Impact of Fair Trade Essay Example

using protection to contain their imports and divert them on to the United States, that would indeed be something to complain about (from the viewpoint of steel producers, though cheaper steel imports are good for the U. S. consumers and producers who use steel).

But the United States was saying instead, “Your macroeconomic policies are not good enough, and that is what makes you an unfair trader. ” Would the U. S. policymakers have been happy if the EU and Japan had accused them similarly of unfair trade in the 1980s when it was the Americans who were guilty of incompetence at macroeconomic management? Of course, this reversion to the rhetoric of unfair trade, flying in the face of economic logic, made the politics of both demanding and supplying protection to the ailing steel industry a lot easier.

And so in the United States far too many politicians today have turned into an unfair-trade-obsessed, cynically manipulative lot. Broadly, with a few shining exceptions—such as the former senator Daniel Patrick Moynihan among the Democrats and Senator Phil Gramm, a former professor of economics, among the Republicans—they divide into two groups: the less disagreeable ones whose slogan is “free and fair trade,” and the more disagreeable ones who insist on “fair trade before free trade.” I might cite also the former president, who not merely fed the fair trade mania over Japan, but also called, in his State of the Union address in January 2000, for “a freer and fairer trading system for twenty-first century America. ” The plain consequence is that the ceaseless refrain in favor of free trade by American politicians has nurtured an electorate that thinks

of the United States as a fair trader and others, in varying degrees, as unfair traders.The effect of this public perception, in turn, has been to encourage the thought in the country that free trade is both economically unwise and politically naive. And so, to the litany of hostile sentiments that come at free trade for reasons.

I must add this unfortunate legacy of sloppy surrender by politicians to the rhetoric of fair trade. A surrender to this dangerous rhetoric is particularly evident when one turns to the fair trade arguments that relate to differences in (domestic-pollution-related) environmental and labor standards across countries.It has thus become routine to charge unfair trade when firms in foreign countries have lower environmental and labor standards because (a) they are then regarded as indulging in “social dumping” that needs to be countervailed by a tariff; and (b) it is feared that such differences in standards will trigger a “race to the bottom” that will undermine one's own higher standards. Demands for fair trade are then made on these foreign nations, asking them to raise their standards towards ours. Neither argument, however, is compelling. (Brown 1993, 5-6)