair trade product will be contributing to the environment. A fair trade product is saving someone’s life. A non-fair trade product is just one step closer to contributing to someone’s death.” (Thursday, 7 July 2011 by Rara)

The process that is done so that those things can be a reality is having groups of people who want to be there to work working together so no one is being forced against their will. That is getting rid of having slaves in our world who would work all day just to get paid nothing and in dangerous situations when then the product will be brought to our society and be sold for a high price. Fairtrade is taking care of this by now paying each worker at least a minimum payment, instead of the price fluctuating all the time and possibly worrying about if the workers will get paid fully or at all sometimes. Now there is also a fairtrade premium that all these groups of workers are paid back from their products which with that money they get to decide where they would like to spend it on, for example, better farming equipment, hospitals, housing, medical care, or wells along with many more things they could use for their communities. This is what fair trade is making available for these 3rd world countries.

Canada is a big part of fair trade as well, Fair trade wouldn’t be able to work if someone isn’t making sure all these requirements are being followed. “The international Fairtrade system represents the world’s largest and most recognized fair trade system. We are a global organization working to secure a better deal for farmers and workers.” (http://www.fairtrade.ca) Canada is following high standards to keep fair trade working at its maximum capacity. Like upping the sales of fairtrade products in canada, Having the absolute best benefits and care for these farmers and workers. Making sure the environment is being taken care of like making sure the workers are not using excessive water, instead they are collecting lots of rainwater to use for other things. Not using genetically modified organisms (GMOs) isn’t aloud to try to enhance the growing time and size, not the products. This way they are preserving the environment. All these rules and claims that are made and needed to follow by canada so that fairtrade is being run right are made up by Fairtrade who will consult with international producers, businesses that are selling fair trade, along with all and any members of the entire fair trade system. Fairtrade producers have a 50% say in key decisions, and there are over 30,000 producers on sale for fairtrade. (http://fairtrade.ca/) Finally, one last example of what canada is doing for fairtrade is the money they are giving back to the workers in the 3rd world countries. The fairtrade premium is the money we give back from making off the fairtrade products that are sold. An example is fairtrade sugar sent back $115,000 in fairtrade premiums back to sugarcane smallholders last year. With that money, they used it to improve farming techniques and they invested in schools, which helped thousands of farmers and families take control of their lives. Another example is buying fairtrade flowers. Every 10% of a stem or a bunch of flowers is sold it goes back to the fairtrade premium. Which then was put into health care, social benefits, and education, etc. (http://fairtrade.ca/)

Analytical Essay on Fair Trade Cocoa Products

Cocoa is used in a wide variety of products, ranging from cocoa powder to cacao nibs to beauty products to chocolate. However, Nestle, one of the biggest companies that sell such products, does not use Fair Trade Certified cocoa. Instead, they use Rainforest Alliance-certified cocoa, which can be harvested from farms that utilize child labor andor slavery. Although they promised to discontinue their use of cocoa sourced from such farms, they failed to keep this promise. Additionally, the farmers that harvest cocoa often does not earn enough to support their own basic needs, which is exacerbated when terms of trade do not work out in their favor. As a result, these farmers are stuck in poverty and may resort to using child or slave labor in order to make ends meet. To ensure that cocoa farmers are paid a fair wage, reduce illegal activities within cocoa production, and improve the company’s reputation, Nestle should educate the public on why buying Fair Trade cocoa products is good and prioritize sourcing cocoa from Fair Trade farms.

Cocoa farmers typically struggle to earn enough to support their own needs. On average, cocoa farmers only earn roughly 6% of the final value of a chocolate bar. This is hardly enough to support their own needs, even if multiple family members work on a farm. As a result, these farmers are often stuck in poverty. Although the Rainforest Alliance does offer additional cash payments for certified crops, they do not offer a minimum price. It is possible for them to earn more than a Fair Trade cocoa farmer, but the lack of a guaranteed minimum price means that their earnings may not be very consistent and the risk of being paid little is still present.

Non-Fair Trade cocoa farms frequently utilize child andor slave labor. Sourcing cocoa from these farms indicates to consumers that Nestle does not care much for human rights, thus damaging the company’s reputation. Salaam-Blyther, a foreign affairs analyst, found that “Approximately 284,000 children were found to be working under hazardous conditions, the large majority in Cote d’Ivoire (200,000).” While the number of children working under hazardous conditions may be different today, some children are still forced to work on these farms. Willingly buying cocoa from such farms, regardless of whether or not Nestle knows the farm uses child slave labor, implies that Nestle values cheap products over human rights. The Rainforest Alliance requires that all certified products meet their standards for ecosystem protection, safeguarding local communities, and improving productivity. However, they only require that a 30% minimum of a certified product meets those standards. Although they require that producers eventually have 100% of their products meet those standards, the risk of cocoa products potentially being produced by child slave labor is still present in Rainforest Alliance-certified cocoa. Sourcing cocoa from farms that use child slave labor clearly tarnishes Nestle’s reputation, but that is not the only issue that damages the company’s reputation.

