Why it is important for developing nations to be inolved in trade and free trade movement

Why is it so important for developing nations to be involved in trade, and what institutions and policies exist to help developing nations? 

Countries get involved in trades because by themselves they cannot satisfy all their needs and wants.  Generally, a country will produce a surplus of certain products and will trade for the product they need.  Free trade is vital for developing countries because it gives them access to new technology and resources that they do not have. Trades give access to all the parties involved to the markets in which they seek to do business. Nowadays, the countries that are more open to trades are the ones that are more developed and that have a higher standard of living.

There are several organizations that aim to assist developing nations in reaching their goals such as the International Monetary Fund (IMF), The World Bank, and the Organization for Economic Cooperation and Development (OECD).  

Let’s take, for example, the OECD; their mission is to improve the economic and social well-being of people around the globe.  They provide an opportunity for governments to work together to share experiences and seek solutions to common problems.  The OECD is able to recommend policies to help improve a country’s economy thus making improvement in people’s lives.  The OECD uses its wealth of information on a broad range of topics to help government’s foster prosperity and fight poverty through economic growth and financial stability.  

Now let’s talk about the Fair Trade movement which is a social organized movement that began in the 1950’s as an agreement between retailers, non-profit importers, and small producers as a way to curb the influence of the middleman in developing nations. The fair trade movement focused on exports between countries and aim to improve the life of farmers in poor nations.  The goods that the organizations mostly focused on are coffee, sugar, cocoa, and bananas.  Their goal is to help producers find financial footing and get paid a fair share for their product.  The organization claims to assure a safe working environment for their workers, and ensure the consumers that their products are safe.  The organization aims to give producers independence, and to help them market their products.  They create opportunities for the producers by helping them gain access to capital and by getting paid a fair price for their product.  Fair trade organizations are mostly popular in Europe and have been making steady inroads into the United States.

 

The Fair Trade movement is not without its critics, which believe that the organization only benefits the companies not the producers.  Critics also hammer fair trade by believing that the company’s product are fairly expensive and that it does not benefit the same people it claims to help.

In my opinion, the Fair Trade movement does help farmers, but it also goes against the very essence of the free market.  If farmers in poor countries cannot compete, then they should find another occupation.  I believe that the organization’s rise is due to poverty in the world and humanity’s willingness to help those that are in need.  The Fair Trade movement is a direct response to aggressive capitalist.  The Fair Trade movement is a win for developing nations and an asset for their continued success.  As much as I believe in free trade, I am not naïve enough to believe that every nation possess the infrastructure to compete.  Countries like Brazil and Argentina that have the infrastructure to compete will do well but those of the third world like Haiti that does not possess the vision, the infrastructure will perish.

 

 

Reference

 

                        Carbaugh, Robert J. Global Economics. Mason, OH: South-Western, 2010. Print.