Question

introduces students to the understanding the positive and negative effects of tariffs and other policies that create trade barriers that inhibit economic prosperity.

Review the attached article, Cocoa Review 2010-11. Prepare a paper that discusses how fair trade has benefited the cocoa industry. You may include outside Internet research to support your discussion. You must also address the following issues:

How has fair trade benefited cocoa farmers more than free trade;

How does fair trade improve product quality; and

How does fair trade benefit social conditions where cocoa is produced.

600 words or more！！！！

Answer 1

Tariffs and Trade barriers: A barrier to trade is a government-imposed restraint on the flow of international goods or services. ... Tariffs raise the price of imported goods relative to domestic goods (good produced at home). Another common barrier to trade is a government subsidy to a particular domestic industry.

4 types of trade barriers:There are four types of trade barriers that can be implemented by countries. They are Voluntary Export Restraints, Regulatory Barriers, Anti-Dumping Duties, and Subsidies.

Tariffs and Trade barriers positive effects:Domestic producers will benefit from the introduction of tariffs. This is because it makes their domestic production relatively more competitive compared to imports. Agricultural tariffs have benefited European farmers as they have been protected from cheaper competition.

Tariffs and Trade barriers negative effects:In effect, all tariffs increase the product price, which discourages its demand, and thereby insulates to a degree domestic producers from foreign competition. ... As a result, each country places higher tariffs on goods determined to be import sensitive.

Fair trade :is an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. Members of the fair trade movement add the payment of higher prices to exporters, as well as improved social and environmental standards.

Fair trade effect on Cocoa:

• Fairtrade cocoa farmers are paid a Fairtrade Minimum Price for their goods, which acts as a safeguard when market prices drop. Organic production is incentivized with a higher Minimum Price.

• On top of the Minimum Price, farmer organizations also receive a Fairtrade Premium which they invest in projects of their choice. Many farmers have used the Premium to improve their businesses and production, replacing old trees and investing in better facilities for crop collection, storage and transport, or processing.

• The confectionary industry is highly consolidated, and Fairtrade works with key industry players to enable them to source large volumes of sustainably produced cocoa. More sales mean more benefits for farmers.

• Fairtrade is also pushing the envelope to establish living incomes for small-scale farmers. If we want cocoa in the future, cocoa farmers need to earn a decent and viable living from their work.

• By supporting smallholder farmers to organize themselves into small producer organizations – such as cooperatives and associations – farmers can negotiate better terms of trade and reach wider markets.