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The Debate: Free Trade vs. Fair Trade

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 * Discuss many aspects of both free trade and fair trade
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__Free Trade vs. Fair Trade__ Essay

In the world market today, there are two types of trade that are fiercely debated over. Fair trade and free trade are both methods that benefit certain sides, but both come at a price to the people who make a living by either one of these two. Free trade is, simply, trade that is conducted without interference from the government. Fair trade is known as a social movement that strives to provide producers in less fortunate countries a way to obtain better standards of trade and living. Between these two, there is much to consider before deciding which is most favorable.

Free trade allows the trade of goods and services without government interference. This, ultimately, means that trade barriers such as taxes are removed from the system. Another point of free trade is that market prices are directly influenced by the supply and demand of that product. This leads to competition between companies to produce a high quality product while still maintaining a reasonable price.

Since fair trade aims to assist the producers of the goods, everyone along the line of production receives a fairly equal share in the profits. This method also sets up a stable price for product because everyone has a fair payment amount. Also, fair trade encourages farmers to protect the environment by following the set of regulations that deal with farming in a manner that will not permanently damage the environment.

Both free and fair trade have their benefits to a certain extent. One negative of free trade is that only the ones with high economic status will benefit from this method. Fair trade would ensure that everyone along the line got an equal share in the profits. A negative of fair trade would be that the price of a product is sensitive to oversupply and in the event that this occurs, the price will drop. The price of free trade products may depend on supply and demand, but when competition is factored in this becomes more of a benefit of free trade.

As you can see, free and fair trade have their issues and benefits. With free trade, you eliminate taxes, but at the price of losing certain jobs. Fair trade helps the producers, but market prices are subject to change in the event of oversupply. In the end, both methods of trade offer different outcomes that may or may not assist the overall economy of a country.

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