Globalization and free trade. Pros and cons.

Globalization can be described as a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, sociocultural and political forces. It's a movement of people, goods, capital and ideas due to increased economic integration.

I think that globalization is an extremely complex web of many things and like any other process it has its positive and negative sights.

Pros of Globalization

1. Productivity grows in countries that open up their markets and integrate with outside economies, as they gain access to wealthy economies where they can sell their goods and services.

2. Lesser Developed Nations benefit from the increase in investment from foreign countries both financially and through jobs.

3. Global competition and cheap imports help to keep inflation down.

4. Open economies help to spur innovation and new ideas on a global level.

5. Through globalization, countries can specialize more in what they produce and what they do best.

Cons of Globalization

1. Wages and working conditions everywhere are pushed downwards as companies gravitate towards countries where the wages are the lowest and the workers’ rights are the worst.

2. The environment suffers, as production moves to places where they have less strict rules and regulations about controlling pollution.

3. Globalization means that economic problems in one part of the world can spread easily and create a worldwide recession.

4. Many of the deals made by more economically developed nations with lesser developed countries are unfairly weighted in favor of the more developed nations.

5. Globalization undermines national sovereignties and national governments, as individual countries become increasingly at the mercy of international markets, and multinational corporations grow more powerful and influential.

And in the end I'd like to say that globalization is still a controversial issue for businesses and governments throughout the world and nobody knows when a compromise will be found.

1.3

Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries to make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to exporters as well as higher social and environmental standards. It focuses in particular on exports from developing countries to developed countries, most notably handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate, flowers, and gold.

 

Key principles

Fairtrade is an alternative approach to conventional trade and is based on a partnership between producers and consumers. Fairtrade offers producers a better deal and improved terms of trade. This allows them the opportunity to improve their lives and plan for their future. Fairtrade offers consumers a powerful way to reduce poverty through their every day shopping.

Тhe minimum price paid to Fairtrade producers is determined by the Fairtrade standards. It applies to most Fairtrade certified products. This price ensures that producers can cover their average costs of sustainable production. It acts as a safety net for farmers at times when world markets fall below a sustainable level. Without this, farmers are completely at the mercy of the market.

When the market price is higher than the Fairtrade minimum, the buyer must pay the higher price. Producers and traders can also negotiate higher prices on the basis of quality and other attributes.

Fairtrade standards exist for food products ranging from tea and coffee to fresh fruits and nuts. There are also standards for non-food products such as flowers and plants, sports balls and seed cotton.

 

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