“Completely free trade would be fair. ‘Fair trade’ encourages people to stay in uncompetitive sectors in which they will always be poor.” Discuss.
The concept of the ‘Fair Trade’ initiative can be summarised with reasonable simplicity; “Fair Trade works to alleviate poverty in the global South through a strategy of ‘trade, not aid,’ improving farmer and worker livelihoods through direct sales, better prices and stable market links, as well as support for producer organizations and communities” (Raynolds and Long 2007 16), “promoting a supply chain that delivers value to the producer and buyer more evenly” (Nicholls and Opal, 2004 12). Essentially, it is exchanges, the terms of which meet the demands of justice (Eisenberg 2005). The …show more content…
In such circumstances, free trade is clearly not a balanced trade, and the guarantees that Fair Trade label offers coffee producers; $1.26 per pound (Fair Trade Advocacy Office [FTAO], 2003) with an additional 10% premium for coffee which has been organically certified clearly do offer a lifeline for those potentially at risk of economic as well as physical exploitation. On top of that, such a concept as Fair Trade also pegs coffee value against the dollar, one of the more stable and globally recognised currencies, and considerably less likely to fall victim to extreme devaluation or inflation. Complications do however arise when raising the issue of remaining poor and in uncompetitive sectors, as shall be further discussed in the following paragraph; on one hand free trade can lead to unfair exchange, where as on the other hand fair trade can lead to farmers remaining in poverty due to a lack of inspiration and/or necessity to better ones existence, as long as one is able to feed the family through cultivating a patch of land less than five hectares (2003)one may be less likely to aspire to further gains, thus remaining relatively poor
Fair trade is a market reactive system that wants to abolish global inhumane acts from child labor, poor working environments, low wages, and healthy working conditions. Fair Trade does not control the prices at a local level the producers
Free trade provides opportunity, it provides growth, and it provides struggling nations a chance. With free trade, markets open across national borders and the consumer ultimately benefits from higher quality goods at fair market prices. The producers of such goods now have larger markets to sell to allowing for the opportunity at increased sales, giving the consumer a greater variety of goods that can more individually meet specific demands. Free trade implementation to the United States foreign policy is a developing and revolutionary mindset that will bring prosperity to all parties involved. The United States will benefit from free trade because the market to purchase U.S. made goods and services will increase dramatically
While many see free trade beneficial not only to America, but to all nations as well, others would argue that the entire concept of free trade is now a major misconception. What has become commonplace in the U.S. economy is now “tradition” enough to discourage the very thought of disagreeing with free trade. The incorporation of this government deal has long since been a part of history, making it hard for one to plea the case of operating otherwise. Whether viewed as good or bad, analyzing and recognizing the various factors of free trade only serves as a fundamental measure in strengthening the argument.
While this is a true statement, farmers within the fair trade movement suffer more a bigger burden of cost rather than conventional farmers. Jaffee states that within Oaxaca is an organization Michiza Cooperative where farmers achieve higher income, but growing organic coffee leads to higher costs and more time spent on the acreage to develop healthy coffee beans. Figure 16 shows us the most important crops in Oaxaca in 1991 with corn being number 1 and coffee following in a close second (pg 67). Jaffee states that this is a remarkable statistic “…given that coffee is grown in less that one-quarter of the state.” (pg 67). This shows that coffee is a very important crop within Oaxaca that farmers rely heavily on for their income. The higher income farmers receive from Michiza Cooperative is being used towards mozo’s (hired workers), children’s education, etc. The strength of Jaffee’s argument becomes more apparent when he gathers a statistic where fair-trade households are losing just as much money as conventional families. He states that “Only twelve of the fifty-one families (he) surveyed..actually had a positive net income in 2002-3” (pg 105). Having no income leads to borrowing more money. Although when farmers belong to a fair trade organization, they don’t need to borrow as much as conventional farmers. About 29.2% of fair-trade families have to borrow money each year, wheres 57.1% of conventional farmers borrow money each year (Table 15 pg
One reason why I believe that the European fair trade market is drastically larger than the American market is due to the fact that Europeans are more likely to have a greater understanding of the benefits of fair trade due to the common presence of Fairtrade Towns throughout Europe. These towns serve as a means for consumers to adopt fair trade products and to foster a greater understanding of its benefits by following the interactions of their peers. Bente Halkier elaborates on this theory by stating that such “practices come into being in the processes of activities carried out in front of, together with, and in relation to others” (Halkier as cited by (Wheeler, 2012)) The creation of Fairtrade Towns highlights the stronger presence of European
I actually used this article for last week's paper, but I think it's fitting since free trade is such a hot-button issue during this year's presidential election. "Shattering the Myths About U.S. Trade Policy" discusses 3 major myths about free trade. Over the past decade or so, free trade has been drawing a lot of criticism. Many people argue that free trade is responsible for so many job losses in the manufacturing industry, competing with developing countries lowers our standard of living and increases wage inequality, and that rapid economic growth in countries like China and India led to high oil prices.
