UNIVERSIDAD DE LAS AMERICAS Political Science and International Relations

Andr Granda Garrido November 17, 2013

DEPENDENCE THEORY AND FAIR TRADE Globalization has helped to eliminate political and economic borders in the world, but at the same time has allowed inequality and differences between rich and poor countries increased. Developing countries are required to maintain its status as suppliers of raw materials, while developed countries enjoy the benefits of free trade and export of valueadded goods. The global financial system and global trade relationships are created to maintain this unfair and unequal system. These inequalities in international trade have made the poorest countries looking for an alternative, replacing the simple free trade for the desired fair trade. The poverty and condition of undeveloped countries is directly related with the integration of these countries to the established system and economic status quo. This is an inevitable reality because the commercial exchanges occur between countries that are very different and with its own economic and socio-political conditions. Therefore, the commercial relations between developed and undeveloped nations is not equitable and is characterized by uneven terms and unfair agreements. The poorer countries defined as the periphery are constantly dependent of the richer states or core and gradually depleting their resources in order to continue providing the raw and basic goods to the more advanced economies. The economic power of the richer states is used for perpetuate the system and maintain their dominance of undeveloped nations, usually through coercive direct and indirect ways. The conditions and trade agreements should be evaluated and redefined according to the needs of the poorest countries. Fair trade is not an illusion but an urgent need for the world's poor majority. The notion of fair trade implies a very broad sense of necessary justice. For advocates of fair trade, justice goes hand in hand with human dignity. Promoting trade liberalization without taking into account the concerns expressed by the dependency theory, would help only the rich become richer and the poor poorer. Third World countries should actively promote fair trade and critically analyze the impact of free trade which by itself has contributed only for the benefit of countries with a high level of development and competitive industries prepared for the global market.

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