forthcoming in Philosophy & Public Affairs [2008].

Standard economic theory teaches that trade benefits all countries involved, at least in the long run. While there are other reasons for trade liberalization, this insight, going back to Ricardo's 1817 Principles of Political Economy , continues to underlie international economics. Trade also raises fairness questions. First, suppose A trades with B while parts of A's population are oppressed. Do the oppressed in A have a complaint in fairness against B? Should B cease to trade? Second, suppose because of oppression (...) or lower social standards, A's products are cheaper than B's. Can industries in B legitimately insist that their government take measures to help them compete? The Pauper-Labor Argument makes that case, and many economists enjoy dismissing it in undergraduate classes. Third, suppose A subsidizes its industries. If this lowers world market prices, does B have a fairness complaint against A? Ought countries to consider how trade policies affect others? This article is the first of two, which together develop a view that is meant to serve as a reference point for moral assessments of international trade policies. I develop this view by way of offering affirmative answers to these three questions. Since this discussion is organized around these three questions, the two studies can be read independently of each other. Key Words: the state • World Trade Organization • development • oppression • exploitation. (shrink)

Kennedy School of Government, Harvard University, USA, mathias_risse{at}ksg.harvard.edu ' + u + '@' + d + ' '//--> It is a widespread view that support for Fair Trade is called for, whereas agricultural subsidies are pegged as unjustifiable. Though one supports farmers in developing countries while the other does the same for those in already developed ones, there are, nonetheless, similarities between both scenarios. Both are economically `inefficient', upholding production beyond what the market would sustain. In both cases, supportive arguments (...) can assume two forms. First, such arguments might draw on normative claims made by producers. In the case of agricultural subsidies, farmers in developed countries assert claims against their fellow citizens, who ought to accept redistributive measures to keep them in business. In the case of Fair Trade, the claim can be made by farmers in developing nations against consumers, who ought to pay higher prices to keep them in business (under conditions deemed acceptable). Second, arguments to keep producers in business might be presented as the prerogative of both groups: even if farmers in developed countries did not have a claim to be kept in business, these countries would have the right to take measures to do so because they value their products. In the case of Fair Trade, even if farmers in developing nations had no claim against consumers, it is a consumer prerogative to pay more to keep them in business because they value their product or the process of producing it. There are, of course, differences between these scenarios as well, but in light of these parallels in the moral cases for subsidies and Fair Trade, it will be illuminating to examine the arguments for and against subsidies and Fair Trade together. Key Words: trade • subsidies • fairness • markets • development. (shrink)