Fair Trade or Free Trade?

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Lightningman_42
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Fair Trade or Free Trade?

Post by Lightningman_42 »

What are the ethical pros and cons of each?

Which of these two forms of trade is overall more ethical? Which one should I favor?
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brimstoneSalad
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Re: Fair Trade or Free Trade?

Post by brimstoneSalad »

They can both be associated with some serious problems.

In the latter, case, if the government is subsidizing things (*cough* U.S. corn subsidies *cough*) it can mess up the economy of a poorer trading partner.
In the former case, it can artificially inflate the price of goods and then cause a crash.

We need smarter trade policies, and ones that aren't just self-interested but that take into account how we affect the economies of our partners.

On a national level, free trade is better than protectionism (one of the two main reasons I opposed Sanders) or sanctions, but it comes with some caveats.
On a personal level, I wouldn't make any effort to buy fair trade. I don't think the price premium is effective altruism and it can have negative consequences too if done clumsily.
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Lightningman_42
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Re: Fair Trade or Free Trade?

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brimstoneSalad wrote: Tue Jan 09, 2018 7:56 pm They can both be associated with some serious problems.

In the latter, case, if the government is subsidizing things (*cough* U.S. corn subsidies *cough*) it can mess up the economy of a poorer trading partner.
So if I can choose between fair trade and free trade for corn, or any food which I know to be subsidized, then fair is the better choice? Or is it still not worth it, due to the price premium not being effective altruism, and possibly having negative consequences?
brimstoneSalad wrote: Tue Jan 09, 2018 7:56 pmIn the former case, it can artificially inflate the price of goods and then cause a crash.
Is this a severe enough problem that I should avoid all fair trade products? Or is there some sort of rule of thumb that I can utilize, for determining which products are most likely better to buy as fair trade, and which are most likely better to buy as free trade?
brimstoneSalad wrote: Tue Jan 09, 2018 7:56 pmWe need smarter trade policies, and ones that aren't just self-interested but that take into account how we affect the economies of our partners.
OK, sure. Sounds reasonable.
brimstoneSalad wrote: Tue Jan 09, 2018 7:56 pmOn a national level, free trade is better than protectionism (one of the two main reasons I opposed Sanders) or sanctions, but it comes with some caveats.
Bernie Sanders supports protectionism, and protectionism is a bad economic practice? I don't know much about protectionism, so I'll read up about it on Wikipedia (unless you recommend better sources to read for learning about it). I do remember reading something you wrote about Bernie Sanders being opposed to nuclear power, and supportive of subsidies for dairy industries (both of which I'd agree are terrible).
brimstoneSalad wrote: Tue Jan 09, 2018 7:56 pmOn a personal level, I wouldn't make any effort to buy fair trade. I don't think the price premium is effective altruism and it can have negative consequences too if done clumsily.
So free trade it is then? Any rare exceptions?
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brimstoneSalad
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Re: Fair Trade or Free Trade?

Post by brimstoneSalad »

Lightningman_42 wrote: Tue Jan 09, 2018 9:35 pmSo if I can choose between fair trade and free trade for corn, or any food which I know to be subsidized, then fair is the better choice?
Oh, no, I think you misunderstood (I was answering both from a political position and a personal one later).
Free trade as a political policy (not a personal buying choice) has problems. It actually messes up the economy of the importing country.
As I understand it, companies in Mexico imported cheaper U.S. subsidized corn, and screwed over a generation of farmers who couldn't beat those government subsidized prices. It's recovering now, but it can be a serious problem. Nothing you really have to do with as a consumer, though (just as a voter). It's arguably more of a problem with subsidies than with the trade practice.
Lightningman_42 wrote: Tue Jan 09, 2018 9:35 pmIs this a severe enough problem that I should avoid all fair trade products? Or is there some sort of rule of thumb that I can utilize, for determining which products are most likely better to buy as fair trade, and which are most likely better to buy as free trade?
No, I'd just buy whatever you want and not add this to the list of things to worry about. :)
Lightningman_42 wrote: Tue Jan 09, 2018 9:35 pmBernie Sanders supports protectionism, and protectionism is a bad economic practice? I don't know much about protectionism, so I'll read up about it on Wikipedia (unless you recommend better sources to read for learning about it).
Right. And that's fine as a source.
It's more that protectionism can harm other poorer countries we import from.

Trump supported it too, so it didn't come up much in discussion. That was a negative from both of them (just one of many reasons I supported Hillary).

Lightningman_42 wrote: Tue Jan 09, 2018 9:35 pmSo free trade it is then? Any rare exceptions?
I would just consider how something is made. There are rare exceptions there like shade grown coffee might be better, since it seems to preserve forest. Premium products from poor countries are also helpful when they provide more labor and job opportunities. For example, when you're buying shoes or clothing, look at the quality of the stitching; good stitching takes more man-hours and provides more jobs (and makes your clothes last longer).
If you can choose made in the U.S.A./Canada/France/whatever or made in some poor country, maybe choose the latter because it creates jobs where they're needed more.
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