Strategies to reduce inequalities
Trade alliances
While all trade is between individual countries, some have grouped together to make it easier and cheaper to trade. Countries join together and create A commercial contract between two or more countries. or A union formed for mutual benefit, especially between countries. - also known as trading blocs.
The most powerful An agreement governing commerce between two or more countries e.g. The European Union. tend to be located in developed countries, eg the A group of European countries initially formed to remove trade barriers and reduce potential for war within Europe. Citizens of member states have the right to move freely to any other member state to work. (EU) and A trade alliance of North American countries. (NAFTA). However, there are trade alliances across the globe, eg Mercosur in South America and the West African Economic Union. These are also established trading alliances whose membership is made up of developing countries.
Advantages of trade alliances for member states:
- Encourages trade between member countries.
- Provides a much larger market to sell goods to and make larger profits.
- Helps to safeguard the industries of member countries.
- Free trade between member countries means that there are no tariffs or quotas imposed on them. This is good for member states as it means that the goods they are buying will be cheaper, but - it is a disadvantage for non-members, as they will be charged taxes or a limit will be put on how much they can export to countries within the alliance.
- Member governments also To secure financial assistance by a grant ie money that does not have to be paid back. their own industries so that they can produce cheaper materials and goods.
- The removal of Measures taken by a country to regulate and monitor its political boundary., eg lengthy The procedure for examining baggage, cargo and freight for contraband or goods which require to be taxed., means that it is easier and cheaper to import and export goods throughout different countries in Europe.
- The EU provides a much larger The workers employed. for industries so people can live and work in different member countries as they choose.
- Individual countries have more power, as they are part of a 'superpower' which has enormous influence on the world market.
Some countries which sell the same product - form a An agreement governing the sale of goods between two or more countries e.g. OPEC., for example the oil producing countries formed The Organisation of the Petroleum Exporting Countries is a selling alliance.: Organisation of the Petroleum Exporting Countries.
Fair trade
The result of the pattern of world trade is that the producers of primary products in developing countries lose out with low wages and poor standards of living. With little money they cannot afford essentials such as primary education for their children and many children are required to work to help the family earn a living.
The choices that people make about what they buy and where they buy it from has a direct impact on global trade. There are options available to ensure that the goods you buy help to remove When things are unequal. or unfairness - FAIR TRADE.
Trade in which fair prices are paid to the farmers of products. means that producers receive a guaranteed and fair price for their products regardless of the price on the world market. This means their quality of life should improve as will the long-term prospects for their children.
Goods which have been produced from raw materials that were acquired from farmers at a fair price. sometimes cost a little more in supermarkets in developed countries, but many consumers consider this a small price to pay for the benefits they bring.
Fair trade products are becoming more widespread and include tea, coffee, sugar, chocolate, bananas, wine, honey and even clothing made from fair trade cotton.
Fair trade promotes The state of being equal and the same as everyone else. and fair conditions in the production and trade of goods. There are minimum standards and guidance in the pay and conditions of workers and for the The ability to keep something going over time without harming people or the environment. - economic, social and environmental impact in balance - of production and trade. The A non-profit organisation that licenses the use of the Fair Trade mark on products in the UK. promotes A concept that illustrates the ways that people and societies throughout the world are linked in many ways: socially, politically, economically and environmentally. by supporting producers to improve their living conditions, by guaranteeing a fair, minimum price for their products. More than 1.66 million farmers and workers benefit from fair trade in about 73 countries.
Over 1,400 companies meet the criteria set by Fair Trade Labelling Organisations International to sell products carrying the FAIRTRADE Mark. Many stores have signed up to A policy that is followed to ensure that people are treated fairly in the production of goods and services. to ensure fair wages for workers. The Co-operative (Co-op) is a chain of supermarkets which has developed its own range of fair trade products. The Co-op's fair trade range totals 260 products and they are continually looking to introduce even more to allow them to increase the growth of the fair trade market in the UK.
Sustainable practices
For countries to develop they must be able to trade with each other. Many developing countries are engaged in Farming - especially arable or crop farming., so to help them develop, they must be able to make a profit from the crops that they grow. Education is crucial to improving agricultural knowledge and skills and to developing primary industries.
In Tanzania, children are educated in sustainable farming practices as part of their schooling. Farming practices that help to improve the land for growing crops, include The channelling of water from rivers and streams to fields in order to help crops grow., When a hill has steps cut into the side to make more flat land to grow crops., planting trees and building When rows of stones are used to help trap water and stop it washing soil down slopes.. Experts that offer advice to people growing crops or keeping animals. are local people who give advice to local villagers on how to improve their The products that come from a farm e.g. rice.. A type of informal programme that enables people to help themselves and their neighbours to improve their homes in developing countries. are small-scale and allow local people to use simple technology that is produced locally, eg ploughs which can be pulled by cattle. Self-help schemes are sustainable because they mean that people are not dependent on expensive Money that is given on a basis that it has to be paid back over a certain time frame with interest. and People who have a high degree of knowledge and skill in a certain field, eg a doctor is an expert in medicine. from abroad.
In Costa Rica, some people are making a profit from farming in the rainforest without destroying it. When food is produced in a way that can be on-going for many years to come. are allowing farmers to grow and harvest cocoa and organic bananas for sale. The money made from the trade of these products has been used to improve the standard of living of farmers and their families. Other people are making money from trees which have naturally fallen down. They are chopped into logs, removed by buffalo and the timber is sold. Combined with Tourism which aims to be environmentally friendly., these methods are helping to sustain a long-term vision of using the rainforest. Local people are making money while protecting the rainforest to ensure it can benefit use for People who will be alive in many years to come..
In Kenya mobile phones are being used to help improve the economy. More than 80 per cent of people in Kenya have mobiles but only 20 per cent have bank accounts. Phones are being used to transfer money which allows people to trade, eg buy the goods they need from shops. As more money is being spent, the economy of Kenya is improving while at the same time mobile phones discarded in developed countries are being reused.
Question
Describe ways that Fair Trade helps farmers in developing countries.
- Farmers are paid a reasonable price for their products and are not ripped-off.
- Better working conditions mean that farmers have an improved quality of life.
- Guaranteed prices take the stress away from selling crops on the open market.
- Long term contracts provide farmers with a buyer for their produce and a steady income.
- Producers of crops can afford to buy the things they need eg food and clothes.
- Families have more income and can send their children to school.
- Money is available for health care if the farmer or his family become unwell.
- People are less impoverished and have a higher standard of living.