State interference in international trade Methods of interference Regardless of what comparative-advantage theory may say about the virtues of unrestricted trade, all nations interfere with international transactions to some degree. Tariffs may be imposed on imports—in some instances making them so costly as to bar completely the entry of the good involved. Quotas may limit the permissible volume of imports.
Co-operative structure differs from that of investor-owned firms IOFs in that all members pay a uniform membership which entitles them not only to an equal share in the co-operative, but also an equal responsibility for controlling it.
Because all members are both users and managers of the enterprise, there is theoretically an equal incentive for all to participate in the active running of it. Where the main objective of an IOF tends to be profit maximization, maximum return to members is the general objective of co-operatives, though not necessarily their only aim.
In addition to having several alternative objectives, co-operatives often [but not necessarily] have other, non-economic aims that IOFs do not have, such as participation, democracy and member education. Co-operatives are made up of individual creative beings, and hence differing objectives, both within and among them.
This has important implications for the way they are able to operate as economic agents in a marketplace run primarily by investor-owned firms IOFs. Southern co-operatives serve both a social and an economic function. Economic benefits are generally in the form of "increased competitiveness, economies of scale, credit opportunities, innovation and member education" Milford Innovation is supported in co-operatives through improved access to information and technical capacity.
Some fair trade co-operatives i. UCIRI have formed unions to help them manage economies of scale. Economies of scale help co-operatives attain collective goods such as infrastructure, vehicles, shops, hospitals, etc.
In addition to managing economies of scale, co-operatives help producers negotiate better prices Bacon The success of fair trade co-operatives has been attributed to their capacity to invest a portion of the higher prices they receive in infrastructure, payment of co-operative debt, member credit, technical assistance, administrative costs, housing and education.
The social benefits of co-operation are equally important. Grassroots involvement and democratic participation as a function of co-operatives has the spin-off effect of creating social capital i.
Social capital directed at practical ends such as common marketing brings people together in the first instance, then through the empowerment of co-ordinated action "networks are formed, people start trusting each other more and participation becomes the norm. Indeed, the United Nations Secretary General has acknowledged co-operatives as "associations and enterprises through which citizens can effectively improve their lives while contributing to the economic, social, cultural and political advancement of their community and nations.
Yet, while co-operatives have an important social and economic function in Southern agriculture and fair trade, Northern markets have by and large eschewed the co-operative approach as a means of expanding fair trade. Low utilization of co-operative models may be partly attributable to the historic failure of many early co-operatives to successfully achieve their social development goals Birchall Milford's study, for instance, shows that while Southern co-operatives in general may not necessarily succeed in their attempts to support marginalized producers, those associated with fair trade, particularly in the coffee sector, have almost without fail seen their living conditions improve, albeit in limited ways.
The International Development of Fair Trade The idea of fair trade has its roots in initiatives aimed at ethical trade practices initially conceptualized as 'alternative' trade. These date back to co-operative movements working in late 19th century Europe to create integrated economies from the producer to the retailer Young The notion of an integrated economy, or 'alternative' trade, is not necessarily the same thing as 'fair trade.
With the exception of the purchase of coffee to support the Sandinistas in Nicaragua, the early fair trade market did not trade commodities, but was primarily concerned with handmade folk crafts.
The UNCTAD slogan arose from evidence that the current trade system based on commodity production was creating "a self-perpetuating cycle of subordination and impoverishment that was a major factor in the 'under-development' of the Third World" Ogle The early fair trade movement, much like the early co-operative movement, was a response to this issue.
From the late s onward, the notion of 'alternative trade' was primarily associated with political solidarity movements such as Oxfam campaigns which sought to address power imbalances in the dominant world trade system.
Alongside such efforts toward 'solidarity' trade was a branch of alternative trade whose focus was economic development. Rather than focusing on solidarity with the politically and economically marginalized, 'development' trade was more concerned with organizing producers and production, providing social support to farmers, and creating an export market to the North IFAT ATOs such as Stichting Ideele Import in the Netherlands, and Twin Trading in the UK, were likewise established in Europe to assist politically and economically disadvantaged countries by providing poverty relief through trade.
As questions arose about the motivations and effectiveness of foreign aid policies, awareness of the growing gap between rich and poor nations also began to grow. Over the course of the s, tensions developed over differences in foci between environmentalists concerned with organic or environmentally friendly products and social activists concerned with economic justice.
Two key organizations began to work on setting international labeling standards for certified Fair Trade. Fairtrade Labelling Organizations International FLOwith headquarters in Bonn, Germany, was established in in an effort to develop standards for international product-specific and fair trade criteria.
FLO affiliates negotiated an agreed upon set of standards and a system of independent monitoring to produce a certification label that consumers could recognize as 'authentic' fair trade.
Several participating countries had already established markets based on local certification labels so it was not considered feasible to instate a new internationally recognized certification label. Hence, it was agreed that each affiliated country could choose its own FLO certifying body trade name i.
In May, elected representatives from IFAT's network of artisans, farmers, growers, cooperatives, networks and businesses from Asia, Africa, Europe, Latin America and the Pacific Rim initiated an 'Agenda for Change' which involved a strategic review and global restructuring of the network.
The WFTO is a global federation of businesses using standards similar to those of FLO-certified Fair Trade but verified by self-assessment, mutual reviews and external verification. Contradictions of Certified Fair Trade and the Co-operative Solutions The Rochdale style of consumer co-operative became the norm for others to follow because it clearly demonstrated a model that worked effectively to the benefit of all.
The 'fair trade' movement, like the original Rochdale consumer co-operative movement grew slowly at first, but gained notable momentum in the past decade, due in part to initiation of the FLO Fair Trade label in Recent studies, however, have criticized the FLO-certified system of Fair Trade for its limited capacity to work effectively to the benefit of all DergousoffFridellJaffee Although certified Fair Trade labels have arguably contributed to rapid growth of fair trade market share, the system has been criticized, particularly by Southern trading partners, for its focus on market growth at the expense of the transformation of existing relations of trade.Informal Producers The programme’s objective is to link these producers with international value chains and develop the necessary support infrastructure to achieve sustainable sales.
International Trade Barriers. Economics. Learning Objectives. Explain how cultural differences can pose as barriers to international business. Key Takeaways Key Points. International trade: International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of GDP.
International Trade and Learning Objective. Topics: International trade, So high tariffs will barrier the imported goods and hinder the development of international trade.
Moreover, with the heavy government intervention in the economy, tariff has been endowed with the function of . § Implementation of Texas Essential Knowledge and Skills for Transportation, Distribution, and Logistics, Adopted (a) The provisions of this subchapter shall be implemented by school districts beginning with the school year.
Learning Objective: Discuss the role of international trade in the U.S.
economy. Imports are goods and services bought domestically but produced in other countries. A tariff is a tax. Learning Objectives International Trade Finance Course Objectives • Explain the nature and scope of trade finance, particularly the “Four Pillars” of trade finance—payment facilitation, risk management, financing and the provision of information related to a transaction.