Fair trade has more benefits for suppliers than free trade. To what Essay

Fair trade has more benefits for suppliers than free trade. To what extent do you agree with this statement - Essay Example The supporters of fair trade are of the opinion that the various problems related to the imbalances in the society and the environmental problems arise as a result of free market trade. This essay tries to analyse the phenomenon of fair trade from the point of view of the suppliers. The various economic theories have been explored in this context. Before proceeding with any elaboration of the various nuances of fair trade, it is essential o define the various aspects of fair trade. Fair trade is a movement which is aimed at promoting the labour standards as well as the environmental standards. It also includes setting a definite standard for the policy objectives which are aimed at the improvement of the societal welfare. Fair Trade is to be distinguished from free trade since free trade is that which depends on the market forces of demand and supply solely and would mean the removal of the different types of qualitative and quantitative barriers like tariffs and quotas. On the other hand Fair Trade would involve the promotion of the trade in the developing economies or the sectors which otherwise may not be able to compete with the international competitors. Exports being the focus of it from developing to developed countries. FINE proposed the most crafted definition of free trade in the year 2001. The fair Trade labelled p roducts must be in line with the standards practised by the Fair Trade Organizations. The FLO or the Fair Trade labelling Organizations International is the responsible authority for regulating the certification standards as well as labelling of the products and stipulate the minimum criteria for each product to be labelled and sold as fair Trade (Mohan, 2010, pp. 17-24). A number of criteria are present that distinguish the fair trade products from that of the other products in the market. First of all the producers are paid a minimum price by the traders. This ensures