Nestle’s reputation is currently quite poor due to a wide variety of factors which includes its sourcing of cocoa from farms that use child andor slave labor. In October of 2020, Nestle announced that they would source Rainforest Alliance-certified cocoa for their KitKat brand. Although Rainforest Alliance cocoa does help cocoa farmers to some extent, the organization’s enforcement of ensuring that products meet their standards is rather weak. Investigations led by the Thomas Reuters group found that workers at some Rainforest Alliance-certified tea estates were “taking home as little as 26 Sri Lankan rupees (14 U.S. cents) a day after fees and deductions were levied without consent.” Moreover, after Rainforest Alliance merged with Utz (another auditing organization), Utz officials found that monitoring did not lead to “sanctions of any farmers or co-ops, and no approvals for any batch of cocoa were rescinded.” Another investigation by the Thomas Reuters group found that a number of Rainforest Alliance-certified coffee farms in Minas Gerais, Brazil had committed labor violations, but the actual amount of certified farms committing these violations is unknown. These shortcomings are indicative that Rainforest Alliance is not exactly ideal for ethically produced cocoa products, and ethically produced product is something that Nestle has struggled with for a long time. Nestle’s track record is exceptionally poor and includes child slave labor, unethical promotion, price fixing, mislabeling, pollution, and even manipulating uneducated mothers. It is only natural that the public generally despises Nestle and chooses to not purchase its products. The solution to these problems comes in two different steps.

The solution’s first step is to educate the public on why buying Fair Trade-certified cocoa is better than buying non-Fair Trade-certified cocoa. Orla Ryan, a journalist hired by Reuters to cover the West African cocoa industry, wrote that “Chocolate companies had a lot to lose from the media’s interest in child labor…They also feared the impact of these stories on consumer sales. ‘They live in fear of the headline which could lead to the boycott’, one industry lobbyist told me.” Considering that chocolate companies fear how the public would respond to them sourcing cocoa from farms using child labor, educating them on why buying Fair Trade cocoa is good could convince a sizeable portion of them to buy Fair Trade cocoa products andor reduce consumption of non-Fair Trade products. Of course, educating the public about the benefits of Fair Trade-certified cocoa is not enough, nor is it the only step in supporting cocoa farmers and improving the company’s reputation.

The solution’s second step is to source more cocoa from Fair Trade farms and sell more Fair Trade-certified products. Salaam-Blyther notes that “farmers who sell to Fair Trade buyers receive a minimum of $1,750 per metric ton ($1,950 per metric ton organic). If the world price rises above $1,600 per metric ton, the Fair Trade price meets the world price and adds a $150 premium per metric ton ($200 premium per metric ton for organic). In exchange for receiving above market price sales, farmers must not use forced or child labor.” Fair Trade cocoa discourages the use of child slave labor and provides increased returns and compensation for any increased costs. The farmers can support themselves and their families better with this additional money, as Salaam-Blyther also noted that farmers are required to reserve a portion of their revenues for social projects, such as community development and technical training.” Fair Trade cocoa also helps develop the farmers’ communities by providing the funds to build and improve schools and gain access to clean water. Ryan proves this, as her coverage of the West African cocoa industry found that Kuapa Kokoo farmers used the money they received from Fairtrade “to build schools, hand-dug wells, and water pumps, to pay for a doctor to travel to farmers in remote rural areas, and to make small loans to producers.” The benefits of Fair Trade cocoa may already be quite apparent, but these are not the only benefits that can arise from this solution.

Educating the public on Fair Trade cocoa will hopefully convince them to buy more Fair Trade cocoa products andor reduce consumption of non-Fair Trade cocoa products. Fair Trade cocoa products have a guaranteed minimum price, fixed premium for community projects, additional premiums for organic farming, and more. Spreading crucial information on what Fair Trade is, what Fair Trade does, and how it supports farmers will make consumers more likely to buy Fair Trade products. “All the tea, coffee, sugar, hot chocolate, and bananas at high street giants Greggs are Fairtrade…With more supermarkets and mainstream brands than ever selling Fairtrade, the sums don’t add up for those saying it’s more expensive.” Selling Fair Trade cocoa products can be even more profitable for Nestle than selling non-Fair Trade cocoa products. In order to ensure that these Fair Trade products can be certified as such, cocoa will need to be sourced from Fair Trade farms.

