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Free Trade vs Fair Trade

In: Social Issues

Submitted By jcarrym
Words 2709
Pages 11
With globalization creating a world economy, and world trade growing substantially, we are all uniquely interconnected. International trade, and policies surrounding it are a key discussion point for politicians and citizens of nations worldwide, with poverty and development often mentioned when discussing these subjects. As the World Bank puts it, “Trade is a key means to fight poverty and achieve the Millennium Development Goals. It allows countries to import ideas and technologies, realize comparative advantage and economy of scale, and foster competition and innovation to increase productivity and achieve higher sustainable employment and economic growth.” (World Bank, 2013)
Many economists have attributed much of the global economic growth down to free trade agreements, with the relaxing of tariffs, duties and quotas seen worldwide. Despite the widespread adoption of free trade agreements, fair trade is still relatively minimal. Some proponents of fair trade have compared it to the Code of Hammurabi, the earliest known legal code which claims the law is to ‘promote the welfare of the people and to cause justice to prevail in the land, to destroy the wicked and the evil that the strong might not oppress the weak’ with the opinion that fair trade can be used to prevent incredibly rich people and organisations from using trading relationships in the oppression of the vulnerable and weak and impoverished which is what occurs in free trade. (Northcott, 2006) Influenced by theorists such as Foucault and Gramsci, free trade is seen as an ideological instrument to employ ‘hegemonic’ dominance over the world, representing a vital component of the power/knowledge regime intended to sustain the current world order. (Fridell, 2007)
According to Charles Elad (2013, pp. 1129), fair trade is an “alternative model of trade that seeks greater equity for small-scale producers…...

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