Is Free Trade Fair Trade?
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Is Free Trade Fair Trade?
From the history of the world, there has ever been the need of having the entire globe engaged in forms of trade, which have the ability of increasing their performance and operations thus improving their development in terms of economy. This had been suggested in form of a free and fair trade, which was aimed at ensuring that all nations would engage in useful business and trade operations. However, there have been divergent views with the issue as majority of the people do argue that the present ‘free and fair trade’ operations in the least have never been fair. This paper gives a succinct discussion and analysis on how such trade has not at all been any fair.
Many nations have always been agitating free and fair trade. Free and fair have been two words, which have been used together more often than not. For instance, people have always been talking about fair and free elections. While free and fair trade has been used together, they have been seen to vary meaning. The very loose of alliance with the anti-globalization and very protesters of fair-trade have been arguing for new measures since there is so much uncertainty with the so-called fair trade (Henry & Stiglitz, 2007). To most of these protesters, the issues of free trade have been nothing else but a mere conspiracy in which the rich nations have been getting richer and the poor nations have been on the expense, and have continued to become poorer and poorer. For instance, the World Trade Organization has been an organization, which has been setting strict rules, which do not really favor all nations in the name of a global fair trade.
Is Free Trade Fair Trade?
From the history of nations, there was the need of having a free trade in which all the nations across the world were about to benefit in the greatest. In that case, the need was in coming up with proper measures, which would see different means and modes of engagement thus cutting off all the barriers, which had been facing the earlier trade functions. To have free trade, the tariffs, subsidies, and taxes had to be eliminated thus making it possible to have different nations engaging in such kind of trade (Henry & Stiglitz, 2007). However, it has been proved beyond any doubt that the new form of engagement with this free trade has never been free at all due to the double standards, which have always been put in place. While the world trade organization has been having the role in promoting such a free trade, different measures put in place by different developed nations have continued to make this form of trade unfair.
There has been an increase in protesters who are after making sure that this issue of unfair global trade has been addressed. With historical developments, the developed nations have been greatly taking unnecessary advantage with the free and fair trade in which they have been utilizing a number of internal subsidies, which protect their own people and at the same time exploit the undeveloped nations. In the so-called free trade world, the current protesters have always been claiming that this fair trade has been nothing better but a plot, which has been aimed in developing the world having natural resources while wrecking the environment. On the contrast, a number of liners and laissez-faire ideals and thinkers have been against the free trade.
The international fair trade is a form of trade, which has no interference from any form of tariffs, prices, subsidies, and controls, which have no influence on the logistics, and operations of the trade (Murray & Raynolds, 2007). While having the free trade, the aim has been in coming up with a new prosperity. For the years the free trade has been in place, there have been a number of problems, which have been faced when trying to proof and judge whether this free trade has been fair. Like what socialism has been, it has led to very many problems in which the poor have hardly ever been put into practice wholeheartedly; purists have to look back to Hong Kong in the 1960s for the countries have continued to get oppressed (Henry & Stiglitz, 2007).
Different nations have come up with their own dictated subsidies, which have been able to see them protected while still engaged in the free trade (Ransom, 2001). The other nations have not been given such protection in their trade operations, and therefore their engagement in the trade operations have not been giving them the necessary profits like their counterparts in the other nations. This has been one major reason why most of the third world nations have been keen in coming up with new measures and adoptions which can promote trade operations and make the global trade fair enough. Without addressing this big issue, it is something very true that the current engagement within the global free trade has not been fair the way it ought to be.
Majority of the business and trade participants have been doing this in order to benefit as much as they can. When such people fail to achieve better profits for engaging in such business activities, it becomes something very damaging, and thus calling for newer approaches in which the trade has to be made much fair and effective for all (Murray & Raynolds, 2007). For instance, about two-fifths of all the entire budget for the European Union have been going ahead on subsidizing the farmers while putting the food producers in all parts of the globe at a very unfair and unwelcoming disadvantage (Ransom, 2001). On the other hand, the American farmers and others in the developed nations have been protected by the subsidies, which have been regulated in their nations. This practice of subsidies have been comfortably protecting such individuals and thus failing to give the necessary similar addressing for the exporters from other nations. While the greatest concern in the global trade has been in making it very fair and ensuring all people have been able to benefit from it, that has not been achieved since majority of the players have failed to engage in a truly fair trade.
When the globe has agreed to come up with a free and a fair trade, and some nations impose subsidies aimed in protecting their own people, it becomes something difficult since the system becomes compromised with no much gains expected to them. Majority of the developed nations have not been making the trade fair, as it has to be. This has seen the United States and other developed nations in the European continent totally protecting their people, and at the same time failing to protect the traders from the other nations. When people have been engaged in such trade operations, and the mechanisms do not protect them, it becomes very hard to agree that such a trade has been free (Murray & Raynolds, 2007). The producers of foods and other foodstuffs from the developing nations have been greatly wishing for a fair trade, which has the ability of improving their livelihoods from the income they gain from such trade. In that case, this fair trade has been faced with many situations in which the exported agricultural materials have been purchased at very low prices, which have been set by the global market (Ransom, 2001). Although some of the barriers on the trade might have been removed long time ago, when the least gains are achieved it causes a great deal of concern which needs to be addressed effectively. Because of this, a great number of schools of thought have been keen to agree that the new fair trade has not been fair at all, and especially for the non-developed nations.
Current pairing in trade operations has put aside the functions of the World Trade Organization in which bilateral trading procedures have developed with nations such as China and United States. Being developed nations, the bilateral pairing has only been able to promote their own people without emphasizing much on the other nations (Murray & Raynolds, 2007). Why are these kinds of trade operations very unfair? We shall see that, with the present unfairness existing in the ‘fair trade’, the developing nations within the regions of Africa, Latin America, and other Asian nations have been able to benefit while the trade has itself has been seen to be greatly fair.
The bottom line here is that, most of economists have been able to come to the very agreement that the developing countries have been unable to gain any form of advantage from this fair trade. This has led to an abrupt increase in poverty and failure to eradicate the problems, which have been facing them all along (Ransom, 2001). While they have been praying and anticipating for a kind of involvement in which they may be able to engage in an open and free international trade, nothing better has been realized. Protectionism, which has been held in closed borders in the developed nations, has caused this kind of inefficiency and thus killing the entire opportunity for the key countries in the developing world (Murray & Raynolds, 2007). With the developments in modern investments and technological advancements, it would be expected that better business and trade operations would be recorded but that has never been the case. In short, what has been known as a fair trade has never at all been fair, and especially for the developing nations.
Henry, A. & Stiglitz, J. (2007). Fair Trade for all: how trade can promote development. New York: Longman.
Murray, D. & Raynolds, L. (2007). Fair trade: the challenges of transforming globalization. New York: Oxford University Press.
Ransom, D. (2001). The no nonsense guide to fair trade. New Jersey: Prentice Hall.