Fair trade and free trade have a lot of goals in common. Both are concerned with global justice, poverty alleviation and global prosperity. But still they differ. Free trade refers to a general openness to exchange goods and information between and among nations with few-to-no barriers-to-trade. Fair trade refers to exchanges, the terms of which meet the demands of justice. Fair trade advocates focus on the wages and working conditions of labor in developing markets. Fair traders suggest that companies and governments should regulate trade to ensure that workers receive a just level of compensation and a safe working environment. And on the other side, free trade means that the producer sell goods without the interference of the government's tax or monetary gifts - tariffs, subsidies and so on.
Economists and politicians alike debate the relative merits of free trade and fair trade. Although both concepts refer to a comprehensive approach to commercial activity, people who favor one approach over the other are often guided by ideological concerns that affect the political regulation of trade activity. Free trade and fair trade address the same subject but from very different perspectives. Proponents of free trade emphasize the reduction in barriers between countries and the elimination of preferential policies that favor countries or specific industries. Free traders believe that a business should succeed or fail based on its ability to respond to the free and open market, without needing special governmental protections to protect the industry or its workers. Many free trade advocates advocate for the elimination of tariffs and subsidies, and oppose regulations that force companies to pay extra for doing business in foreign markets. Fair trade advocates focus on the wages and working conditions of labor in developing markets. For example, a fair trade activist will fight to increase the wage rates of workers and improve their working conditions, especially when a large multinational corporation chooses to pay pennies per hour for labor in one country instead of dozens of dollars per hour elsewhere. Fair traders suggest that companies and governments should regulate trade to ensure that workers receive a just level of compensation and a safe working environment. "Fair trade" as a term is sometimes used to refer specifically to policies that provide a living wage to farmers for their crops, usually above market prices, because local and small-hold farmers often cannot compete on price with large-scale factory farms.
Fair trade and free trade have a lot of goals in common. Both are concerned with global justice, poverty alleviation and global prosperity. But still they differ.
ReplyDeleteFree trade refers to a general openness to exchange goods and information between and among nations with few-to-no barriers-to-trade. Fair trade refers to exchanges, the terms of which meet the demands of justice.
Fair trade advocates focus on the wages and working conditions of labor in developing markets. Fair traders suggest that companies and governments should regulate trade to ensure that workers receive a just level of compensation and a safe working environment. And on the other side, free trade means that the producer sell goods without the interference of the government's tax or monetary gifts - tariffs, subsidies and so on.
Economists and politicians alike debate the relative merits of free trade and fair trade. Although both concepts refer to a comprehensive approach to commercial activity, people who favor one approach over the other are often guided by ideological concerns that affect the political regulation of trade activity. Free trade and fair trade address the same subject but from very different perspectives.
ReplyDeleteProponents of free trade emphasize the reduction in barriers between countries and the elimination of preferential policies that favor countries or specific industries. Free traders believe that a business should succeed or fail based on its ability to respond to the free and open market, without needing special governmental protections to protect the industry or its workers. Many free trade advocates advocate for the elimination of tariffs and subsidies, and oppose regulations that force companies to pay extra for doing business in foreign markets.
Fair trade advocates focus on the wages and working conditions of labor in developing markets. For example, a fair trade activist will fight to increase the wage rates of workers and improve their working conditions, especially when a large multinational corporation chooses to pay pennies per hour for labor in one country instead of dozens of dollars per hour elsewhere. Fair traders suggest that companies and governments should regulate trade to ensure that workers receive a just level of compensation and a safe working environment. "Fair trade" as a term is sometimes used to refer specifically to policies that provide a living wage to farmers for their crops, usually above market prices, because local and small-hold farmers often cannot compete on price with large-scale factory farms.