Why do developing countries need fair trade?
The fair trade movement intends to provide market access to otherwise marginalized producers, connecting them to customers and allowing access with fewer middlemen.-------------- It aims to provide higher wages than typically paid ------------as well as helping producers develop knowledge, skills and resources to improve their lives. The slogan -------- "Trade not Aid", gained international recognition in 1968 when it was adopted by the UNCTAD (United Nations Conference on Trade and Development) to put the emphasis on the establishment of fair trade relations with the developing countries fair trades goal is to give disadvantaged producers in developing countries a fair chance on the world’s market, and support their self-determined sustainable development. to let developing countries have equitable access to the world’s markets and consumers Fair trade movement, aiming "to contribute to the alleviation of poverty in developing regions of the world by establishing a system of trade that allows marginalized producers in developing regions to gain access to developed markets" Fair trade supporters believe current market prices do not properly reflect the true costs associated with production; they believe only a well-managed stable minimum price system can cover environmental and social production costs developing countries need fair trade --------especially african countries ------which focus more on agricultural products---------and different types of trade barriers and quantitative restrictions on goods from developing countries must be removed -------to give them a chance to alleviate their poverty but i personally think ---------fair trade is just a very tiny minuscule of world trade -------it does not amount to much i feel government policies of developed and underdeveloped nations would make much more of an impact on trade conducted by developing nations good luck
Why do developing countries need fair trade?
Dependency theory and the new imperialism have explained the case clearly. Developing countries are weak structurally. If the comparative advantage has determined trade, they must have to produce only primary products or labor intensive products which are disadvantaged in terms of terms of trade. It makes developing countries dependent on developed countries. Moreover, developing countries have not enough financial support to manipulate comparative advantage, or change to higher productivity sector. They are also weak in international negotiation in which developed countries dominate. Fair trade, not aid is therefore only the way out. In is also true that the multinational negotiation in the Doha round cannot proceed to an end. But regional integration and bilateral free trade agreements are the way that gains much applause these days. The US with South Korea,Japan and China with ASEAN are examples. But the issue is still there. Developed countries want to sell more,while keep protecting their agricultural sector in tact.
How does Fair Trade help a country develop?
Fair Trade organizations work with artists and producers to determine a fair price for their craft or commodity that will allow them to exceed their cost of production and be able to improve their lives through more nutritious food, better education, and access to healthcare. In return for strong relationships between fair trade stores, wholesalers and producers, you the consumer will often find some of the highest quality and unique goods on the market. Despite this, fairly traded products typically remain quite affordable since fair trade organizations and companies often don’t incur middleman or high marketing costs. They keep costs reasonable while giving a greater portion of the good’s price to the artist. Fair trade benefits workers and communities by spreading profits more equitably and stimulating the local economy. Profits are often re-invested into community projects, such as health clinics, childcare, and education. Many FT members work directly with producers to develop products based on a sustainable use of their natural resources. This gives the communities a reason to preserve and maintain their environment. Many FT organizations provide financial assistance to producers through loans or by supplying pre-payments so producers can cover the costs of raw materials. Production and development of products based on cultural traditions is encouraged. Fair Trade Member’s finances, policies, and business practices are open to the public. In fact, fair trade tours allow consumers and store buyers to visit many of the cooperatives and family workshops in person. Fair trade is a global effort; it’s working in Peru, Asia, and even the United States. Fair trade is a commitment to various producer groups. This means that a fair trade company strives to continually provide work and help for specific groups and communities. It’s not just a spurt of cash and then back to poverty (or near it) – it’s more than a one time deal.
What are the benefits of international free trade in developing countries?
Think of it as selling lemonade in a cul-de-sac as opposed to selling it on a busy street. Tons more customers on the street, right? International free trade means that developing countries don't only get to sell to their neighboring third-world countries anymore, but to the entire "rich" world.
Free Trade vs. Fair Trade?
Free trade is what it sounds like, trade with few legal restrictions. "Fair Trade" means trade restrictions. These are presented as altruistic efforts to protect the rights of the patronized trade partner (the US is the patriarchal wise helping trade partner) and the environment. However, they have the effect of distorting the trade relationship, skewing the economics often in favor of some favored US industry or region, and hurting the interests of both parties because of the deleterious effect the restrictions have on actual trade. For example, the smart lawyers who determine the rules decide how low a wage is acceptable in the poorer country, then many workers in the poorer country go without employment because they are not productive enough to justify the minimum wage. Another good one is for the wealthy nation's government to subsidize the favored agriculture industry, which can then offer its goods on the world market at artificially low prices, thus pricing the third-world un-subsidized poor farmers out of the market and retarding their development. Meanwhile, the cost to the US of the goods is artificially increased, costing consumers millions. Bottom line: "Fair trade" is bad economics every time. Free trade is always the best way to go. Note: To those clowns claiming free trade hurts the "weaker" country: History clearly shows that free trade benefits both parties, and protectionism (the truthful name for "fair trade"), hurts both parties, and leads to trade war. Japan, South Korea, Taiwan, Germany all came up from poverty to wealth in only decades because of free trade. China and India are the new Asian Tigers, doing the same thing. As they become wealthier, they become excellent markets for US goods and services. Protectionism (See Smoot-Hawley Act) was a big contributor to the Great (Worldwide) Depression. Don't drink the "fair trade" Kool-Aid.
Should we assume the Trade War cant last because China is losing or because USA is losing? How does the Trade War affect the rest of the world?
The honest answer is that both sides gain and lose in this trade war. There are obvious problem with rising costs in the United States and lower revenue due to tariffs for China, but there are always markets that both can swing to. As for the rest of the world, this should be seen as an opportunity to get favorable trade deals from both sides. For example, I’m pretty happy if I’m the EU right now. The biggest threat is that if it continues for some time, China and the US will become less dependent on trade with each other and more dependent on other markets. While that sounds like it might be good for both sides, one of the things that’s kept China and the US from becoming more militarily aggressive to each other isn’t just the destructive cost of war, but the economic suicide that would result from going to war with your largest trading partner. In the long run I wouldn’t think much of it. All of the theatrics and rhetoric amount to what is little more than a very loud trade negotiation and eventually I expect both sides will come out of it with more sensible and fair trade practices towards each other. The US really had to renegotiate NAFTA and we did, despite all the angry rhetoric from both sides, obviously the discussions behind closed doors were far more serious and time will tell what the results were. I hope that helped.