Globalization and International Commerce

1632 Words4 Pages

Introduction

Globalisation has been one of the most significant developments of the last half century, and issues such as trade and international commerce have become increasingly important. In consequence, problems such as poverty, unfair wages and poor working conditions in third world countries have been drawn to the attention of consumers (Hayes and Moore, 2007). This is a growing global issue which cannot be ignored by anyone concerned about the problems in developing countries. Free trade and Fair Trade have both been offered as solutions to these issues.

Fair Trade is considered as an alternative trading system, which aims to protect the economically disadvantaged producers, especially in developing countries. It provides transparency and respect in international trade (Gingrich and King, 2012). Besides, Fair Trade also contributes to sustainable development by offering better trading conditions for marginalised producers and workers and securing their rights (Mohan, 2010).
On the other hand, free trade not only gives primacy to market forces, it also reduces trade barriers such as tariffs and quotas and requires the harmonisation of trading rules (Hayes and Moore, 2007). It arises from the free choices of producers and consumers, which is why it is often believed that Fair Trade is derived from the system of free trade.
The term “suppliers” in this context refers to the farmers and producers in developing countries, often running small concerns with limited investment or capacity.

In the long run, despite the apparent advantages of Fair Trade and the opportunities it appears to offer small suppliers, free trade provides a more sustainable development for suppliers than Fair Trade. It is also more effective in incr...

... middle of paper ...

...C. & King, E.,2012. Journals of Cooperatives. [online]. Harrisonburg: Eastern Mennonite University. Available at:< URL:http://www.agecon.ksu.edu/accc/ncera210/JOC%20pdfs/V26/Gingrich.pdf. > [Accessed 20th Feb 2014].
Hayes, M. & Moore, G.,2005. The Economics of Fair Trade: a guide in plain English [online]. Newcastle Fairtrade Partnership. Available at: [Accessed 11th December 2013]

Mohan, S., 2010. Fair Trade Without the Froth: A Dispassionate Economic Analysis of ‘Fair Trade’ [online]. London: Institute of Economic Affairs.

Sidwell, M.,2008. Unfair Trade. [online]. London: Adam Smith Institute. Available at [Accessed 17th Feb 2014].

Sloman, J & Wride, A (2012). Principles of Economics. 8th ed. Essex: Pearson Education Limited.

Show More
Related

  • The Chocolate Sector of Côte d’Ivoire

    1989 Words  | 4 Pages

    Wright, L. T., & Heaton, S. (2006). Fair Trade marketing: an exploration through qualitative research. Journal of Strategic Marketing, 14(4), 411-426. doi:10.1080/09652540600948019

    Read More

  • Causes of the 2008 US Recession

    1519 Words  | 4 Pages

    Brue, S. L., Flynn, S. M., & McConnell, C. R. (2011).Economics principles, problems and policies. (19 ed.). New

    Read More

  • The Pros And Cons Of NAFTA

    1027 Words  | 3 Pages

    Fair trade should give protection to governments from exploitation. For example, small farmers can be protected by giving government food sovereignty. An article from the Chicago Democratic Socialist Organization proposed, “The agreement must return to governments the ability to safeguard food sovereignty by protecting family and small-scale subsistence farmers” (Chicago Democratic Socialist). Rewriting the agreement can protect the small farms and retain jobs for farm workers. The article further addressed an issue discussed previously, “Large-scale importation of basic grains into Mexico is a major cause of the economic collapse of rural communities, which forces millions of undocumented migrants to seek work in the USA” (Chicago Democratic Socialist). Therefore, it would solve problems both in the US and Mexico. It will take efforts of the many to renegotiate NAFTA, and many other terms needs to be added. The general direction should focus on protecting the interest of the general public by restricting corporate powers. Fair trade will reduce the problems caused by

    Read More

  • United States Trade Policy: Current and Future Role in a Global Economy

    2527 Words  | 6 Pages

    ...ystem primarily responsible for promoting global competition. Free trade also promotes shifts in production so as to fit the “comparative advantage” model. Though free trade is widely practiced concerns with how to regulate free trade, something supposedly unregulated, countries have to subject themselves to the controversial institutions of the IMF and WTO. Fair trade policies while potentially creating smaller markets support workers’ rights in both the U.S. and developing nations. Though the pros and cons of globalization continue to be debated the United States can no longer escape its role in the global economy nor can it impose policies that are detrimental to the United States founding ideals. However policies that play towards the advantages of both free and fair trade could stimulate a healthy domestic economy that is also competitive in the global market.

    Read More

  • Krugman's Is Free Trade Passe?

