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Fair Trade and developing countries - Research Paper Example

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Introduction A President of the United States once said that the business of America was business. With globalization and the liberalization of trade, however, this particular line became significant to almost every nation of the world. However, it is likewise a well-known fact that business in the first world countries follow a better structure and is more sophisticated as compared with those in the third world countries…
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Fair Trade and developing countries
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Download file to see previous pages It was likewise mentioned that the producers in the developing countries do not profit a lot from trade because they have to split profits and royalties with the governments. At times, they even have to pay those who are in charge of granting licenses thereby going through a number of red tapes within a the bureaucratic structure (Jaffee 2008). Fair trade is defined as that organized social movement which is regarded as a market-based approach aim towards helping producers from developing countries in ensuring the development of better trading conditions and also to ensure sustainability (Ferrer 2008). Basically, the movement is concerned with the need to pay higher prices to producers as well as the development of higher social and environmental standards. In the same manner, fair trade also highlights the export of goods from the developing countries to developed countries. Most of the said goods involve, but are not limited to the following: handicrafts, sugar, coffee, tea, bananas, cocoa, wine, cotton, honey, fresh fruits, flowers, chocolate and gold. The concept related to free trade generally surface as a response to environmental and social goals. Basically, fair trade was considered as a long term approach by which problems related to poverty can be addressed (Jaffee 2008). Thus, through fair trade, it has been argued that producers such as farmers in the developing countries are ensured of a better, sustainable future. In addition thereto, the establishment of the concept of fair trade was also brought about by the inability of free trade in the globalized market economy to cater to the needs of smaller industries thereby contributing to its slow demise. Parenthetically, the proponents of the idea of fair trade mentioned that there is indeed a need for the latter because of the failure of the liberalization of trade to protect small industries which at the same time, also contributes to the exploitation of its members (Ferrer 2008; Jaffee 200). Having established the main definition of the concept of free trade as well as the purpose behind the introduction of the said idea, this essay presents the common issues surrounding the topic. More or less, it aims to give an overview as to the history of fair trade, the purposes behind its establishment and its ability to actually help developing countries attain the sustainable development that it has envisioned (Lyon and Moberg 2011). The Need for Fair Trade The importance in establishing free trade has been premised on the inability of world trade to contribute to the betterment of all the members of the global market, most especially, the developing countries, more specifically the producers and industries therein. Evidently, meetings of the World Trade Organization, the primary international body tasked with the regulation of global trade, were able to show that free trade was relatively successful (Stiglitz and Charlton 2005; Ransom 2006; Nicholls and Opal 2005). Contrary to what the organization envisioned, it was shown that free trade tends to favor the developed nations. Unfortunately, there are even instances when the members of the developed world even come up with measures by which they block and delay important trade agreements. Consequently, because of this, there was a tendency for the members of the ...Download file to see next pagesRead More
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