|Fair Trade or Free Trade? :
Establishing a Position
The Issue - A Statement of the Problem
For many years, the accepted orthodoxy was that the extension of non-reciprocal preferences of developing countries was an important means of compensating for structural disadvantages which economic operators face in developing countries. Increasingly, however, a new orthodoxy is asserting itself into the mix, namely that the best prospects for the sustainable economic and social development of developing countries lie in their closer integration into the world economy. An intermediate step in this process of integration into the world economy is seen to be the conclusion of free trade area agreements between developed and developing countries. Free trade area agreements progressively open up developing countries markets to duty free exports from the developed country partner.
The significance of this lies in the fact that, for most developing country producers, local, national and regional markets are of greater importance than the distant, largely unknown and relatively high-risk European and North American markets.