    1098 Words  | 3 Pages

    While free trade has certainly changed with advances in technology and the ability to create external economies, the concept seems to be the most benign way for countries to trade with one another. Factoring in that imperfect competition and increasing returns challenge the concept of comparative advantage in modern international trade markets, the resulting introduction of government policies to regulate trade seems to result in increased tensions between countries as individual nations seek to gain advantages at the cost of others. While classical trade optimism may be somewhat naïve, the alternatives are risky and potentially harmful.

    Read More

  • Economics of the Automobile Industry

    2412 Words  | 5 Pages

    O'Sullivan, A., & Sheffrin, S. (2005). Economics. Upper Saddle River, New Jersey: Pearson Prentice Hall.

    Read More

  • Argumentative Essay On Free Trade

    2081 Words  | 5 Pages

    As Ian Fletcher pointed out in Free Trade Doesn’t Work: What Should Replace it And Why, nations need a well-chosen balance between openness and closure toward the larger world economy (Fletc...

    Read More

  • Business Plan for Beauty Products Company

    3000 Words  | 6 Pages

    Sullivan, A., & Steven M., (2003). Economics: Principles in action. Upper Saddle River, New Jersey : Pearson Prentice Hal

    Read More

  • Different Types of Unemployment

    1050 Words  | 3 Pages

    Tragakes, E. (2012). Economics for the IB diploma (2nd ed.). Cambridge, UK: Cambridge University Press.

    Read More

  • The Benefits of Free Trade

    1275 Words  | 3 Pages

    Free trade in today’s economy allows so much more than just jobs and goods at lower prices for Americans. Compared to the foreign competition, the free trade benefits outweigh any risks the foreign competition might impose on the US. As said by Denise Froning in her article, free trade benefits in four ways. “Free trade promotes innovation and competition, Free trade generates economic growth, Free trade disseminates democratic values, and Free trade fosters economic freedom.” Societies that enact free trade policies create their own economic enthusiasm, nurturing freedom, job opportunities, and success that benefit every citizen. Free trade is the only type of fair trade because it offers consumers the most choices and best standards to improving their type of living. Also by fostering opportunitie...

    Read More

  • Role of Governments in Trade

    1713 Words  | 4 Pages

    In order for international trade to work well, governments must allow the world market to determine how goods are sold, manufactured and traded for all to economically prosper. While all nations may have the capability to produce any goods or services needed by their population, it is not possible for all nations to have a comparative advantage for producing a good due to natural resources of the country or other available resources needed to produce a good or service. The example of trading among states comprising the United States is an example of how free trade works best without the interve...

    Read More

  • Free Trade

    1642 Words  | 4 Pages

    Free trade can be defined as the free access to the market by individuals without any restriction or any trade barriers that can obstruct the trade process such as taxes, tariffs and import quotas. Free trade in its own way unites and brings people together. Most individuals love the concept of free trade because it gives them the ability to move freely and interact with the market. The whole idea of free trade is that it lowers the price of goods and services by promoting competition. Domestic producers will no longer be able to rely on government law and other forms of assistance, including quotas, which essentially force citizens to buy from them.

    Read More

  • Fashion And Fashion Essay

    841 Words  | 2 Pages

    “Fair trade is much more than a buying relationship,” Heyl said. “It’s about developing holistic communities and retaining wealth and talent and education in villages in India”. The model is especially significant for helping women. Heyl said in some communities, women aren’t allowed to leave the house without a man. Everything all at once.

    Read More

  • Argumentative Essay On Free Trade

    1045 Words  | 3 Pages

    Free trade is a form of economic policy which allows countries to import and export goods among each other with no government interference. In recent years there has been a general consensus in economist’s stance on free trade. They view free trade as an asset. Free trade allows for an abundance of goods with increased varieties and increased availability. The products become cheaper for consumers and no one company monopolizes an industry. The system of free trade has been highly controversial. While free trade benefits consumers it has the potential to hurt manufacturers and businesses thus creating a debate between supporters of free trade and those with antagonistic positions.

    Read More

  • Advantages And Disadvantages Of International Trade

    921 Words  | 2 Pages

    International trade is an economic practice where countries can import and export goods with no concerns to government intervention which includes tariffs and import/export bans or limitations. International trade has several advantages on developing countries; who are nations with low levels of economic resources or low standard of living. Developing countries can advance their economy through strategic free trade agreements. Free trade generally improves the quality of life of poor nations. Nations can import goods that are not easily available within their borders; importing goods may be cheaper for than trying to produce consumer goods. Many developing nations do not have the production procedures available for translating raw materials into valuable goods.

    Read More

More about Globalization and International Commerce

Open Document