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Fair Trade And Free Trade
1. Fair Trade and Free Trade Which is Better at Eradicating Hunger? Kim Rogers Agronomy 342 Presentation
2. Free Trade Trade without government interference i.e., taxes, tariffs, subsidies, and quotas only regulation supply and demand Grew out of mercantilism in Europe in 1500s Adam Smith’s “invisible hand of the market” in 1776 Current examples are WTO and NAFTA Source: Moore 2004
3. Fair Trade Began with Mennonites in 1940s, became movement in 1960-1970s in Europe Remains small, around 1% of global trade Principles: trading partnership, based on dialogue, transparency, respect, greater equity in international trade, sustainable through better trade conditions, securing rights of marginalized producers, workers Depends on consumers paying more Sources: Moore 2004
4. Free Trade or Fair Trade?: The Ethics of Trade Ethics of Free trade Utilitarianism: By removing government interferences, laws of supply and demand reward all participants acting in self-interest. Ethics of Fair trade Justice: Restores equity to unfair global economic system
5. Which is Better for Eradicating Hunger in the Developing World? Pros of Fair Trade Ensures living wage paid to workers Protects environment of producers Support against market fluctuations Producer, Buyer enter long-term relationship
6. Which is Better for Eradicating Hunger in the Developing World? Cons of Fair Trade Small percentage of global economy Depends on benevolence of consumers Highly fragmented Conflict of operating both in and outside of market Can it work on economies of scale
7. Which is Better for Eradicating Hunger in the Developing World? Pros of Free Trade Can deal in economies of scale As dominate global order all can access it Lack of regulation prevents government corruption Sustainable as based on natural economic order
8. Which is Better for Eradicating Hunger in the Developing World? Cons of Free Trade Hypocrisy of free trade—forced on developing countries, West doesn’t use it Global economy race to bottom environmentally and economically unsustainable No cushion against market fluctuations
9. So, is free trade or fair trade better for eradicating hunger in the developing world? Fair Trade offers an economic alternative to protectionism and neoliberalism Focus on cooperative trading relations, worker rights, sustainability Fair Trade orgs need to unify Source: Jaffe 2004
10. Works Cited Text Sources Jaffee, Daniel. 2004. “Bringing the ‘Moral Charge’ Home: Fair Trade within the North and Within the South. Rural Sociology 69 (2): 169-196. Moore, Geoff. 2004. “The Fair Trade Movement: Parameters, Issues, and Future Research.” Journal of Business Ethics 53: 73-86. Images Slide 1: Image available at http://www.kobos.com. Retrieved June 29, 2009. Slide 5: Image available at http://lh6.ggpht.com/_D_tJ3jZ00WI/SIjJ3XTY49I/AAAAA AAAANk/AwKKCxfM1po/World+Food+Summit+Free+trade+%3D+hunger.jpg. Retrieved July 6, 2009. Slide 7: Image available http://upload.wikimedia.org/wikipedia/en/thumb/6/61/ EffectOfTariff.png/450px-EffectOfTariff.png. Retrieved on July 10, 2009. Slide 9. Image available at http://images.google.com/imgres?imgurl.www.pcusa.org/hunger/images/cameroon-women.jpg. Retrieved on July 10, 2009.
Hinweis der Redaktion
Definition and history of free market trade
Definition and history of fair trade. Current movement shaped in Europe 1960s / no single national or international body / definitions.
Ethics– Free: utilitarianism (does most good for most people as everyone can participate, market is rational. Fair: Justice – balance in justices from colonial system; protect human rights (rights based too—protect workers and environment, raise consumer awareness of injustice
Pros of fair trade– relate each subtopic back to food security. Environment (sustainable food grow); market fluctuations– less crisis food insecurity; same w/ long-term, also education/voice of producer as partner,
Limits of fair trade. Small %: 1% of economy; Benevelonce stand up in hard times? ; no single organizing body like wto, differing standards
Econs of scale—has room to grow that fair trade may not; Dominate– if. Relate to hunger issues. Can grow bigger economies, feed more people, improve prosperity as a whole (rising tide lifts all boats– sustainable as self-regulating
Western nations don’t practice free trade– through IMF, WB imposed free trade principles yet keep our subsidies– This leads to imbalance which leads to mobile capital leads to hunger
As alternative to economy, middle ground where developing countries may have more control over their economies, thus reduce hunger (potentially). Cooperative – more power to developing country producer, sustainable, improve health, food secure, more education even. Yet, work needs to be done to insure that fair trade grows and remains economically viable—unify standars, wield more global power.
