International Trade

Question: Critically examine the gains from international trade. Is free trade the best policy to maximize these gains from international trade? (Justify your answered with examples of theory, policy and empirical example) Answer: Introduction 200 International trade has an effect due to the variations in their productive factors in various countries. Due to these variations in their productive factors effects on their prices differently in various countries. These price differences are the chief reason behind the international trade. There are huge number advantages or benefits of international trade accumulating and building up all of the participants those who are related to such type of trade (De Moraes 45-46). If there is any argument on trade, then most of the economists in the world agree that among the countries trade is the most important factor which makes the world better and developed. Though the international trade is a controversial and debatable factor in the case of both types of political issues which are arises between the governments and domestically. Fair trade is an alternative business structure, a system for the global progress, global commerce system and it also a faith-based actions. It means different things for the different individual. There is no authoritative body, no single and regulatory. Thus, the people should explore the different concepts and models (Farrer). Fair-trade is a trading partnership and it also depend on transparency, dialogue and also the respect that explains to seeks the greater equity in the business of international If it distributes to the sustainable expansion to offer the better trading situations to and it also secures their rights and it also disadvantaged the workers and producers. Main Body 700 When a business firm or a person purchase any goods or accept a service in abroad which is produced more cheaply and increase the living standards of the people in both countries. The term Free Trade means that the countries have the ability to export and import goods, not including any barriers regarding tariffs or taxes or another barrier regarding the products which have no tariffs to their trade. The free trade facilitated the customers by low price goods and increased the standard and amount of exports, which increase the level of benefits according to the scale of economies and make a better choice within the range of goods (Hansen 29-59). Through this free trade business, it can explain that when the countries have lower opportunity cost, and then there is an increase and growth in the welfare of the economic conditions of all of the countries. Free trade facilitates the countries to become expertise in those goods when they obtain comparative advantage or benefit. Along with the benefits and advantages for the importing goods of the consumers, the business firms also exports goods which have a comparative advantage or benefit which also shows a huge improvement in the economic welfare of the countries (Topik 145-148). Due to the low rate of tariffs on the export materials of UK, it will make possible and facilitates a large quantity of jobs which boost the export business in the UK and also increase the growth and development in the economic condition of UK. Along with the increase of tendency doing international business or trade, the domestic business firms faces tough competition from the side of the other foreign countries. Therefore, there should be more amounts of incentives which can cut the costs of the products and also increase the efficiency and affectivity of the business. Since 1945, the rate of international trade or business is increased by 7% in average. Due to this international trade or business, it helps in growth and development of t he financial or economical condition of that particular country(Rice n/a-n/a). Fair trade is primarily a response to the common trade failure to the deliver sustainable livelihoods and expansion also the opportunities to the public in the developing nations in the world. The primary object of the fair trade is to be consistent with the standards values and the principles but it also flexible at the implementation level and this type of challenges in defining the ideas in concrete and the practical procedures which need to apply universally. Conversely, to understand the underlying guides and the principles of the Fair-trade are crucial and it as an adoption of this procedures to segregate the principles, risks also losing a vital part of the entire philosophy that has been progressed through dialogue and also experience by the fair trade companies over the year (Roberts). This is also described to trend in this part of a broad range of social responsibility, though there rapidly inc reased the acceptance which sufficient compliance needs the original and genuine commitment. According to this text, the fair trade is unquestionable which is effectiveness is influenced not just through that is a company or the firm does, but also how and why they do this. The main aim of the fair trade is to connect consumers and the producers, and it also promotes the more appropriate trading situations and also built the relationship between the producers and the consumers about strengthen the situation, poverty and also they manage their lives. This assignment allows representing a whole diagram of the certified organizations; farmers and the workers and it also detect that how they benefited from the fair trade. To obtain a precise understanding of how fair trade helped the public, it also designated comprehensive tools for evaluating and the monitoring impact (Singh). The benefits of the fair trade means are to create the system through the fair trade policy which allows the small workers and the farmers to improve their standard living. The benefits of the fair trade incorporate amongst such other facilitated to access the market, extended period relationships, and also the better trading situations are created most of the scenario, a fair-trade minimum cost for the goods with a fair trade premium. Conclusion 100 Traditional trade theory is accepted and well settled. If there is any argument on trade, then most of the economists in the world agree that among the countries trade is the most important factor which makes the world better and developed. International trade has an effect due to the variations in their productive factors in various countries. Due to these variations in their productive factors effects on their prices differently in various countries (Suomela). These price differences are the chief reason behind the international trade. In this globalized world, very few numbers of people would voices up questions about the benefits of free trade. For the growth and development of the global economic condition, free trade is more important and essential than fair trade. Though, free trade, and fair trade both have a common factor regarding the global justice, global prosperity and poverty alleviation. Through this study, it can be said that fair trade is an efficient and competent m easure for supervising and improving the system of free trade. References De Moraes, M. (2008). Fair Globalization Means Free Trade in Agriculture.New Perspectives Quarterly,18(3), 45-46. https://dx.doi.org/10.1111/0893-7850.00421 Farrer, T. (1885).Free trade versus fair trade. London: Cassell Co. Hansen, J. (2009). Free Trade, Fair Prices, and Sustainable Deficits.Challenge,52(6), 29-59. https://dx.doi.org/10.2753/0577-5132520602 Rice, J. (2009). Free trade, fair trade and gender inequality in less developed countries.Sustainable Development, n/a-n/a. https://dx.doi.org/10.1002/sd.407 Roberts, R. (2001).The choice. Upper Saddle River, NJ: Prentice Hall. Singh, N. (2001).Free trade versus fair trade. New Delhi: Anmol Publications. Suomela, J. (1993).Free trade versus fair trade. Turku, Finland: Institute for European Studies. Topik, S. (2010). Fair Trade versus Free Trade in the World of Coffee: Gavin Fridell Fair Trade Coffee: The Prospects and Pitfalls of Market-Driven Social Justice. Toronto: University of Toronto Press, 2007. xix + 347 pp.Latin American Perspectives,37(2), 145-148. https://dx.doi.org/10.1177/0094582x09356964