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ESSAY: Fair trade or free trade?

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Introduction

ESSAY: Fair trade or free trade? In the Twenty first century, the globalisation is leading the world wide trade. After the Second World War, from the 50's to now, business, labour and trade increased. The richest countries and companies have improved their way of working, efficiency and productivity. The Taylorism with the vertical and horizontal division (blue collar and white collar), and Ford with the division of task are just a few examples for the idea of specialisation which led to a gain of productivity. The next step was the vision of empowerment which consists of giving employees increased autonomy and discretion to make decisions was known as the "Toyotism". Nowadays, the globalization is a consequence of a freer trade. First, I will present the process of globalization and its consequences on the development of the world trade. Afterwards, I will take a closer look at some countries to finally determine if free trade goes along with fair trade or if there is no way for both to coexist. The globalisation can be observed as a result of the main theories which have driven the free trade process. These theories have shown how important it was to get the trade freer. Some organisations were founded to help international trade development. So companies were able to grow and to become multinational companies, trading and investing all over the world. The main theory was the David Ricardo one's presenting the comparative advantages. How two different countries can trade and make them richer as well. David Ricardo explained that two countries which are producing two same products can became richer by using "specialisation and trade". The countries have to specialise their production in different good. The one on which they have a comparative advantage. Nevertheless, specialisation and trade was not sufficient. Free trade between countries was the premise for David Ricardo's theory to work. Unfortunately, protectionism impeded trade and the implantation of his theory. ...read more.

Middle

It is also surveyed by Organisation of which the aim is to be fair. However, does the fairness is really observe? After having looked at the process of globalization as a whole and how it works, the purpose is now to look across countries and observe if free trade is as efficient and as beneficial as it was demonstrated in the first part. As we discussed above, Ricardo spoke about the comparative advantage, explaining that free trade make it possible for both, rich and poor countries to grow. But in reality, by looking at real examples, we can see that the richer rather exploit the poorest countries. This situation is demonstrated in the article, (www.christian-aid.org.uk/indepth/9911fair/fairshar.html) which shows that international traders are making more and more profits and the local traders try to survive. As an example, in Peru, a small woman's enterprise development was supported by Infacam (Christian aids support).Woman's were selling textile clothes to support their families. But they saw their business collapse when Peru opened the local market to foreign exports. These enterprises lacked capital and information to export and besides this "Western markets were closed to them by the refusal of the industrialised countries to get rid of their tariff barriers on imports of manufactured textiles." This situation shows how unfair international trade can be. And that is the reason of protectionism; because of the unfair competition between developed and developing countries. The aim of protectionism from this point of view is to protect the infant industry, preserve the national security, the externalities (protection of natural environment). The previous example emphasizes the following paradox: if the GATT was successful in cutting tariff barriers, why are there still tariff barriers on textile imports in industrialized countries? That is the problem, there is three worst point noted after the GATT: 1. Tariff reductions were mainly on industrial manufactured goods 2. Agricultural products were largely ignored 3. ...read more.

Conclusion

The main theories which provided a free trade did also provided a fair trade. The result expected by David Ricardo is not the same in the reality. The richest want to profit more of the poorest. In a perfect competition market, the protectionism would be part of the past, but it is already in action because of the unfair competition. The poorest have to protect themselves against the big Multinationals companies. The world organisation which have developed the free trade have given more power to the richer and let the poorest falling in worst and worst conditions. The GATT had avoided tariffs in favour of the richest. The WTO is driven by the private sector, and capitalism. The MNC have developed the technology and innovation while in the same time they have provided worst and worst labour condition in poor countries. The technology can only be used by the rich population. Finally, the FDI are only given more power to the big companies inside foreign poor countries, while they are also laying off in developed countries. The previous observation gave the answer that free trade as it has grown is unfair. Because of the important power that richest have against the poor, the competition cannot be perfect, and the fairness will not be real. The solution will be to focus the globalisation on this point, "FAIR TRADE". A globalisation will have to become a world with only developed countries. The international trade have been promoted by the richest countries which have exporting the free trade. Since the richest will try to regulate the international trade, the fair trade will not rise. Being fairest means giving the tools to the poorest which will let them increase and grow. Is the solution is not to let the developing countries grow and export in the richest countries? The world has to take conscience of the situation. Big companies have to help smallest to grow instead of targeting more and more profit. Everybody is involved in this deal, from the final consumer to the world organisation by governments, MNC and organisation as well. ...read more.

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An excellent and well argued essay. The writer has clearly researched their case well and uses good examples. However, the conclusion is a little naive. The whole piece is well structured but suffers from not having been properly proof read. Spell check alone is not sufficient.

Marked by teacher Dennis Salter 04/10/2013

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