Free Trade vs Fair Trade

[dragonsscout]

Which do you think is the right way to go?

I was inspired to ask this after reading the consumerism thread. I'm a free trade advocate, with some reservations.

[notoppings]

I would like to see free trade but the agreements we have now don't work so I voted for fair trade. If we could work out all the imbalance associated with free trade then I would be for it.

[Lights]

Have people never heard the saying, "too much of a good thing"?

Free and fair are great ideals, but you go too far either way and it falls apart.

[Krazy P]

Which do you think is the right way to go?

I was inspired to ask this after reading the consumerism thread. I'm a free trade advocate, with some reservations.

dragon - you really need to read some economics. Seriously. And perhaps a little history.

Or let me pose a question to you - Define fair trade.

[TheLastMohican]

Which do you think is the right way to go?


I support free trade, but in my understanding fair trade can be fine as well, since it is not necessarily government regulated. Free trade and fair trade are not exactly opposites to be chosen between.

[CaptainA]

This is not up for question in my opinion. Fair trade gets at least a part of the profits to the actual producers and a lot less to the middle men. This does not mean I am against free trade, in fact in an ideal world all trade would be free.
Unfortunately fair trade to most of us only relates to coffee. But there are so many products if you do the research. But even in the case of coffee beware of the "Starbucks" version of fair trade, which actually only includes a very small percentage of their products, but they would have you believe it is all their products. And in any case it is not really "Fair" by the standards of most fair trade dealers.


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[dragonsscout]

dragon - you really need to read some economics. Seriously. And perhaps a little history.

Or let me pose a question to you - Define fair trade.

In what way? I realize that it's not as simple as free vs fair, but please elaborate.

For the purposes of this, let's just use Wikipedia's definition (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) of fair trade.

Fair trade is an organized social movement and market-based approach to empowering developing country producers and promoting sustainability. The movement advocates the payment of a fair price as well as social and environmental standards in areas related to the production of a wide variety of goods.

They're often depicted as opposed, even though they aren't exactly opposites. I'm just trying to get a general feel for this here. There was no thread that I could find that was primarily about international trade.

[SoupNazi]

Fair trade gets at least a part of the profits to the actual producers and a lot less to the middle men.

But a free trade system allocates profits (to middlemen or otherwise) according to Supply and Demand, just like anything else. The ability of certain sectors and/or positions in the value chain to earn above/below normal profits is exactly the mechanism through which economic signals are sent, leading to efficient resource allocation and a bigger/more delicious economic pie…

And for those about to point out that this obviously doesn't work perfectly since supernormal/subnormal profits persist (which they would not if resources were properly re-allocated), keep in mind that we don’t actually have *free* trade. If we did have true free trade, it would apply to all sectors, and producers receiving low profits in one industry would have more opportunities to move into other industries, thus reducing the supply of what they produce and increasing the price that the remaining producers receive. Remember that true free trade applies pressure to the prices of inputs of tradable goods (including labour) to equalize. Perfect free trade (which can never exist due to frictions such as transport costs and the existence of non-tradable goods) would, in a hypothetical perfect free trade world, lead to perfect factor price equalization.

In the context of a world without true free trade, do I support ‘fair’ trade? Well, there’s nothing ‘un-free’ about the provided Wikipedia definition:

“Fair trade is an organized social movement and market-based approach to empowering developing country producers and promoting sustainability”

– it actually says it’s a market based approach, so it's not un-free. Socially conscious goods can be traded just like anything else, provided there aren’t government regulations enforcing it. Fair trade by this definition is therefore no more or less likely to be free.

Anyway, to answer the question.. if I could snap my fingers and make trade either free or fair.. of course I’d choose free. It would bring far greater benefits AND equality to our world.

[ArchonAlarion]

free trade is fair trade

OH WAIT you mean semi violent interactions that are labled "fair" to stir up certain images in the minds of the masses.

OHHHHH

[dragonsscout]

free trade is fair trade

OH WAIT you mean semi violent interactions that are labled "fair" to stir up certain images in the minds of the masses.

OHHHHH

Hahaha! Yes, you know, Starbucks stuff.

[TigerDak]

Which do you think is the right way to go?

I was inspired to ask this after reading the consumerism thread. I'm a free trade advocate, with some reservations.

The right way to go is to let people determine the way they want to go. Free trade involves a buyer and a seller, two person who agree and settle on a price. That's free trade. Fair trade, as I've heard, involves a buyer and seller, too.

