DB UNIT TWO ASSIGNMENT 2
Running Head: DB UNIT TWO ASSIGNMENT 2
DB Unit Two Assignment
Student’s Name
Institutional Affiliation
Globalization has a significant impact on the commercial activity of governments worldwide and how they impose their jurisdiction on matters of trade. International supply chains have become extensive, and the laws in which the items are bought and sold has consistently transitioned. Production of products is also distinct from the usage. These changes have led to the regulation of business activities primarily through fair trade and free trade. Fair trade advocates for the rights of the workers, conducive working environments, and pursuit to remove the pay differences between trading nations (Gillikin, 2017). On the other hand, Free trade projects towards reducing the policies and barriers that favor specific countries or companies (Gillikin, 2017). This paper seeks to provide more in-depth insights into the aspects of free trade and fair trade.
Free or Fair Trade?
In due course, all managements look forward to achieving fairness in their trade; to solve the many challenges facing the trade market through either fair trade or free trade that matches their requirements. From the aspects of the two types of trade; the approaches in both depict that fair trade is better than free trade. The marketing measures of products produced under fair trade and free trade are extensively different.
Fairtrade mainly focuses on providing education to the user about producing products without exploiting the environment or the workers (Drezner, 2006). On the contrary, the main aim of free trade is to generate more profits, attract more users, and enhance their turnover sales. Therefore, fair trade flourishes on the degree of demand created by the users for such goods. Every so often, goods in fair trade may not be branded because several governments have not made it a mandate (Drezner, 2006). On the other hand, free trade goods are most labeled as being sustainably cultivated or recycled, but it does not infer that the goods were produced through appropriate methods. Fairtrade makes the production of goods beneficial for both the company and the surrounding society.
Is It Proper to Discuss Free Versus Fair Trade Considering the Concept of Comparative Advantage?
Comparative advantage is one of the primary principles of economics, and it focuses on the producer of goods using the least opportunity (Vernon, 2017). This is possible when the manufacturer has sufficient resources or an abundant supply chain. It is the rule that faces out the concept that one aspect is the most important. In this sense, it can be projected that it is not proper to discuss free trade versus fair trade, given the concept of comparative advantage. Both free trade and fair trade have their merits and demerits, and it is, therefore, appropriate that a country would choose the type of trade that is most efficient to them. Most states would apply both free and fair trade to ensure that they are successful in international trade.
Responses to Other Students
I checked some of my peers’ work and learned that that the free trade versus fair trade argument should be stopped as it is not viable as from the comparative advantage economists view. It is essential that international trade should be both free and fair; to accomplish economic effectiveness and allow development through multinational associations. The additional questions that I incurred after reading the posting are that how fair is free trade and is free trade easy? I would also like to solicit for clarification on whether the rules of free trade are beneficial. The similarities between my posting and that of my classmates are that we all agree that fair trade is better than free trade. Also, it is not appropriate to compare free versus fair trade, given the concept of comparative advantage.
References
Drezner, D. W., (2006). U.S. trade strategy free versus fair. Council on Foreign Relations.
Retrieved from www.cfr.org/content/publications/attachments/CPCTrade.pdf
Gillikin, J., (2017). Free trade vs. fair trade. Houston Chronicle. Retrieved from
http://smallbusiness.chron.com/trade-vs-fair-trade-1683.html
Vernon, R., (2017). An international investment and international trade in the product cycle. (pp. 99-116). Routledge.