fair and free trade

Question 1

what is protectionism?

Answer 1

use of tariffs and quotas set by governments on imports

Question 2

what are tariffs?

Answer 2

taxes added to the cost of imports to make them more expensive to purchasers

Question 3

what are quotas?

Answer 3

limits placed on the number of imports that may enter a country

Question 4

what do quotas and tariffs protect countries from?

Answer 4

foreign competitors who import their products and sell them for less than local companies can

Question 5

what does free trade eliminate?

Answer 5

barriers, such as tariffs and quotas, so that commodities may be sold between countries as cheaply as possible

Question 6

what is free trade a fundamental part of?

Answer 6

economic globalization that has been an important trend since the late 1800s

Question 7

what is comparative advantage?

Answer 7

goods produced that are made with better quality and can be sold cheaper than other countries

Question 8

what do countries that support free trade believe?

Answer 8

goods and services should be shipped without tariffs or quotas

Question 9

what can happen to domestic industries as a result of free trade, but what is the overall belief?

Answer 9

sometimes domestic industries have to close down, but the belief is that there are more advantages to free trade than fair trade

Question 10

what is free trade?

Answer 10

a policy in international markets in which governments do not restrict imports or exports

Question 11

when did Canada and the USA sign the FTA?

Answer 11

1988

Question 12

what happened in 1994 to the FTA?

Answer 12

it was extended to Mexico, creating the North American Free Trade Agreement

Question 13

what are the future plans for the FTA?

Answer 13

to expand NAFTA to other north and south american countries

Question 14

what happens when free trade removes tariffs and quotas?

Answer 14

large-scale foreign manufacturers are able to import their cheaper products without any penalty

Question 15

what is fair trade based on?

Answer 15

the belief that poor producers and workers in developing countries do not benefit from free trade

Question 16

what happens under the fair trade system?

Answer 16

producers receive a fair price for their products from fair trade organizations

Question 17

what do fair trade systems cut out?

Answer 17

the middleman- independant buyers, storage operators, shippers, distributors and large manufacturers

Question 18

what happens when world prices for commodities drop?

Answer 18

small scale producers frequently get a price for their produce that does not cover production

Question 19

what role do consumers play in fair trade?

Answer 19

consumers can help protect small scale producers– consumers can buy directly from farmers, artisans, or producer’s cooperatives

Question 20

what does buying directly from the artisans or producer’s cooperatives do?

Answer 20

ensures more of the money paid for the product is returned to the producers

Question 21

what are the 8 principles of fair trade?

Answer 21

• producers receive a fair price for their products
• no forced labour / child labour is used
• safe and healthy workplaces are used
• equal employment opportunities are provided for all people, including the disadvantaged
• long term trade relationships are developed between producer and buyer
• financial / technical assistance is available when used
• environmentally sustainable practices are used
• public accountability is espoused in all aspects of trade and production

Question 22

what is the mission of TransFair Canada?

Answer 22

to improve incomes and living standards of small producers in developing countries by expanding canada’s market for fair trade

Question 23

what is the difference between fair and free trade products?

Answer 23

fair trade products are more expensive and can usually be found online / in specialty stores

Question 24

where does fair trade bring the benefit of economic globalization?

Answer 24

into developing countries

Question 25

what is fair trade?

Answer 25

an organized social movement whose stated goal is to help producers in developing countries achieve better trading conditions and to promote sustainability