Volume 1, Issue 2 - Special Issue: Fair Trade

A theory of fairness in international trade should answer at least three questions. What, at the basic level, are we to assess as fair or unfair in the trade context? What sort of fairness issue does this basic subject of assessment raise? And, what moral principles must be fulfilled if trade is to be fair in the relevant sense? This discussion presents answers to these questions that derive from a “constructivist” methodology inspired by John Rawls and the social contract tradition.

Economic theory teaches that it is in every country’s interest to trade. Trade is a voluntary activity among consenting parties. On this view, considerations of justice have little bearing on trade, and political philosophers concerned with global justice should stay largely silent on trade. According to a very different view that has recently gained prominence, international trade can only occur before the background of an international market reliance practice shaped by states. Trade is a shared activity among states, and all participating states have in principle equal claims to gains from trade. Trade then becomes a central topic for political philosophers. Both views are problematic. A third view about the role of trade in a theory of global justice is then presented, which gives pride of place to a (non-Marxian) notion of exploitation. The other two views should be abandoned.

Three perspectives on international trade are present in current debates. From the first perspective, trade is regarded as a set of individual transactions among consenting parties and considerations of fairness and justice barely feature, if at all. The second perspective underlines the importance of background structures for trade, maintained by states, which gives rise considerations of fairness and justice. One prominent version of this perspective, for example as defended by Aaron James, views all trading states as having in principle equal claims to the gains from trade. A third perspective puts the focus on exploitation. In this special issue, Mathias Risse and Gabriel Wollner claim that the first perspective should be abandoned and that the type of approach that is instantiated by James fails. This article does not follow them in dismissing the second perspective in its entirety. It suggests that there is a different version of this perspective that is defensible and develops key elements of that version. In a second step, the article seeks to show that, even if there were no plausible account of fairly dividing gains from trade among states, fairness in trade would still generate demanding normative requirements – that can be and should be integrated into a theory of global justice.

This paper discusses the idea that trade – the practice of regularised exchange of goods or services between nation-states for mutual advantage under an orchestrated system of rules – can generate moral duties, duties that exist between only participants in the activity. It considers this idea across three duties often cited as duties of trade: duties not to harm; duties to provide certain basic goods; and duties to distribute (certain) benefits and burdens fairly. The paper argues that these three duties seem unlikely contenders for duties thought in some sense to supervene on trade, the former two because they seem to exist regardless of the existence of trade and the latter because it seems to apply to a group more widely conceived than to be coherently thought centred on trade. It concludes that, at least across these three duties, it is more plausible to think that they are duties which, although possibly having relevance for how trade is conducted, do not emerge from the practice and are, rather, grounded elsewhere.

The article discusses the relation between the concepts of unfair trade, exploitation, and below-subsistence wages with regard to individual economic transactions. Starting from the common notion that exploitation involves some kind of unfair advantage taking, it asks how “unfair” is to be understood, and what it is that is taken advantage of in exploitative exchanges. On this basis it then explores a line of argument for grounding the claim that below-subsistence wages are exploitative, focusing on the condition of morally transformative voluntary consent to transactions. By analyzing the structure of coercion with regard to threats, offers, and circumstances it comes to the conclusion that consent to an offer is morally non-transformative with regard to legitimizing the outcome of a transaction if the person giving the “consent” has only unacceptable options in absolute terms to choose from, since this reduces “consent” to a mere act of rationality devoid of any normative content. Accordingly, it argues that insofar as below-subsistence wages are unacceptable options in absolute terms, they are to be considered exploitative and an instance of unfair trade.

This paper aims to show that fairness in trade calls for relaxing existing WTO rules to include a greater liberalisation of labour migration. After having addressed several objections to global egalitarianism, it will argue, first, that the world’s rich and the world’s poor participate in a same multilateral trading system whose point is primarily to reduce trade barriers, and hence to establish global economic competitions, in order to raise their standards of living; second, that these competitions are subject to requirements of formal and substantive fairness; and, third, that the substantive fairness of the competitions that are taking place in the field of trade in goods is likely to require a greater liberalisation of labour migration, especially low-skilled labour from developing countries.