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Fair Trade Agreement

Definition

A fair trade agreement is a pact between countries that aims to ensure producers in developing countries get a fair price for their products, promote sustainable farming practices, and support social development.

Analogy

Think of a fair trade agreement like the rules in a sports game. Just as these rules ensure all players have an equal chance to win, a fair trade agreement ensures all producers, regardless of their country's economic status, have an equal opportunity to sell their goods at a reasonable price.

Related terms

Trade Barrier: This refers to government-imposed restrictions on the free international exchange of goods or services. It's like putting hurdles on the track during our sports game analogy - it makes it harder for certain players (countries) to compete.

Globalization: This is the process by which businesses or other organizations develop international influence or start operating on an international scale. In our sports game analogy, this would be like expanding the game beyond one town or city to include teams from around the world.

Economic Sustainability: This is the ability of an economy to support a defined level of economic production indefinitely. Like ensuring our sports field remains playable for future games by maintaining its condition and not overusing resources.