Business Fair Trade

Questions on Fair Trade

1. Why should countries engage in international trade rather than remaining self-sufficient and avoiding the unfair competition of low-paid foreign workers?

International trade helps all parties involved with economic growth. International trade allows products to be produced by companies who specialize in the product. Products produced with specialization increases productivity and reduce production time.

2. If our country can make everything better and cheaper than foreigners, why would we have any reason to be involved in international trade?

Producing all products better and cheaper in your own country will cause production time to suffer. Livingston says “it still pays for the country with a comparative advantage in all goods to concentrate on producing those goods where its comparative advantage is greatest, and importing those goods where its comparative advantage is smallest from less efficient countries.” International trade increases economic benefits for all countries and consumers involved.

3. Should we “buy American” instead of outsourcing trade and jobs to foreigners?

According to Livingston “it is true that cheap imports and outsourcing will cost some American workers their jobs. But the economic benefits from outsourcing will benefit all American consumers, who vastly outnumber the workers who become victims of cheap imports and outsourcing.” Outsourcing allows us to enjoy the lower costs in stores that all Americans look for. As Americans the price of products is always an area of concern. Wal-Mart, Target, and other large company stores would not be able to have products priced low if not for outsourcing.

4. If we do engage in foreign trade, should we limit foreign trade to nations that engage in “fair trade” by giving us access to their domestic markets and reciprocal import tariff reductions that mirror our tariff reductions on our imports from them?

According to Livingston “We are better off...