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Fair trade and its implications for developing and developed countries.

Trade

G1obalization and free trade. Pros and cons.

 

Globalization is the tendency for the world economy to work as one unit. Itís led by large international corporations operating all over the world. As any process globalization has advantages and disadvantages.

On the one hand it increase competition among producers and others consumers have a big range of products and services. Globalization rises peoples living standards. Also expansion of production provides the new jobs for people.

On the other hand globalization can damage local industries, if they are not competitive enough. If the companies want to survive in the period of globalization they need to take part in the competition. Also globalization can creates some cross-cultural problems or even ruins national customs.

Free trade is a situation in which goods come into and out of a country without any controls or taxes. Free trade is beneficial to countries. Countries, which open their markets, usually have a policy of deregulation. They free their markets without governmentís control. Customers in free trade areas are offered a wider range of high-quality products at lower prices.

But the negative aspect of free trade is that a lot of foreign competitors can destroy local industries.

How can countries regulate their imports and exports. Protectionism.

Many countries try to protect their industries from foreign competitors and do not allow free markets. Also countries control and regulate their imports and exports. It is a policy of protectionism.

Some nations compete unfairly. For example dumping. It is common in international trade. Nations sell goods at very low prices, less than it costs the company to produce the goods. Companies are heavily subsidized by their governments. Infant industries need to be protected until they are strong enough to compete in the world markets.

There are two main barriers of free trade: tariffs and subsidies. Tariffs are taxes on imported goods, so that the imports cannot compete so well against domestic products. Subsidies are money paid to domestic producers so that they can sell their goods more cheaply than foreign competitors.

Less important barriers are quotas, licences and documents. Quotas limit the quantity of a product, which can be imported. Expensive licences for importers add greatly to costs.

All these tools help to r In conclusion Iíd like to say that the choice of policy will depend on the level of social and economic development of the country. Developing countries prefer to protect infant and strategic industries. The developed and successful ones choose free trade and open markets. egulate imports and exports of different countries.

Fair trade and its implications for developing and developed countries.

Fair trade is a trading partnership, based on interaction of openness and respect. Fair trade seeks to achieve equality in international trade.



Fair trade exists for the development of business, offers better conditions of trade, ensure the safety of the rights of private producers and their employees.

Fair trade organizations consider that the main principle of their business is trade justice.

The main principles of fair trade are: creating opportunities for producers, financial transparency and responsibility, fair price, payment, working conditions and so on.

In conclusion, fair trade is more just a trade. This is evidence that a fair approach in the world trade is possible.

Fair trade shows that charity is not needed to lift people out of poverty and that social and environmental standards can be put into trade. It may not be the answer to developing countries, which need fairer rules, not ways of circumventing unfair ones, but for the moment it is the only option for western consumers who want to add some human rights to a manifestly unjust global trading system.

 


Date: 2015-12-17; view: 1649


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