The Arguments of Fair Trade Weighed Up
many non- European countries, it has reaped many economic benefits. In terms of consumers,free trade can benefit them in a significant manner. Free trade enables manufacturers to attainthe means of production more cheaply with the cheaper costs of production being passed onto consumers. In cases where the domestic market cannot compete effectively with cheaper alternatives from foreign countries, free trade forces the manufacturers to meet the standardsand quality expectations of the countries they are exporting to (O’ Brian and Williams, 2007:149). This has the benefit of raising living standards as the proportion of income needed to purchase goods is significantly reduced.While I have examined some of the direct effects of free trade, it is important to look at thealternatives to free trade and some of their negative aspects. Protectionist policies are themain counter point to free trade. They aim to “expand domestic production in the protectedindustries, benefitting the owners, suppliers of resources to the industry and the workers inthe industry (Coughlin et al., 2000: 308). These policies usually manifest themselves in theform of tariffs and quotas and also non tariff barriers with the aim of discouraging foreignimports of products of the same type as the protected industry. Immediately consumers looseout due to the fact that prices will inevitably rise as the supply of these goods reduces.Moreover, consumers will unavoidably reduce their consumption of other goods, detractingfrom the economy. Furthermore, if countries are faced with the prospect of trade barriers asthey trade with one country they will reciprocate and erect their own barriers to trade. It has been suggested that the Great Depression of the 1930s was the result of the adoption of theSmoot-Hawley tariff of 1930 which resulted in equivalent retaliation by the trading partnersof the United States and resulted in a prolonged period of economic decline (O’Brian andWilliams, 2007).