Now days, the LEDCs countries has trouble developing through trade with MEDCs, but some times trade is the only way they could develop. Why are they still poor? Now we are trying to maximize the positive effects of trade while minimize the negative effects of trade.
There are two types of trade, Free Trade and Fair Trade. By looking at positive effects of each, it seems like a great deal. The benefits of Free Trade, due to the efficiency benefits from comparative advantage, competition, and avoiding trade barriers, producers are able to lower costs of Goods and still make profits. Through trade, the capital and technology will be influence, it became more available in developing states. Overall free trade has been shown to contribute economic growth.
Fair Trade, organized social movement that aims to create more equitable trading conditions to help disadvantaged producers in LEDCs receives great profit for the goods they produce, but the MEDCs will have to pay slightly more for goods. Benefit of Fair Trade, the producers will receive fairer prices and higher returns to pay workers. The promote of sustainable development can promote less energy intensive production and use of renewable resources. Through Fair Trade, the workers working conditions are much better due to the NGOs, NGOs manage to committed to fair labour practices to stop forced labour, and child labour. They also committed to gender equity which men and women can be paid fairly and work at the same job.
I think that in order to keep the positive effects going, is to give more power to the NGOs and on that, assign a representative of the LEDCs workers to make sure that where the money goes and make sure that people are getting the fair amount of income that they suppose to get. Have LEDCs and MEDCs each send a "middle man" to sort out the unfair and make sure each other are not absorbing all the income that suppose to be paid to the workers. Another advice is to promote environment protection, in case one farmer increases it's supply which he or she can lower the price, and that hurts other farmer that does not have much technology and resources to develop enough supply. They can also set a buying range which means each MEDCs can only buy a amount of supply, so that all LEDCs has chance to trade with the MEDCs.
There are two types of trade, Free Trade and Fair Trade. By looking at positive effects of each, it seems like a great deal. The benefits of Free Trade, due to the efficiency benefits from comparative advantage, competition, and avoiding trade barriers, producers are able to lower costs of Goods and still make profits. Through trade, the capital and technology will be influence, it became more available in developing states. Overall free trade has been shown to contribute economic growth.
Fair Trade, organized social movement that aims to create more equitable trading conditions to help disadvantaged producers in LEDCs receives great profit for the goods they produce, but the MEDCs will have to pay slightly more for goods. Benefit of Fair Trade, the producers will receive fairer prices and higher returns to pay workers. The promote of sustainable development can promote less energy intensive production and use of renewable resources. Through Fair Trade, the workers working conditions are much better due to the NGOs, NGOs manage to committed to fair labour practices to stop forced labour, and child labour. They also committed to gender equity which men and women can be paid fairly and work at the same job.
I think that in order to keep the positive effects going, is to give more power to the NGOs and on that, assign a representative of the LEDCs workers to make sure that where the money goes and make sure that people are getting the fair amount of income that they suppose to get. Have LEDCs and MEDCs each send a "middle man" to sort out the unfair and make sure each other are not absorbing all the income that suppose to be paid to the workers. Another advice is to promote environment protection, in case one farmer increases it's supply which he or she can lower the price, and that hurts other farmer that does not have much technology and resources to develop enough supply. They can also set a buying range which means each MEDCs can only buy a amount of supply, so that all LEDCs has chance to trade with the MEDCs.
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