The NCFCA LD resolution for the 2018-2019 season has been announced: Resolved: When in conflict, governments should value fair trade above free trade.
Since it’s useless to cry over spilled milk, I’ll ignore that this is a very very very bad (policy) resolution. Instead, I go over some material on trade policy debates that will hopefully jumpstart your research into this topic.
DO NOTE: I am biased in favor of free-trade. This article should be viewed in light of this ideological slant.
First off, what is “fair trade” and “free trade”? Let’s begin with the term that is ostensibly more obvious: free trade.
Definitions of Free Trade
Google: “international trade left to its natural course without tariffs, quotas, or other restrictions.”
Investopedia: “Free trade is a policy to eliminate discrimination against imports and exports. Buyers and sellers from different economies may voluntarily trade without a government applying tariffs, quotas, subsidies or prohibitions on goods and services. Free trade is the opposite of trade protectionism or economic isolationism.
Cambridge Dictionary: “international buying and selling of goods, without limits on the amount of goods that one country can sell to another, and without special taxes on the goods bought from a foreign country:”.
Merriam-Webster Dictionary: “trade based on the unrestricted international exchange of goods with tariffs used only as a source of revenue”.
Dictionary.com: “1. trade between countries, free from governmental restrictions or duties.
- international trade free from protective duties and subject only to such tariffs as are needed for revenue.
- the system, principles, or maintenance of such trade.”
Encyclopedia Britannica: “Free trade, also called laissez-faire, a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports). A free-trade policy does not necessarily imply, however, that a country abandons all control and taxation of imports and exports.”
Collins English Dictionary: “Free trade is trade between different countries that is carried on without particular government regulations such as subsidies or taxes.Free trade is trade between different countries that is carried on without particular government regulations such as subsidies or taxes.”
In short, then, free-trade is the absence of government barriers to international trade. In practice, this means no tariffs on imports, no subsidies on exports, no quotas on imports, and fewer regulations on imports and exports; OR the act of reducing them. The difference between the two is subtle but significant. The first requires NEG to defend a system with absolutely NO tariffs, subsidies, quotas, etc. This is a bit extreme as there are VERY few real-world examples of countries having such policies. The second only requires NEG to defend a system with relatively fewer and less obtrusive restrictions on international trade. This seems more reasonable. But then the question becomes: how do we measure which trade policies are relatively “free”? Do we use the average-weighted tariff? The average-weighted quota? The existence and amount of subsidies? The amount and severity of regulations and licenses on imports and exports? Some combination of these? Do we use a global ranking of free trade, and if so, do the authors use an agreed-upon definition? Or, do we just define “free trade” to be whenever a government takes ANY action to reduce its obtrusiveness over international trade? You can see that it quickly becomes complicated. At the very least, you should be prepared to answer these questions and provide clear and logical warrant(s) for your answer(s).
But what is “fair trade”?
Definitions of Fair Trade
Cambridge English Dictionary: “a way of buying and selling products that makes certain that the people who produce the goods receive a fair price”.
Merriam-Webster Dictionary: “to market (a commodity) in compliance with the provisions of a fair-trade agreement.”
Business Dictionary: “A movement which strives for fair treatment for farmers. In a fair trade agreement, farmers, who in other situations might be more susceptible to the will of the purchaser, will negotiate with the purchasers in order to receive a fair price for their products. Farmers who engage in fair trade also aim to pay their workers a fair price, and engage in environmentally-friendly practices.”
As you can see, the problem with these definitions is that they are incredibly vague. What is a “fair price” and why? When is a free-trade agreement “fair”? (Business Dictionary has a strange definition that confines the concept to agricultural issues.) Who determines what is “fair”? If governments, does that leave room for arbitrary decision making by politicians? If you look up the definition of “fair,” it usually means (in this context) the state of being ethical, just, right, moral, etc. Thus, fair-trade could reasonably be interpreted to mean a system of government trade-policies that uphold ethical business practices. Once again, the debate may hinge upon how much leeway governments should and do have to enforce such ideals.
Here’s another question: what is the relationship between mutual-consent and “fairness”? If people engage in commerce with mutual-consent, but in an objectively unethical manner, should that affect how the government values “free-trade” and “fair-trade”? From a governmental standpoint, should we care if something is unfair/unethical even if mutual-consent remains intact? The answer goes back to the just purpose(s) of government. The reason this matters is that if governments should only care about upholding consent, then they may not need to have any qualms with free-trade. But if a government’s role goes beyond consent and into the realm of enforcing natural law, then fair-trade suddenly becomes more valuable and fair-trade less so. In other words, you could create a debate inside the debate about the purpose of government: to enforce natural law, or to protect individual rights (life, liberty, property), (or even promote the general welfare by reducing negative externalities).
Arguments for Fair Trade
Free-trade exploits workers. Many people in developing countries who don’t have much bargaining power and/or options for making a living can be easily manipulated and exploited by greedy corporations who want to make the most profit through the least cost (wages) as possible. Free-trade makes this possible. With fair-trade, countries can uphold morality and human rights by preventing corporations and businessmen from profiting through unethical practices. You can research examples of workers being oppressed, either through forced labour or inhumane business practices, in the process of international trade and actions governments have taken to stem this problem. For example, the US government bans imported goods that are made with forced labour. The question is, is it really “free-trade” if it is done without consent?
