Monday, 28 April 2008

To trade or not to trade? That is the question.

Free trade, in theory, should create mutual benefits for everyone involved. In reality, however, markets, especially in agricultural products, have been distorted to the advantage of a small group of people. Trade barriers in the developed countries are bringing endless miseries to people in the developing world. To end the sufferings, farm subsidies in the rich world have to come to an end. Before this can be realized, the Fair Trade system will work as a reasonable intermediate solution to the problem. By promoting Fair Trade, the public awareness on global trade injustice can be raised. Fair Trade is a market based mechanism which aims to perfect the flaws in the current trade system so it surpasses other interventionist approach which will just add on the inefficiencies in the market. If the Fair Trade market has grown into a critical mass, this is likely to bring about structural change to the global trade system. This aspiration can be made into a possibility, taking into account the political hurdles and economic consequences. Engaging the farmers in the developed world by persuading them to invest in developing countries, instead of using the cash subsidies to grow their loss-making crops will create a win-win situation for everyone in the globe. The Fair Trade system will act as the platform for the exchange in this solution. Ideally, the Fair Trade system will gradually converge into the world market system until the grand goal to remove all farm subsidies is achieved. Until then, to trade or not to trade will remain an ethical question.

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