Fair trade vs. free trade

I recently received an email from a relatively conservative friend of mine who, although he works for an international agribusiness corporation, confessed he didn't know much about the issues of globalization. But he was trying to educate himself, he said.

Wanting to give him a definition of "fair trade" vs. "free trade", I Googled the two terms. As it turns out, it's not so easy to find an easy and simple yet authoritative discussion of the subject. My own definitions are these:

"Free trade" means the elimination of all government imposed boundaries between nations in order to make the free flow of goods, services and capital between countries as efficient as possible.

"Fair trade" means encouraging trade but moderating it so that all economic groups involved benefit as equally as possible.

I'm an advocate more of fair trade than free trade. Free trade is a wonderful goal, but opening up free trade too quickly often benefits the big players at the expense of the small ones.

The conflict between fair trade and free trade is often couched as an economic justice issue. But it's not; it's also an economic strength and effective government issue: In other words, if the middle and bottom parts of an economy can't afford to buy goods and services, then there goes the economy. And there goes democracy as well, since no democracy has ever survived without a sizable, economically viable and well educated middle class.

For other discussions of fair trade vs. free trade, see:

• "A case for tailoring - and slowing - free trade in poor nations" by Robert B. Reich
• "Free Trade Versus Fair Trade" by Jeffrey Eisenberg
• "free trade faqs" from the Cato Institute
• "Democratizing the Global Economy" from Global Exchange
• "About Fair Trade" by the Fair Trade Federation
• "Fair deals for all: Poor farmers and consumers bear cost of rich 'bullies'" from the Perth, Australia, Sunday Times
  

LP