free trade fair trade

3065 WordsApr 19, 201413 Pages
“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

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