Why is fair trade not fair for farmers and poor countries
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Answer:
Explanation:Globalization—the tendency of companies to treat the world as one giant kingdom of potential profit, without all those pesky borders—is largely to blame. If a company can sew its jeans in Honduras for a fraction the price it can do it in Chicago, the decision to outsource is a no-brainer. And if competitors have already packed their factory bags and cut their costs, and you hold out for "Made in the USA" and higher prices, guess where your business might be heading?
Free trade is a part of globalization and it sounds great in theory: if we removed all barriers to trade, such as import tariffs (the taxes companies have to pay to get their goods into another country and sell them there), all countries could compete on a level playing field—and what could be fairer than that? In practice, it doesn't work out quite like that. Some countries are inevitably far more powerful than others and they want things to stay that way. Even while promoting "free trade", they use all kinds of tactics to ensure they can trade more freely than other people.
You might have heard of a practice called dumping? That's where an industrialized country subsidizes production of finished goods, which it then exports to a developing country at a price that's lower than the goods the developing country can produce at home. The developing country has to cut the prices of its own goods to a level that makes it impossible for poorer people to support themselves. Another tactic is for rich countries to impose high tariffs on finished goods but low tariffs on basic, raw materials. That gives poorer countries no option but to export raw materials: they can't turn those materials into high-value finished goods themselves because they won't be able to export them. The rich countries import the low-value, raw materials, make them into high-value finished goods wherever it suits them, then export the finished goods back to the poor countries. Practices like this mean "free trade" is all too often a synonym for "unfair trade". (You can read more about the rigged rules of free trade on Oxfam's Trade campaign website.)
According to advocates of globalization, free trade has brought greater wealth to people in poorer nations, giving them a foothold on the ladder of progress and prosperity. On that view, wealth gradually "trickles down" society from the richest to the poorest, making everyone's lives better in the long run. The trouble is that very often it doesn't. Big corporations haven't outsourced their operations to low-wage economies in developing countries through any desire to alleviate poverty; they've done it to keep prices down and compete in a marketplace where everyone else is outsourcing too. Now there are many good examples of companies working respectfully with partners in developing countries, providing fair prices that help communities gain access to such vital things as education and basic healthcare. But there are many more corporations supporting a shadowy world of sweatshops, where working conditions are appalling and wages are too little to meet even basic daily needs, never mind climb out of poverty. Unchecked, globalization swiftly becomes a "race to the bottom." If "trickle-down" theory works, why are so many of the world's people still in poverty?
It would be a fair assumption to make that a country with a large amount of natural resources would be more likely to develop fastest and furthest. This could be assumed because natural resources in a country would be likely to stimulate trade at first within that country, and later to outside countries.