The present day global capitalist economy dominates world markets and, though it proves efficient for the industrialized North, it does not favour those living in the Global South. Fair Trade, perhaps today's largest alternative to this system, has existed since the beginning of the 20th century and has been challenging capitalism since its inception. What began as missionary efforts exploded in the 1990s to create what we now know as present day Fair Trade operations. Fair Trade Canada defines Fair Trade as a "system that seeks to change the terms of trade for the products we buy" and ensures that producers and artisans receive the highest possible price for their products allowing them to improve their life situations (Fair Trade International,
Justice technology is described as: “the use of modern technologies to challenge poverty in the United States and the global world.” Many different people use their resources to try and help the poor in the most efficient way. They will teach women, farmers, and others in need, new skills on how to conquer inequality and make their communities and lives better. The goal is simple: these programs were created to help create a sustainable life for the less fortunate. One justice technology program is called Fair Trade USA. Fair Trade USA has helped countless farmers and their communities by helping the farmers create smarter businesses. This program will certify transactions between U.S. companies and their suppliers to make sure farmers and
On one hand, it can be argued that by partaking within these mass production trade systems, one nation can develop economically by providing mass produced products at low prices due to cheap labor and material costs. Here is where things seem to become clouded, the free trade agreement between different countries. It is this agreement that allows different countries to import and export goods with the reduction and or elimination of tariffs. (Globalization Pt. II). However, this hinders all countries on a global scale, as the promotion and exploitation of these unjust working conditions are used to keep under developed countries from achieving a higher quality of
A multinational corporation is one that possesses or controls the manufacture of goods or services in one or more countries aside from the country to which they belong and Fair trade is trade that takes place between companies in developed countries and producers in developing countries where fair prices are paid to the producers. Usually, the prices are more than what the traditional markets would pay. Fair trade generally advocates better pay, working conditions, and fair treatment for farmers and workers. Some issues with Fair trade are:
There will be no clear solution that can solve the problem completely, as it will not happen. Such measures take a considerable amount of time to implement and its effects may take a long time to trickle to the poor marginalized farmers in Nicaragua and other Latin American countries. The fair trade market attempt to solve the problem of price, such as many other systems attempt to solve the larger problem, but instead it has led to more implications. With a mantra to support and represent coffee farmers, guaranteeing fair prices. The need to certify coffee by the FLO has raised burdens on these coffee growers which in turn has decreased the market and demand for certified coffee. Farmers are now selling less of their coffee beans to the Fair Trade price (Linton). Many cooperates and the FLO have argued and proposed increasing the selling price for certified coffee beans, but these efforts fall short, since increasing the prices would discourage consumers from buying fair trade coffee, as well as prevent any future business from expanding and contributing to the fair trade. This has not created any discouragement, instead, Fair Trade certified coffee continuous to be imported, with each year surpassing the previous (Haight, 2011). Even then the demand for Fair Trade coffee has decreased and instead, pushed it out of a
Free trade has long be seen by economists as being essential in promoting effective use of natural resources, employment, reduction of poverty and diversity of products for consumers. But the concept of free trade has had many barriers to over come. Including government practices by developed countries, under public and corporate pressures, to protect domestic firms from cheap foreign products. But as history has shown us time and time again is that protectionist measures imposed by governments has almost always had negative effects on the local and world economies. These protectionist measures also hurt developing countries trying to inter into the international trade markets.
Free trade areas, FTA, are economic integration arrangements in which barriers to trade (e.g. tariffs), exchange of goods and information among member nations are removed. It is arguable to say that fair trade aims to create equilibrium between LEDC's, less economically developed countries and developed nations in terms of trading activities and ethics. In saying this, free trading between more economically developed countries and LEDC's will mean
The film shows the WTO convocation where ministers of trade for countries like Ethiopia share their struggles of being outright ignored and left out of negotiations and they decline the agreements that were forced upon them. At this point in the film, there is a move to look broadly at the WTO, where it goes back to showing Ethiopia’s poor coffee farmers who have to turn to farming chat instead of coffee. Chat is a narcotic plant that people can chew and it is ten times more profitable than coffee. Since it sells for a higher price, farmers have turned to cultivating this instead. The final statistic of the film is that if Africa’s share of world trade increased by only one percentage point, it would generate $70 billion a year, five times what the continent receives in aid.
The fair trade concept, based on the idea of both economic activity and social development, is replete with ethical and sustainable echoes. Ransom (2002 p 20) asks, 'can the