John Doe, Mtnr. 12345

Free Trade Versus Fair Trade

Proponents of fair trade argue that exchanges between developed nations and lesser developed countries (LDCs) occur along uneven terms, and should be made more equitable. The Fair Trade Federation’s Annual Report describes the fair trade movement as "a global network of producers, traders, marketers, advocates and consumers focused on building equitable trading relationships between consumers and the world's most economically disadvantaged artisans and farmers."

Fair trade organizations, such as the Fair Trade Federation and the International Federation for Alternative Trade maintain that fair trade practices alleviate poverty, enhance gender equity, improve working conditions, the environment, and distributive justice.

By contrast, free trade proponents believe that under a system of voluntary exchange, the demands of justice are met. Although free traders hope to alleviate poverty and improve conditions around the world, they prefer measures that are less intrusive than fair traders, who regard the unfettered market as injurious to these same goals.

Free traders argue that in the long run markets will solve – that is, when permitted to come to equilibrium, both rich and poor nations will benefit. In this way, free traders hold that free trade is fair trade.

• Does free trade result in a "race to the bottom" with growing inequity and social injustice?
• Do market prices in a system of free trade not properly reflect the true costs associated with a product due to externalities such as environmental and social costs?
• With free trade, will, in the long run markets will solve such problems as poverty?
• Should trade in goods produced with child labor be restricted?
• Does Europe benefit from its agricultural subsidies?
• Should their be restrictions on the "dumping" of imported goods?
• Are consumers willing to pay higher prices in order to achieve social fairness?