Fair Trade And Free of charge Trade:

Introduction:

PTA- referred to as preferential trading agreement, in this type of integration countries impose low tariffs on goods imported from member countries than the rest of the world.

FTA- referred to as free of charge trade region, this is a zero tariff integration whereby member countries impose zero tariffs on goods imported from member countries, and nonetheless there exist transshipment rules that prevent imports becoming channeled via low tariff countries.

CU – referred to as widespread union, it is comparable to an FTA but with a widespread external tariffs by member countries.

UTL- unitary trade liberation, this is a non discriminatory reduction in trade barriers where goods imported are imposed zero tariffs

CM-typical marketplace, in this integration there exist a no cost movement of elements of production e.g. Capital and labor.

Fair trade:

Fair trade is an organized social movement which promotes standards for international labor, environmentalism, and social policy in areas related to production of Fair trade labeled and unlabelled goods. The movement focuses in specific on exports from developing countries to developed countries.

PRINCIPLES OF FAIR TRADE:

Fair trade is based on the following principles

Payment of a fair cost:

This principle depicts that the costs for commodities for the goods imported from creating countries really should be by way of dialogue, this means that the price offered to these countries should cover the production expenses and also need to be socially just and environmentally sound.

Opportunity creation:

This principle is based on the efforts to develop much more opportunities for these disadvantaged countries this is due to the fact fair trade is aimed at alleviating poverty and achieving sustainable development in the creating countries.

Environmental protection:

Fair trade encourages environmental protection whereby it advocates for better approaches of production that do not degrade the environment.

Improving working conditions:

It advocates for far better working conditions for the producer countries where working conditions ought to be safe and healthy to the producers.

Gender equality:

It ensures that ladies are properly valued and rewarded for that reason it empowers females in their productive function and ensures that they adequately rewarded.

Fair trade in the US, Europe, other countries:

Fair trade was initiated in the north markets in the 1940′s by religious groups and non governmental organizations, the most widespread fair trade organizations include the fair trade labeling organization (FLO) which was formed in 1997, this is the largest fair trade labeling body that inspects producers in much more than 50 countries in Asia, Latin America and Africa.

Fair trade as a result delivers the developing countries the opportunity to experience economic development which results to poverty alleviation, promotes gender equality, campaigns for a greater environment and also for better working conditions, the distinction between fair trade and free of charge trade is that totally free trade only involves the elimination of tariffs and quotas while fair trade has a lot more than the elimination of tariffs.

Conclusion:

Free trade means the elimination of all tariffs and quotas on imports, in history countries have negotiated with other countries to promote trade through the formation of organizations that offer zero tariffs to member countries, according to David Ricardo and Adam smith who advocated for free trade, trade will result to gains in both countries that physical exercise no cost trade even with out the no cost movement of elements of production, Fair trade on the other hand is an organized social movement which promotes standards for international labor.

Fair trade provides creating countries the opportunity to develop economically and also to boost the social welfare of producers, its aim is to alleviate poverty and also to help the creating countries to have economic sustainability, free trade does not offer the benefits associated with fair trade.

Reference:

Wikipedia the free encyclopedia (2007) trade and trade organizations, retrieved on 22nd April

The no cost trade and globalization (2007) retrieved on 22nd April

The NAFTA (2007) Canada and North America agreement, retrieved on 22nd April

Robert Heller (1973) International Trade: Theory and Empirical Evidence, Prentice-Hall publishers, US

Joseph E (2005) Fair Trade for All: How Trade Can Promote Development, Oxford University Press, Oxford

 

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