Concept of fair trade:

The concept of fair trade is technically referred to as reciprocity. As the name suggests the fundamental argument for fair trade is one of equity. Domestic producers in a fiee trade country argue that foreign trade barriers are unfair because it places them at a competitive disadvantage. The suggestion that a fair trade policy produces a trading environment with fewer trade restrictions allows proponents to assert that such a policy serves to promote both equity and efficiency. On the other hand, critics of a fair trade policy argue  that such a policy  is simply disguised protectionism as  it simply achieves the goals of specific interest groups at the expense of the nation at large.  In many cases, fair trade focuses on a specific  practice.that  can be portrayed as protectionist while ignoring  the entire  package of policies that are affecting  a nation's competitive position. In these cases, the foreign country is likely either not to respond or retaliate  by increasing rather  than reducing trade barriers.  In the latter case, the escalation of trade barriers causes losses for both nations, which  is exactly opposite to the effects of an activist fair trade policy. Providing level playing  field  is yet  another argument which  is  extended by domestic producers for protection against foreign imports.