According to the British charity Action Aid, cheap fashion comes at a Essay

According to the British charity Action Aid, cheap fashion comes at a human price (BBC news 20th July 2010). Critically discuss - Essay Example Therefore the basic theory of trade is supported by the fact that it makes both the participating nations better off in terms of their economic positions. Trade is further facilitated with reduction in protectionism or import tariffs. The advantageous position is usually assessed in terms of cost. This can further lead to the belief that: â€Å"When trading partners use more of their time and resources producing things they do best, they are able to produce a larger joint output, which provides the source for mutual gain† (Carbaugh, 2008, p.14). Now looking at the comparative advantage theory of trade one can study the labor market where Krugman observes that the developing nations have been able to compete with the developed ones on the basis of their ability to supply cheap labor. Therefore export-oriented growth is of great help to these people. The industries like textiles and garments firms have capitalized on the unskilled labor force of the developing nations and it mig ht not be very just to oppose the idea of providing cheap fashion at human cost unless a suitable alternative can be provided to industrialization on the basis of low wages. While it cannot be denied that while people crave for the designer sport shoes, they might not realize that the products are manufactured at the cost of hard labor efforts of women and children compelled to work in malnourished conditions and almost â€Å"slave wages†.... Hence the remark of the British charity Action Aid, that is, â€Å"cheap fashion comes at a human price† might be analyzed in the light of trade in industrial goods with a specific focus on fashion and textiles. Trade is also supposed to keep the domestic producers busy in innovations and increasing efficiency of their production processes. It helps in curtailing monopolies and decreasing the prices of goods like electronics, clothes and household appliances. However other sectors like sport tickets, car repair and other service segments which are unaffected by globalization show rise in prices. Thus the industrial goods sector mostly witness a control of inflationary pressures. Now if one looks at the technology behind the production process there always exists an asymmetry of information across the nations such that one group shall have technological advantage over the industrial sectors than the other group. The dependency theory proposed by Baran also divides the world int o center and periphery where the center is represented by the developed nations with the technological advantage and the periphery is concentrated by developing countries that mainly produce raw materials for the center and lack of the technological know-how is the essential factor behind their setback. A line of inequity also marked the multilateral trading framework. The GATT ignored two very significant sectors – textiles and agricultural and no stabilization was rendered for commodity prices which declines against the prices of industrial goods (WTO, 1999). The steady decline in commodity prices deteriorated their conditions further and hence led to worsening of economic conditions of the