Fair Trade vs Free Trade Essay Example

and treat its workers like slaves, while making sure there are plenty of McDonald’s restaurants and World Banks that do not go bankrupt (Weyer, 2005).

Free trade allows companies to utilize their resources with the opportunity to monopolize specific sections in the marketplace. Companies monopolizing can be dangerous because it can completely wipe out or reduce production in certain countries, as well as decrease competition and product quality. Recently, free trade agreements in Southeast Asia have led the prime minister of Indonesia to slow textile, food, and electronic production. The country is concerned that the local Indonesian industries will be swamped by Chinese goods” (Chowdhury).

For the consumer, this could be beneficial because goods would be available at much cheaper cost. However, there is no guarantee that once the competition in Indonesia is mitigated that prices will not rise. If this is a possibility in Indonesia then it is a possibility wherever free trade is extended to. The United States congress and the South Korean parliament have yet to approve legislation to remove industrial and non-industrial tariffs.

This legislation will let Korean manufactures have easier access to the United States market” (Ahn and Landsberg). Cohort 4 would like to see more production in the United States of America which free trade would not encourage. TransFair USA is one of the top third-party certifiers of Fair Trade products in the United States. The company has recently decided to change their company name to Fair Trade USA.

The modernized name and new brand identity is in high hopes to increase the awareness of Fair Trade among a broader consumer audience; therefore, increasing the sales of Fair Trade Certified TM products. This

will create more benefits for merchants, farmers, and workers around the world. Paul Rice, the president and CEO of Fair Trade USA, believes that every purchase matters. In addition, their company aims to drastically increase the positive impact of Fair Trade for hardworking farming families and consumers everywhere (Economics, 2010).

Fair Trade gives power to consumers to make choices with their dollars for “fair prices, better working conditions, environmental stewardship, and brighter futures” for the people who produce the high quality items that they buy every day (Economics, 2010). Fair Trade’s consumer recognition has tripled in the last five years, proving the company’s sustainability in a global market. As of today, this organization works with more than 800 companies to verify more than 6,000 products as Fair Trade. In 2009, Fair Trade Certified products generated $1. billion in retail sales, indicating their large-scale business practices. The month of October is themed “Every Purchase Matters” for Fair Trade USA.

This annual awareness campaign rings together a diverse range of corporate, nonprofit, producer and consumer partners with more than 100 events – including fund-raising parties, and promotions across the United States. These events raise understanding and knowledge of the Fair Trade movement with “social, economic, and environmental empowerment” for the farming population and consumers all across the globe (Economics, 2010).In Addition to Fair Trade USA, Cohort 4 believes that the general American population does not support free trade as well. “NBC news and Wall Street Journal did a poll and the results were interesting.

Sixty nine percent of Americans believe that free trade agreements with other countries have cost jobs in the United States. While eighteen percent believe that they

have created jobs” (Harwood). During the recession it is easy to see that many Americans are out of work. Since many products used in the U. S. re made in other countries, the poll results are not surprising.

Products that are made in other countries, such as China would create jobs for Americans if they were produced in the United States. “Fair trade associations are known as the most socially responsible groups in the market because they consider human rights, business relationships, and the environment” (Kunz & Garner, 2006). This is important because in many of the countries that would increase production based on free trade agreements, the working conditions are unacceptable.Often workers are exploited, as they need the money and the work is available. By buying products that come from other countries, U. S.

consumers are sometimes enabling exploitation. “Tariffs add as much as $80 billion dollars a year to retail cost” (Kunz & Garner, 2006). However, if more domestic production and purchases occurred then there would be more jobs for the local economy. The United States could begin to export more to other countries. More production in the United States would create a better balance instead of importing more than exporting. Another advantage of free trade is that it can create wealth, but wealth is not always evenly distributed” (Kunz & Garner, 2006).

“The United States has the largest gap between rich and poor of any industrialized nation” (Chowdhury). If free trade were to increase wealth in the United States, which does not guarantee that it would benefit the overall population. The goal is to do what is best for the majority if not everyone in

the United States. Increasing the gap between the rich and poor is not good for the country in terms of developmentally, health-wise, or economically.