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Is free trade fair trade?

What is free trade vs. fair trade? Please give me examples.?

  • I am researching South Korea for a project and need to know if South Korea is based on free trade or fair trade. I really need help on knowing what these two terms mean too. If there's any helpful links, please post them.

  • Answer:

    Free trade means the trade is based on a comparative advantage and the free market principle without tariff and non-tariff barriers. Fair trade means a movement to get a better trade condition. South Korea has signed a free trade agreement with the US.The trade barriers will be removed to the better trade conditions. APEC and TPP are also moving to free trade the same as NAFTA.South Korea is also the member of the block.

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Free trade is a situation where there are no trade barriers to trade such as tarrifs or quotas, This makes it easier to import/export goods as there are lower restrictions and costs. Fair trade is a term used with production of goods (tea and coffee is a good example) where it shows that the consumer is purchasing a product that is certified to be fair (noramally regarding wages) to the workers.

Andy

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