But some people are not interested in the feel-good social approach that "fair" trade is supposed to create. It doesn't need to be one or the other, and the two are not necessarily diametrically opposed to one another. The right way to go is to let people determine the way they want to go.

[searcher]

You do realise that America has basicly ensured that New Zealand will end up suffering Helen Clark for another term because of the possibility that we may be getting a free trade agreement with America. :irked:

[Ytterbium]

Free trade can never exist it's just a theory. So I'll go for fair trade.

[SoupNazi]

Free trade can never exist it's just a theory. So I'll go for fair trade.

Fair trade can never exist, it's also just a theory

[Ytterbium]

Fair trade can never exist, it's also just a theoryOfcourse it is. Which one is the easiest to accomplish? Make thing things fair or free? There will always be local regulations and standards against free trade. Fair trade however is more gently and softer to the skin. It can be accomplished (but never fully) with regulations and standards.

[Henry]

Which do you think is the right way to go?

I was inspired to ask this after reading the consumerism thread. I'm a free trade advocate, with some reservations.

If you took government subsidies and foreign currency manipulations out of the picture, free trade would be fair trade - people would be paid based on their productivity and market demand.

[dragonsscout]

If you took government subsidies and foreign currency manipulations out of the picture, free trade would be fair trade - people would be paid based on their productivity and market demand.

Doesn't fair trade stipulate environmentalism and 'fair wages' (normally higher than normal market price) for producers of products? It effectively sets a binding price floor, which causes unemployment and drives down wages for any non fair trade producers. It's similar to a union, but instead, the drive is from the consumers instead of the producers.

[Henry]

Doesn't fair trade stipulate environmentalism and 'fair wages' (normally higher than normal market price) for producers of products? It effectively sets a binding price floor, which causes unemployment and drives down wages for any non fair trade producers. It's similar to a union, but instead, the drive is from the consumers instead of the producers.

Yes I have heard a lot of different "fair trade" schemes. But really I think the only "fair" way to have any sort of economic exchange is to pay people for production, placing a small percentage tax on everything produced to take care of those who genuinely are unable to work.

[Doppelbock]

What do you mean by "fair" trade? "Fair" is a value judgment. Hence it is subject to interpretation. What is fair to me might not be fair to you.

But in general.. what could be more "fair" than free trade?

[dragonsscout]

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Fair trade is a term used to describe a movement, kind of like Pro-life and Pro-choice.

[Henry]

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Fair trad is a term used to describe a movement, kind of like Pro-life and Pro-choice.

I think everyone gets that, just that no one really cares because its mostly the emo NF types that push that garbage.

Paid for production, nothing else really strikes me as "fair".

[Luthor Rex]

You do realise that America has basicly ensured that New Zealand will end up suffering Helen Clark for another term because of the possibility that we may be getting a free trade agreement with America. :irked:


What's this "New Zealand" you speak of? Are you trying to say there are other countries than America?

[Sir Paul]

Fair Trade.

I want to know that the people growing my favorite coffee will keep doing so.

[Chrysalis]

Ooops I voted fair trade instead of free trade.

Free trade is the option to choose. Who would define fair anyway?

[PortInStorm]

Hey searcher, I feel your pain. Canada has stumbled huge in NAFTA. Our oilsands production is mainly owned by Americans and as such we cannot even regulate the environmental damage done to the area by their companies- we can regulate our national ones, but not the international. As such, sickeningly copious amounts of fresh water are being WASTED (honestly, it makes me feel sick just thinking about it) and our hands are tied. We can't even charge Americans more for our oil in an attempt to slow down production and limit the damage in that way- we'd have to increase our Canadian prices as well.

In addition, water will soon be on the table, and if we don't do something fast and soon, Canadians will lose control of that resource as well. If that happens, the environmental damage will be unprecendented- we're having enough of a hard time getting the bottled water companies from destroying our underground aquifers and draining the great Lakes (stop supporting Coke and Pepsi who own these companies). What people don't realize is that Canada only has 5% of the world's total fresh [/U]useable[/U][/B] water (that is, in the region where people need it, and replaceable).

Free trade has wrenched control of Canada's environment and resources out of its people's hands. And we were stupid enough to do it (Mexico was smarter). NO MORE. Please vote Obama, he wants to renegotiate.