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Is free trade, fair trade? Are they one and the same or at variance to each other?

What is
your point of view and state your rationale?

Due to the similarity of the phrases there is often confusion and misunderstanding about their

meaning. It is common to hear the terms used interchangeably or to hear the phrase “fair trade” in

contexts unrelated to the fair-trade movement. These two concepts would be discussed in detail in

the body of this discussion. At the end of the discussion, it would be determined if both concepts

are the same or if is a variance to each other.

Free trade is defined as the economic policy of not discriminating against imports from and exports

to foreign jurisdictions. Buyers and sellers from separate economies may voluntarily trade without

the domestic government applying any barriers to trade for example, quotas, tariffs, subsidies or

prohibitions on their goods and services. Barriers to trade, are instruments which are usually

implemented by a government to restrict the flow of international goods and services in a country.

Fair-trade on the opposite, is an organized social movement and market-based approach to

empowering developing country producers and promoting sustainability. It helps to make sure that

the people that produce the products in developing countries get fair pay for their work.

It's when the price we pay for products gives enough to producers for them to afford life's essentials

- like food, education and healthcare. Fair trade was created as an alternative way of doing trade.

It is based on partnership, which means that the interests of farmers and workers are just as

important as other commercial considerations. It also represents a solution to poverty and a model

for development.

The table below examines the difference between free trade and fair trade.
Most Important Factor Free Trade Fair Trade

Most Important Factor Traditional = Capitalism / Profit = Quality = Human


“Neoliberalism” PROFIT is Rights = Environmental
most important Nothing else Sustainability = Justice
(quality, human rights,
environment, etc.) matters as
much as PROFIT
Main Goal: Increase nations’ economic Empower marginalized
growth people; Improve the quality of
their lives
Focuses on: Trade policies on between Commerce among individuals
countries and businesses
Primarily benefits: Multinational corporations; Vulnerable farmers, artisans
Powerful business interests and workers in less
industrialized countries.

It is evident from the above tabular comparison that both free trade and fair trade are indeed at a

variance to each other. Free trade focuses on, profit making increasing a nations’ economic growth

and it exclusive to multinational corporations and other powerful business interests. Fair trade on

the other hand aims at fostering trade within the local land between local producers to promote

sustainability and precipitate commerce among marginalized producers in developing countries.

References:

Pete. "Fair Trade vs Free Trade." GlobeIn Blog. October 03, 2016. Accessed June 03, 2017.
https://globein.com/blog/fair-trade-vs-free-trade/.

"Free Trade Versus Fair Trade: How Do You Take Your Coffee?" SlidePlayer. Accessed June
03, 2017. http://slideplayer.com/slide/7067248/.
Fair trade places restrictions on farmers and producers. It forces them to pay minimum wages,

adopt safe working conditions and pay lip service to planetary protection.

Free trade removes all boundaries for all parties. It affords unfettered international export and

import, free from taxes, tariffs, worker protections or pesky minimum wages.

Globally: fair trade makes things more expensive, free trade makes things cheaper; fair trade

means workers earn more, free trade means workers earn less. So, while free does mean cheap, it

also means we earn collectively less money with which to buy all that cheap stuff.

Key Principles of Fair Trade

 Trading practices are fair and not one-sided.

 Prices paid are fair and sufficient for producers and workers to earn more than enough to

meet their day-to-day needs.


 Payments are often made in advance to ensure the supplier can fulfil orders.

 Producers and workers have a voice, whether organised into groups or involved in

workplaces where there is freedom of association.

 Safe working conditions, non-discrimination and welfare of children.