Free trade

The unrestricted purchase and sale of

goods and services between countries
without the imposition of constraints such
as tariffs, duties and quotas (non-tariff
barriers). Free trade is a win-win
proposition because it enables nations to
focus on their core competitive
advantage(s), thereby maximizing
economic output and fostering income
growth for their citizens.
Features of free trade
-Trade of goods without taxes, other trade barriers (e.g.
quotas on imports), or trade distorting policies like
subsidies that give some firms, households or factors of
production an advantage over others.
-Free access to market
-Free access to information
-Free movement of labor between and within countries
-Free movement of capital between and within countries.

Fair trade
A movement which strives for fair
treatment for farmers. In a fair trade
agreement, farmers, who in other
situations might be more susceptible to
the will of the purchaser, will negotiate
with the purchasers in order to receive a
fair price for their products. Farmers who
engage in fair trade also aim to pay their
workers a fair price, and engage in
environmentally-friendly practices.

Features of fair trade
-Creating opportunities for economically disadvantaged producers
-Transparency and accountability
-Developing producers independence
-Fair pay to the producers, equal pay for, equal work by men and women
-Fair traders ensures prompt payment to their partners
-Gender equity: womens work is properly valued and rewarded
-Working conditions: safe and healthy working environment for producers,
labor. The participation of children (if any) does not affect adversely their well-
being, security, educational requirements and need for conforms to the UN
Convention of the Right of the child as well as the laws and norms in the local
context
-Environment must be protected


Similarity?

Both seek to help farmers and other
producers get access to the global market
and to improve wages for producers.
Differences?

Say youre looking to buy a cup of
coffee, which should you buy
free or fair?
(Pros and cons of each?)

Free trade means that the producer (farmers, small business
owners, manufacturers, etc.) who harvested the coffee beans
sold them without the interference of the government's tax or
monetary gifts - tariffs, subsidies, price controls or pork-barrel
politics. Sounds pretty good, right? For some, it is. Free trade
proponents believe that leveling the playing field among
producers from all nations is the best way of matching global
supply to demand while making all people involved more
prosperous.

Though by some accounts, free trade leaves producers in
developing countries at a disadvantage. In those countries,
producers lack social security and other safety nets that would
help them hold out on selling their wares during times when
prices are low. While producers in more prosperous nations
can wait to sell at times like these, their counterparts in
developing nations must sell immediately. As a result, they lose
a lot of money.
Fair trade means you believe there are some rules in trade that
must be placed in order to provide for producers who have
disadvantages in a free market. If you buy a fair trade cup of
coffee, it means that the farmer who harvested the beans in a
developing nation had some help getting his specific product to
you. Fair trade aims to help producers in developing countries
obtain better trading conditions and gives an extra boost to those
producers who promote sustainability (that is, eco-friendly
agriculture). Rather than leaving environmental standards and
wages up to the market, fair trade actively pushes for higher price
for producers as well as social and environmental standards.

Opponents of fair trade say that any solution that favors one group
over another harms growth overall. Producers in developed
countries, for instance, resent having to compete with what they
call cheaper, lower-quality imports. The agreement, they say, is
unfair because developing nations often sell more of their product
but end up buying less from other countries.