The modern trading system has been criticized both positively and negatively. In order to maximize the positive and minimize the negative effects of trade, we need to first understand the international trades. Most of the trades can be categorized by free trade and fair trade.
Free trade is the policy which governments do not restrict imports or exports. With free trade, any good, capital, or labor force can flow freely between countries. Free trade has several benefits. It increases production since countries start to specialize their products so they can by cheaper resources from other countries. Secondly, competitive advantage allow competitions. Due to the increasing supply, it is cheaper fro consumers to purchase goods. As production increases, more jobs are available and employees can be treated better. However, free trade doesn't benefit all countries that much. Moreover, it is harmful to those countries. For some countries that depend on only few products, once the demand of the products decline, the countries' economy will be hurt. Many critiques believe that free trade will weaken states' sovereignty since they are subject to adjudication and liberalizing markets. Also, free trade doesn't care much about environment. As more industries are needed to produce huge amounts of products, pollution becomes a serious problem.
On the other hand, fair trade is the movement that help disadvantage producers to get greater profits. Since it is called fair, everything in fair trade is fair, or equal. Producers can receive fairer price and higher returns, labor practices will be fair, and men and women can have the same access to resources and markets. Like free trade, fair trade also has negative effects. Some people say this system only benefit rich countries. It is quite true. Farmers in developing countries provided the products. Because the lack of monitor, the flow of money isn't clear. No one really know if the money returns to the farmers. It is possible that middlemen from rich countries absorb some money from the profits. Which is pretty on fair to those farmers.
There are few ways that can help enlarged positive effects and eliminated negative effects of trade. First, the rule of WTO should be edited. The numbers of representatives in WTO is based on the amount of money a country put in. The United States occupied almost half of the seats based on its wealth. On the other hand, southern countries such as Africa has very few chance to participate or decide anything inside WTO. Another way is to remove subsidies. Government provides subsidies to reduce the costs of products, which can also reduces the prices and have great advantage in competition. This will be harmful to others' economics. Before we change anything, we should all think of what is the original purpose of trade? I personally think that the purpose of trade is not for earning profits but exchange knowledge, culture, or all kinds of things in order to connect everyone, let all human beings become one big family.
Free trade is the policy which governments do not restrict imports or exports. With free trade, any good, capital, or labor force can flow freely between countries. Free trade has several benefits. It increases production since countries start to specialize their products so they can by cheaper resources from other countries. Secondly, competitive advantage allow competitions. Due to the increasing supply, it is cheaper fro consumers to purchase goods. As production increases, more jobs are available and employees can be treated better. However, free trade doesn't benefit all countries that much. Moreover, it is harmful to those countries. For some countries that depend on only few products, once the demand of the products decline, the countries' economy will be hurt. Many critiques believe that free trade will weaken states' sovereignty since they are subject to adjudication and liberalizing markets. Also, free trade doesn't care much about environment. As more industries are needed to produce huge amounts of products, pollution becomes a serious problem.
On the other hand, fair trade is the movement that help disadvantage producers to get greater profits. Since it is called fair, everything in fair trade is fair, or equal. Producers can receive fairer price and higher returns, labor practices will be fair, and men and women can have the same access to resources and markets. Like free trade, fair trade also has negative effects. Some people say this system only benefit rich countries. It is quite true. Farmers in developing countries provided the products. Because the lack of monitor, the flow of money isn't clear. No one really know if the money returns to the farmers. It is possible that middlemen from rich countries absorb some money from the profits. Which is pretty on fair to those farmers.
There are few ways that can help enlarged positive effects and eliminated negative effects of trade. First, the rule of WTO should be edited. The numbers of representatives in WTO is based on the amount of money a country put in. The United States occupied almost half of the seats based on its wealth. On the other hand, southern countries such as Africa has very few chance to participate or decide anything inside WTO. Another way is to remove subsidies. Government provides subsidies to reduce the costs of products, which can also reduces the prices and have great advantage in competition. This will be harmful to others' economics. Before we change anything, we should all think of what is the original purpose of trade? I personally think that the purpose of trade is not for earning profits but exchange knowledge, culture, or all kinds of things in order to connect everyone, let all human beings become one big family.