The global trade is abig business today and it will grow even more important throughout thecenturies.
Trade relations adjust each nation to produce what it is most proficientof producing and to buy what it needs in a mutually beneficial exchangerelationship . While some similarities between free trade and fair trade are evident, the differences are striking.To start with , bothfree trade and fair trade have the same objective of increasing wealth globally.
Free trade is fair trade because international trade does not destroyjobs, industries ,businesses , standards of living, or communities. To thecontrary, trade creates opportunities by creating jobs , expanding the size ofthe market, increasing opportunities for manufacturers, encouraging demand forproducts, allowing us to consume more, giving us more variety, and drivingeconomic growth. Theseare both economic systems that concentrate on the purchase and sale of productsbetween countries and communities.On the other hand, the main difference between the two systems is that free trade is about profits, meanwhilefair trade is about people . Free trade is the transfer of goods and affairs among nations without political or economictrade hindrance or barriers.
In contrast advocates of fair trade argue thattrade between developed countries and developing countries is set in favour of the developed country. Theybelieve trade should take place on more fair and equitable terms, with reciprocaladvantage resulting in both parties. A proponent of free trade would argue against the protectionist measures andsubsidies with which certain industrialized countries protect their agricultural producers againstcompetition from agricultural imports from developing countries. On the otherhand fair trade, contrasting free trade, could be in favor of maintainingtariff blockades to protect producers in small countries who might otherwise have great difficulty in emulating with enterprisesin international markets.
Secondly, the supply chain between fair and free tradediffers considerably . Free trade has a complex supply chain, with many levelsbetween producers and consumers. On the contrary fair trade provides directpartnerships that considers the needs ofindividual communities.
Advocates of fair trade feel that tariffs are necessaryto protect national markets from foreign competition . Some of the argumentsthey use are as follow : Tariffs save jobs and protect industries vital to anation’s security . Also to make competition fair ,we have to take mutualmeasures . Critics of tariff policies or free trade advocates have other ideas.
Their principal arguments are as follows : Tariffs reduce competition andrestrain international trade . They increase inflation and thus raise consumerprices . Debates over tariffs and trade restrictions are a major part ofinternational politics .
In conclusion, I would like to restate that free trade isfair in the sense that both parties always benefit. But predominantly , free trade and fair trade are distinctly different in how they proceed , their supplychain and their main focuses . As long as global trade opportunities grow moreinteresting each day and expanding markets present great potential for tradeand development , “free trade vs fairtrade” will remain one of the mostdebated issues in the economy .