What is the difference between "fair trade" and "free trade?"

Discussion in 'Politics, Religion, Social Issues' started by kavika411, Oct 14, 2007.

  1. kavika411 macrumors 6502a

    kavika411

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  2. xUKHCx Administrator emeritus

    xUKHCx

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    #2
    Very brief

    Fair trade - Makers of the goods (coffee classic example) get more of the profit of the sale of the goods rather than the pittance they usally get.

    Free Trade - this is a market condition where the sale/trade of goods is not hindered by (inter)governmental/world trade regulations taxes quotas etc.
     
  3. Naimfan macrumors 68040

    Naimfan

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    #3
    Very good!
     
  4. it5five macrumors 65816

    it5five

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    #4
    You're just going to get biased responses here.

    Free trade:

    Free trade is a market model in which trade in goods and services between or within countries flow unhindered by government-imposed restrictions. Restrictions to trade include taxes and other legislation, such as tariff and non-tariff trade barriers.

    http://en.wikipedia.org/wiki/Free_trade

    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 Fairtrade labeled and unlabeled goods. The movement focuses in particular on exports from developing countries to developed countries.

    http://en.wikipedia.org/wiki/Fair_trade

    Good starting point.
     
  5. .Andy macrumors 68030

    .Andy

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    #5
    [swarmie]
    Free Trade - Awesome, kickass, products get produced by the most efficient and more cheaply. No govt intervention. The market will sort itself out.

    Fair Trade - Pinky, commy.
    [/swarmie]

    ;)
     
  6. xUKHCx Administrator emeritus

    xUKHCx

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    #6
    Very brief

    To follow up apart from in theory there is no such thing as free trade. The imbalances in the world economy (poorest 10% of population only trading 0.5% of world trade, third world debt etc.) do not allow a level playing field. Fair trade was conceived, among other points, to act as a counter and provide a method to try and give back the level field.
     
  7. Iscariot macrumors 68030

    Iscariot

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    #7
    Free trade means you trade me all of your things, for free.

    Fair trade means you trade me all of your things, and tell me it's "fair" while referring to me as "sir".
     
  8. Ugg macrumors 68000

    Ugg

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    #8
    Your expansion of the definition is right on.

    Free trade is one of those fictions invented by western corporations so they can undercut third world producers. The reason they can is due to market monopolization and heavy government subsidization.

    To be fair, the definition of free trade continues to evolve. It wasn't that long ago that the UK and the US had some of the biggest tariffs and import restrictions.

    Fair trade aims to cut out the middleman, usually a multinational corporation, therefore increasing the money the actual producer receives. Fair trade in the US is most closely associated with coffee.

    Fair trade mostly means that the producers are in evolving economies and the consumers are in established economies.

    However, a new twist has been added to the Fair Trade equation. A housing estate in Southampton, England (I can't remember exactly) has started importing Fair Trade tea and selling it for a fair price within the estate. The price is less than the mass produced tea. Not only does it benefit the producers of the tea but also the poor people on the housing estate.

    The practice has grown to the point that Fair Trade no longer means that the product is more expensive than mass produced stuff.
     
  9. Daveman Deluxe macrumors 68000

    Daveman Deluxe

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    #9
    Ugg: Right on. I find that the fair trade whole-bean coffee at my local grocery co-op is cheaper than the whole-bean coffee that I could buy at Safeway.
     

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