how does fair trade affect development?

Question

how does fair trade affect development?
best full answer i will give 10 points!

Answer 1

There will be a lot of more complicated, admittedly superior answers, but, throwing my two cents in, I believe the purpose of fair trade is to allow smaller countries to compete with larger countries by imposing price controls, tariffs, or any number of means to prevent large countries from under pricing their goods to where smaller companies and nations can't compete; they can't sell their goods for less, thus they are likely to be over priced in the minds of bargain hungry, budget limited consumers.

As for the effect, it's positive for the smaller country, but I would presume more on a regional than national basis, because the fact remains that larger established companies can expand and create employment opportunities faster than small companies, even when subsidized and payed a fair value for their goods. Over the long term, the smaller companies in a country may be able to aid the economy of their country through the greater spending their employees are able to do, but that would be contingent on inflation, though that's going even further beyond my knowledge.

The short answer, I think that it is as good for the smaller countries as there are regions in them that are benefited by it.

As for the larger countries and companies, I'd think it's generally bad for them, as they would likely have to price their goods beyond what their main consumer bases are used to, though the long term competition might at least stabilize price wars that would ensue, and the larger companies can raise prices on some goods, especially ones that few others sell, to make up the loss in revenue; a pricing strategy smaller companies can't as easily do.

Answer 2

Fair trade affects development, almost always in positive ways because it lifts the economies of all parties involved, it promotes international peace, and enhances progress in vital medical research. Without free trade, sooner or later some country is going to need something vital that they cannot get so they will go to war to get it. I believe, for example, that World War 1 was caused by a coal shortage. Now we are fighting over oil. Some say we will one day fight over fresh water. As long as we have free trade, the world is a better place. People who are producing products for export are less likely to be working on bombs and bullets! :-)

Answer 3

2 immediately obvious results are increased capital among producers and improved communications between remote regions.