When people are debating whether free trade or fair trade is considered to fit better for international trade, they argue about the benefits and disadvantages of the two. Free trade is a policy in international markets in which governments do not restrict imports and exports. The opposite of free trade would be protectionism, which policies should support local employment through ways such as building tariffs to imports or subsidizing to exports. On the other hand, fair trade is considered as part of free trade. Fair trade focuses more on helping the producers to get the profit they ought to have. In the international trade system, agricultural countries often do not benefit from international trade. Fair trade believers want to guarantee the profit for the farmers and improve their economic status. In order to maximize the positive effects and minimizing the negative effects, what kinds of rules or incentives should take place? What role do global trade regimes play in implementing these rules? What are the rich countries’ incentives to subsides its industries or companies? These are all valuable questions people should consider before trying to improve the international trade system.
In order to improve the international trading system, the promotion of fair trade is relatively important. Fair trade does not only ensure the profit for poor farmers, it also helps the poor countries to develop their economy. However, there are still many flaws in the current fair trade system. The lack of a supervisor to oversight the process and ensure that money actually flows to the farmers concerns many people. Although the item might be marked as a fair trade product, the consumers could not ensure that the money they spent will actually help the farmers; the “middlemen” might absorb most of the profit. On the other hand, free trade creates competition between companies that leads to the advance of technology, reduction of cost and prices, and economic growth. Yet, some people still believe that many imperfections exist in the free trade system. For example, domestic industries in MEDCs move to states with lower labor cost that cause unemployment in MEDCs. In addition, free trade agreements might harm states that are have a weaker economy and are often being dominated by the rich countries. However, the combination of the two, free trade and fair trade, will largely improve the international trade system.
One method to improve the international trade system is to ask the WTO or other related NGOs/IGOs to supervise the process of fair trade and promote the importance of it. The money that the consumers spend should be fairly fallen into the farmers’ hands. With the supervision of these organizations, fair trade will be more feasible and it will also increase the recognition of the situations of these farmers. Another method to improve the international system is to modify the rules of the WTO. Currently, the members of the WTO are selected by how many aid the country is donating. Although this might be reasonable for the rich countries, it is not fair for the poor countries. International trade turns from a tool to improve their economy to a disaster that destroys their economy due to the fact that poor countries are the ones that have most urgent economic problems to be solved. In order to improve the international trading system, the supervision of a NGO/IGO, or the WTO must be permitted, and poor countries must have chances to speak for themselves and persuade the rich countries.
In order to improve the international trading system, the promotion of fair trade is relatively important. Fair trade does not only ensure the profit for poor farmers, it also helps the poor countries to develop their economy. However, there are still many flaws in the current fair trade system. The lack of a supervisor to oversight the process and ensure that money actually flows to the farmers concerns many people. Although the item might be marked as a fair trade product, the consumers could not ensure that the money they spent will actually help the farmers; the “middlemen” might absorb most of the profit. On the other hand, free trade creates competition between companies that leads to the advance of technology, reduction of cost and prices, and economic growth. Yet, some people still believe that many imperfections exist in the free trade system. For example, domestic industries in MEDCs move to states with lower labor cost that cause unemployment in MEDCs. In addition, free trade agreements might harm states that are have a weaker economy and are often being dominated by the rich countries. However, the combination of the two, free trade and fair trade, will largely improve the international trade system.
One method to improve the international trade system is to ask the WTO or other related NGOs/IGOs to supervise the process of fair trade and promote the importance of it. The money that the consumers spend should be fairly fallen into the farmers’ hands. With the supervision of these organizations, fair trade will be more feasible and it will also increase the recognition of the situations of these farmers. Another method to improve the international system is to modify the rules of the WTO. Currently, the members of the WTO are selected by how many aid the country is donating. Although this might be reasonable for the rich countries, it is not fair for the poor countries. International trade turns from a tool to improve their economy to a disaster that destroys their economy due to the fact that poor countries are the ones that have most urgent economic problems to be solved. In order to improve the international trading system, the supervision of a NGO/IGO, or the WTO must be permitted, and poor countries must have chances to speak for themselves and persuade the rich countries.