Asked by: Deidre Harchenko
business and finance environmental services industry

Is free trade or fair trade better for consumers?

Last Updated: 14th January, 2020

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While free trade aims at attracting more consumers to increase sales turnover and generate more profits, fair trade aims at educating the consumers about the benefits of producing goods without the exploitation of labor or the environment.

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Just so, which is better free trade or fair trade?

Free trade focuses on the reduction of barriers and policies that favor certain countries or industries. Fair trade, however, favors the rights of workers, improved working conditions and seeks to eliminate pay discrepancies from country to country.

Likewise, is Free Trade Fair Why or why not? All trade is fair trade. Fair trade does not entail the government's devising new ways to “protect” American consumers from better products, more variety, or lower prices. Trade is fair when it is free. Trade is fair when it is not hindered by tariffs, quotas, barriers, sanctions, or dumping rules.

Similarly one may ask, why is fair trade better than normal trade?

Higher prices mean limited customers – Fair Trade products tend to be pricier than free trade items. While this is what allows workers to earn a good wage, it can also limit the customer base of Fair Trade products to those who are able to afford them. Others may be forced to purchase cheaper products of less quality.

Who benefits from fair trade?

Fairtrade means fair wages for farmers For most Fairtrade goods there is a Fairtrade minimum price which acts as an important safety net, protecting farmers from fluctuating market prices. This ensures farmers can earn and expect a stable income and plan for their future.

Related Question Answers

Mansur Kirchgessner

Professional

What are the advantages and disadvantages of free trade?

Reducing tariffs on imports allows companies to expand to other countries. Without tariffs, imports from countries with a low cost of living cost less. It makes it difficult for U.S. companies in those same industries to compete, so they may reduce their workforce.

Sayuri Tronchoni

Professional

Why fair trade is bad?

Critics argue that Fairtrade, but not all other Fair Trade businesses, harm all non-Fairtrade farmers. Fairtrade claims that its farmers are paid higher prices and are given special advice on better techniques, both of which will lead to increased output being sold on the global market.

Lassina Zinna

Professional

What is a fair trade deal?

Legal Definition of fair-trade agreement
: an agreement between a producer and a seller that commodities bearing a trademark, label, or trade name belonging to the producer be sold at or above a specified price. Note: Most fair-trade agreements are illegal.

Chaya Vikhirev

Explainer

Which is an example of free trade?

A free trade area (FTA) is where there are no import tariffs or quotas on products from one country entering another. Examples of free trade areas include: EFTA: European Free Trade Association consists of Norway, Iceland, Switzerland and Liechtenstein. NAFTA: United States, Mexico and Canada (being renegotiated)

Jianfu Pechinkin

Explainer

What do you mean by free trade?

economics. Free trade, also called laissez-faire, a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports).

Minnie Mattie

Explainer

What are the benefits of free trade?

These benefits increase as overall trade—exports and imports—increases.
  • Free trade increases access to higher-quality, lower-priced goods.
  • Free trade means more growth.
  • Free trade improves efficiency and innovation.
  • Free trade drives competitiveness.
  • Free trade promotes fairness.

Feliza Kanza

Pundit

What are the disadvantages of fair trade?

Tariffs are a Disadvantage of Fair Trade
Tariffs or the tax put on exports and imports is another one of the disadvantages of fair trade. In most countries, the tariff for non-processed good remains lower than processed ones.

Egidia Orhan

Pundit

What is the opposite of fair trade?

Opposite of legal and equitable trade. exploitative trade. unfair trade. disparity.

Ghizlane Angenfort

Pundit

Is Fair Trade successful?

Fair Trade may not be an effective intervention but it does keep poverty in people's minds. It is an improvement on not caring at all. Many of the articles cited criticise Fair Trade but they do not provide an altruistic alternative.

Mikheil Beines

Pundit

Is Fair Trade good for the economy?

Economic benefits
Fairtrade improves access to agricultural services like organic training and premium markets. As a result farmers have an incentive to farm better and sell more.

Sigrun Mitras

Pundit

Is Starbucks really fair trade?

Starbucks has been working with Fairtrade globally since 2000. Beyond purchases on Fairtrade terms, Starbucks has funded more that $14 million in farmer loans to Fairtrade cooperatives as part of an ongoing commitment to helping farmers to manage risk and strengthen their businesses.

Alishia Toenjes

Teacher

Why is fair trade so important?

Fairtrade ensures fair prices, living wages and community benefits for farmers, workers and their families in developing countries. Education, health care and environmental sustainability all benefit from Fairtrade, and workers benefit from improved, humane working conditions.

Afra Farr

Teacher

Does fair trade really make a difference?

Fairtrade cannot solve all the problems of rural development. When people reach for a product with the FAIRTRADE mark, they are making a proven difference to the lives of the people who produce them. To have an even greater impact we need more of those customers – and more companies and donors – to back Fairtrade.

Tamba [email protected]

Teacher

Does fair trade mean no child labor?

Fairtrade standards prohibit child labor, but no person or product certification system can provide a 100% guarantee that a product is free of child labor. Fairtrade chooses to work in products (like cotton and cocoa) and countries with high risk of child labor because that is where children and youth need us most.

Serban Buforn

Teacher

How can free and fair trade be achieved?

Free and fair trade can be achieved by the following steps: 1) Liberalization of laws. 2) Enusuring that all the labour laws are strengthened in the country. 4) Collaboration with other developing countries to demand for fairer rules and regulations in WTO.

Roxy Macicior

Reviewer

How much do Fair Trade farmers get paid?

The amount can vary depending on the commodity. An analysis using information from TransFair shows that cocoa farmers get 3 cents of the $3.49 spent on a 3.5-ounce chocolate bar labeled "organic fair trade" sold at Target. Farmers receive 24 cents for a one-pound bag of fair trade sugar sold at Whole Foods for $3.79.

Sevdalina Penedo

Reviewer

Why are fair trade products popular with consumers?

Purchasing products that are fair trade certified can reduce poverty, encourage environmentally friendly production methods and safeguard humane working conditions. The fair trade label means an organization such as Fair Trade USA has certified that farmers and other producers adhere to fair trade standards.

Maragaret Ruiz De Larramendi

Reviewer

Is free trade possible?

No, it's not possible, not any more than absolute communism or absolute freedom or absolute democracy, for example. What is “global free trade”? It is such a state of the global markets, where artificial limitations to exchange of goods do not exist. Trade bans (illegality of certain goods/transactions).

Cristi Torronteras

Reviewer

How do you explain fair trade?

Fair trade is a way of buying and selling products that allows the farmers to be paid a fair price for their produce, and have better working conditions. Trade is 'unfair' when farmers receive very low income and have poor conditions while the companies that sell their products make lots of money from them.