“Trade is neither inherently good nor bad. But how it is conducted is a matter of great concern-and an unprecedented opportunity. Trade can either contribute to the process of sustainable development or undermine it. Given the rapidly accelerating destruction of the earth’s natural resource base, there is no question what the choice must be.” -Hilary French, author of Costly Tradeoffs: Reconciling Trade and the Environment.
It is common to hear Free and Fair Trade used interchangeably, yet they function in constant opposition.
Free trade is based on the conventional economic idea that “international trade without the interference of tariffs, subsidies, price controls and pork-barrel politics is by far the most efficient way of matching global supply to demand while making all the participants more prosperous.” In theory this is a wonderful concept; however, the chasm from theory to reality is quite broad.
Free trade in practice has proven detrimental to the poor and beneficial to the powerful. It is not surprising that the latter strive to expand this system, with the current fast track negotiating authority making this all too easy. Under this speedy version enacted in 2002, Congress has enacted seven free trade agreements (United States-Chile Free Trade Agreement, the United States-Singapore Free Trade Agreement, the United States-Australia Free Trade Agreement, the United States-Morocco Free Trade Agreement, the Dominican Republic-Central America-United States Free Trade Agreement, the United States-Bahrain Free Trade Agreement, and the United States-Oman Free Trade Agreement), with five (Colombia, Peru, South Korea, Malaysia and Thailand) being heavily endorsed before the fast track expires this year. Free trade agreements are done behind closed doors between the president and the potential countries equivalent positions, and can not be amended.
Theorists claim that removing all barriers and tariffs to trade will “be beneficial for workers, whose wages and benefits can rise as foreign markets expand for their goods.” However, when free trade practices are implemented it is usually the opposite that occurs. Large corporations push out smaller, locally-owned businesses. US jobs are lost to overseas production where labor and safety laws are non-existent or not well enforced (879,280 U.S. jobs moved overseas after NAFTA). The money is drained from the poorer countries as corporations fail to reinvest locally. Slave labor conditions abound which do not differentiate between adults and children.
We have found it necessary in the US to outlaw child labor, require safe working conditions, and set a minimum wage. Why then do we take advantage of the non-existence of these laws in other countries to produce cheap goods? We have placed a value on human life and a standard treatment as such, now we must extend that to people other than US citizens and stop conflating profits with human rights.
And to directly counter the exploitation of Free Trade, there is Fair Trade. At its core Fair Trade is remembering the value of people. It is not simply an attempt to set a price floor. Rather it is placing the value of human life and environment equal to profit. We have found cause to implement this within our borders and there is no reason this should be an arrangement exclusive to 1st world citizens. The Fair Trade criteria (from the Fair Trade Federation) are:
- Paying fair wages in local context;
- Supporting participatory workplaces;
- Ensuring environmental sustainability;
- Supplying financial and technical support;
- Respecting cultural identity;
- Offering public accountability; and,
- Educating consumers.
The Fair Trade system is not perfect. It faces legitimate criticisms and challenges, and through this scrutiny is kept honest to its values. Nor should Fair Trade be the ultimate solution but rather a necessary step towards improvement. It strives to establish a new basic economic imperative; the realization that trade is fundamentally a human interaction, with respect for all people involved in the trade.
