Many people confuse the terms “Free Trade”, which has played a major role in countries’ trade policies in the past few decades, with “Fair Trade“. The table below will help clarify the key differences between the two terms.
|Free Trade||Fair Trade|
|Main goal:||To increase nations’ economic growth||To empower marginalized people and improve the quality of their lives|
|Strategy:||Profit is the overriding concern||Balances concerns for people, the planet, and profit|
|Primarily benefits:||Multinational corporations, powerful business interests||Vulnerable farmers, artisans and workers in less industrialized countries|
|Critics say:||Punishing to marginalized people & the environment, sacrifices long-term relationships||Interferes with free market, inefficient, too small-scale for impact|
|Financing:||Payment is received at time of shipment; credit is sometimes extended by informal lenders at exorbitant rates.||Businesses offer producers advance credit with low- or zero-interest…|
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