Free Trade and Fair Trade

Free trade and fair trade are based on different, almost opposite, principles, and this aspect makes the comparison of their advantages and disadvantages a challenging task. On the one hand, free trade allows for reducing barriers for countries, industries, and manufacturers to create an open market in which all parties can effectively compete. On the other hand, proponents of free trade are interested in eliminating wages to reduce costs of production, and fair trade, on the contrary, guarantees the protection of workers’ rights following certain policies (Gillikin, 2018). In this context, fair trade can be viewed as a better approach than free trade because policies and regulations for businesses and markets create the foundation for stable economic development.

Although proponents of free trade accentuate its role in eliminating boundaries between markets and countries and creating advantageous environments for businesses, fair trade protects the interests of workers and contributes to the quality of products. The risks of free trade are in creating the grounds for unfair businesses and trade relations where the key focus is only on profits and the rights of employees are neglected (Gillikin, 2018). This approach to trade cannot lead to creating a healthy market environment without affecting the social status of workers. On the contrary, the presence of efficient regulations and policies to control trade relations and the focus on protecting workers’ rights and interests lead to balancing advantages of free trade and social security (Drezner, 2006). It is more problematic for authorities to realize this approach, but it guarantees community stability and overall economic growth for the nation. Therefore, principles of free and fair trade are often combined in national policies.

Referring to the concept of comparative advantage, it is possible to state that today authorities are more concentrated on enhancing the principles of free trade, but policies related to fair trade are still developed. According to the idea of comparative advantage, any country participating in trade relations can benefit from them depending on the aspects of decreased costs, higher specialization, and higher productivity. Therefore, the United States is interested in improving trade relations with China and developing the North American Free Trade Agreement (NAFTA). These regulations will provide the country with opportunities to focus on producing goods that contribute to the efficient use of resources, and other goods will be provided by trade partners (Drezner, 2006). Thus, the comparative advantage associated with free trade makes the discussion of these types of trade more complex, and researchers and experts become focused on the importance of balancing the principles typical of both approaches.

From this perspective, it is almost impossible to state clearly what approach to organizing trade relations can be discussed as more advantageous in contrast to the alternative. To guarantee that the United States relies on all strengths of developing efficient trade relations, it is necessary to focus on opening markets according to the principles of free trade and refer to comparative advantage. In addition, in order to avoid the situation when workers in different regions of the country and world are paid and treated unfairly, it is also necessary to focus on the norms of fair trade. In this context, the debate regarding the efficacy of free trade in contrast to fair trade can be changed to finding the ways of promoting both principles in nations’ visions concerning their trade.


Drezner, D. W. (2006). U.S. trade strategy: Free versus fair. Web.

Gillikin, J. (2018). Free trade vs. fair trade. Web.

Removal Request
This Free Trade and Fair Trade was created and voluntarily submitted by an actual student. Feel free to use it as a reference source or for further research. If you want to use any part of this work, it’s necessary to include a proper citation.
Content Removal Request

If you hold the intellectual rights for this work and wish for it to be removed from our website, send a request, and we'll review it.

Request Work Removal