What is Fair Trade?
Fair trade is an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fairtrade movement allows for a collaboration between exporter prices and improved standards for the environment and social life. Fair trade certified products can range, from coffee made from coffee farmers to cocoa like chocolate bars made from cocoa farmers.
Fair trade farmers are common characters in the fair trade process and fair trade movement. Products and fairtrade foundation associates use the fairtrade mark or fairtrade logo to symbolize what products are included in their market by using the fairtrade sticker on their products. Worksheets can also be used in the fairtrade process to help with overall organization of products and those in the fairtrade market and with fairtrade means.
Kids can learn a few facts about fair trade products that illustrate the basic concepts behind this company, which they will hear a great deal about if they begin watching the news or reading newspapers early. We have some fair trade facts for kids.
What Can Kids Learn from Fair Trade?
One fact kids can learn is the economic principle behind the notion of fair trade, comparative advantage. This principle states that any given group of people or country will be able to produce some goods more efficiently that another group of people or country.
If everyone manufactures the products they can produce most efficiently and then trades another country for the goods it cannot produce as efficiently, the principle states that everyone will generate the most profit with fair prices. This principle works across international borders, in that some countries will be more efficient at producing certain goods than other countries and the countries should trade these goods with each other.
Trade barriers create conditions for "unfair" trade. One of these trade barriers is the concept of a "tariff," or a tax on goods entering a given county's market. If a country passes a tariff on a given product, the government collects a fee every time the product enters the country.
This makes the items more expensive, which reduces its ability to compete with similar domestically created products. Sometimes the passing of a tariff makes an item more expensive than a similar domestic product, when the government fee is included in the price. Fairtrade premiums are also included in prices of items included in the supply chain and movement.
A quota is another kind of trade barrier. Unlike a tariff, quotas are not taxes on goods entering a given country. Quotas specify a maximum amount of a foreign product that can enter a country in a given year. Once that quota is met, the country does not allow anymore of that product to enter the country. If a country sets a quota of ten tons of foreign steel for a given year, once a foreign country sells ten tons of steel in the country, it is not allowed to sell any more steel for the rest of the year.
Fair Trade Agreements
Fair trade agreements are treaties between different countries that agree to limit the number of trade barriers they put up regarding each other's products. These agreements allow products from each country to enter the trading country without the product being taxed by a tariff, or limited by a quota. One example is the North American Free Trade Agreement (NAFTA), which restricted trade barriers between Canada, the United States and Mexico. Countries like Ghana, Kenya, New Zealand and the Dominican Republic are also included within fairtrade work and fairtrade standards being used in their fairtrade towns of production.
Agreements can also be made to protect working conditions for those involved in fair trade processes, help with sustainability and growers, as well as help with products in the process like fairtrade coffee, pesticides, fairtrade bananas, fairtrade cotton, fairtrade cocoa or fairtrade chocolate. Other needs of empowerment for climate change, healthcare and importing information can be included within the fairtrade movement and agreements. Fairtrade schools are another option for educating kids on what the fair trade certification and fair trade labels mean.
Micah McDunnigan has been writing on politics and technology since 2007. He has written technology pieces and political op-eds for a variety of student organizations and blogs. McDunnigan earned a Bachelor of Arts in international relations from the University of California, Davis.