Sourcing more cocoa from Fair Trade farms will ensure that cocoa farmers are paid a fair wage (which reduces the need for child slave labor) and improve the company’s reputation. “If the price of a Hershey bar went up two cents, or Mars two cents, and that money was just devoted to the eradication of child labor, they would have more than enough.” (Ryan, Chocolate Nations: Living and Dying for Cocoa in West Africa, pg. 44) By increasing how much a cocoa farmer earns, they won’t need to utilize child labor as frequently, since some child labor is just children learning how to grow cacao or helping out on the farm. Transparency in cocoa sourcing is also incredibly important for boosting the company’s reputation. The Hershey Company has a Sustainability section on its website, where any individual can access corporate documents on their cocoa sourcing, supplier code of conduct, slavery and human trafficking statement, sustainability reports, CSR reports, and more. These corporate documents are very clear on the subjects they concern and provide detailed information about them. For example, the Hershey Company’s Supplier Code of Conduct clearly defines its standards for the prohibition of child labor as “No individuals are hired under 15 years of age, or 14 years of age where local law allows, and the such exception is consistent with ILO Convention No. 138

Free Trade VS Fair Trade: Pros and Cons

“Fair trade is Essential”

Many people claim that everyone benefits from free trade. Others argue that fair trade is more important than free trade because it can lead to free trade. If we lived in an ideal world where all things were equal, free trade would be excellent. Unfortunately, nowadays, the market is unequal. The following essay takes a look at both sides of the argument between equal and free trade those submitted by Ngaire Woods from Oxford University, and Jagdish Bhagwati, professor of economics and law at Columbia University.

When it comes to the fair play debate, Ngaire Woods fights for fair trade. Wood argues that it is “important to prevent a political reaction against commerce itself. So, both the processes and results of commerce should be fairer. “He clarifies the reasoning for fair trade as a means to protect trading itself. Doing this would resolve trading goals with other important national goals such as environmental and social protection” (Woods, 2010). Therefore, fair trading is often criticized as protectionism. Protectionism means that a country has laws or other rules that make it easier for its own products and brands to sell by making goods from foreign countries more expensive or harder to get. The idea of protectionism is to stop imports. In other words, the use of protectionism could help the development of African countries and improves the lives of millions of people. In fact, destroying these protections and desires could make the African market uncontrollable and fee some high costs.

According to Jagdish Bhagwati, “If the demand for fair trade in the sense of demanding reciprocity in openness leads to others reducing their trade barriers, that is good. But if it leads to closing of one’s own, because others do not yield to such demands, that is bad”. In other words, free trade is good as long as we use some of the economic gains to make sure that those who are affected are provided for. The concern most people have with free commerce is, it can lead to a loss of jobs for the net importing country if the rise in net imports is not equalized by something such as a tax reduction. Basically, when you raise the amount of low-priced stuff that you are smuggling, you raise the amount that is for sale, but you don’t increase the buying control. The result is that the new imports are bought and only a serving of the original local production is bought (because there isn’t enough purchasing control to buy it all anymore). The unsold percentage of national production will eventually lead to local job cuts. Conflicting this if you are the importing country you should do things like cut taxes to upsurge the amount of money in consumers’ hands, so they can buy all those new imports plus what is being produced nationally.

In my opinion, fair trade is more important than free trade. I strongly believe that if something is fair such as trade it doesn’t need to be free. If you are in the trade business with another country trade should be fair. Let’s look at it this way when it comes to free trade, big corporations have higher power, which means trade can be free but not necessarily fair, leading to the rich becoming richer and the poor becoming poorer. The issue with Free Trade, it sometimes benefits one country more than the other, while it tends to benefit large corporations more.

Taking everything into account, fair trade allows everybody to operate on an even playing field. Foreign trade laws are required to give opportunities to all countries and prevent certain trade organizations from being profited from. If we are all playing on the same level, then everybody gets a fair share. Otherwise, certain countries with more money change their trading system.

References

1. Ngaire Woods, from “Fair Trade: The Proposer’s Opening Remarks,” The Economist (May 4, 2010)
2. Jagdish Bhagwati, from “Fair Trade: The Opposition’s Opening Remarks,” The Economist (May 4, 2010)