One of the United States’ major trading partners, China, thrives on illegal and unethical practices that have been internationally condemned. (While the resolution is technically global and not time-bound, that reality is that much of the examples and discussion will likely pertain to trade between the US and China, because that is (a) contemporary and (b) likely to be more impactful on judges, depending on their ideological background.)
Free-trade exploits communities. Due to comparative advantage, free-trade enables countries to specialize in certain industries. This means that certain industries of the importing country will get obliterated. Entire industries and sectors of the United States economy have been decimated by Chinese imports. Millions of jobs have been lost. This isn’t just an economic impact. This is a social impact. Since some industries tend to congregate in communities, Entire towns, cities, and areas have been wiped out. Also, since manufacturing provides greatly encourages innovation and R&D, these losses retardAmerica’s innovative edge.
Free-trade leads to unfair trade-deficits.
Basically, fair trade is balanced trade. For example, the United States has a trade deficit (exports – imports) over $500 billion. This is partly due to other countries’ unfair trading practices (as previously mentioned) and the fact that Americans spend more than they save. This is bad and unfair because it means we are losing billions of dollars to other countries, and putting ourselves into dangerous amount of debt. Although the trade deficit (current account deficit) is technically matched by a net capital surplus (the money we give to other countries eventually returns to the US in the form of investment), this is just a way for foreign companies to gain control of American companies, as many Chinese companies have done.
You can see that there are already two major ideas here. One deals with fairness for domestic workers and for the country that is doing the importing, and the other deals with fairness for foreign workers and for the country that is doing the exporting and/or other countries. As AFF, you must decide which theme your case emphasizes, or if you want to include both.
Arguments for Free Trade
Free Trade promotes prosperity. There is an empirical consensus: free trade promotes higher GDP growth, higher standards of living, lower prices, higher quality, and more innovation. For every dollar spent on imports, much goes to the importing country’s own businesses: retailers, transporters, marketers, and the like. Access to international markets has increased the median American household wealth by thousands of dollars. Imports provide cheap inputs and intermediate goods for many American manufacturers to remain competitive. Chinese imports have done more than any other single policy to improve poor Americans’ purchasing power. And while jobs are lost, jobs are also gained. Net job loss resulting from imports has never been proven. On the other hand, past tariffs and restrictions have been drastic failures: net job losses, net loss in welfare, Competition incentivizes innovation and productivity, which is essential for the overall prosperity in the long-run.
Trade deficits have been routinely proven to not negatively harm the economy. All a trade deficit means is that people can buy more stuff with less money; people can get more imports with the same amount of exports; they don’t have to give up more of their own resources.. Seen from this perspective, a trade deficit isn’t a bad thing — it’s a good thing. And an argument could be made that sweatshops (the voluntary kind) actually help those workers because it’s the best (and in some cases, only) option for them to improve their own standard of living as they are the stepping stone out of poverty.
Fair Trade is incredibly vague. Who defines what “fair trade” actually is? Or what the “fair price” is? 99.9% of the time, the government does. In practice, the government uses “fairness” as an excuse to enrich politically connected cronies and special interests through protectionist policies, all at the expense of everyone else.
In fact, one could even say that “free trade IS fair trade.” Bryan Riley and Anthony Kim, writing for the Heritage Foundation, say,
“What Does “Fair Trade” Mean? Politicians often talk about the need to support trade that is “free but fair.” Seldom, however, does anyone explain what fair trade is, or—even more to the point—for whom trade should be fair. In the name of fairness, different special interest groups advocate different protections for their specific industries and call the comparative advantage of other countries unfair. In reality, fair trade occurs whenever there is a voluntary transaction between a willing buyer and a willing seller.”
Yes, “fair trade” policies might be fair…to the select amount of industries that benefit from them. But they are not fair for everyone else. In other words, “fair trade” is another way for the government to determine who to be “fair” to. Ana Eiras writes,
“Politicians, opinion makers, journalists, and businessmen commonly talk about the need to support “fair trade.” Seldom, however, does anyone explain either what fair trade is or–even more to the point–to whom trade should be fair. In the name of fairness, different groups advocate different protections for their specific industries and call the comparative advantage of other countries “unfair.” For example, U.S. manufacturers think it is unfair that labor in China is cheaper than labor in the United States, and therefore ask for tariffs against Chinese products. But those tariffs would, in reality, be unfair to millions of U.S. consumers and producers who would be forced to pay higher prices for locally manufactured goods. “Fairness” assumes a dubious character in policies that pick and choose whom to treat “fairly.”
You should be prepared to handle this argument both ways, as I anticipate it to be one of the most common and persuasive. On one hand, the government will interpret what is “fair” to suit their own agenda and special interests. This means “fair trade” doesn’t work in practice. On the other hand, morality is objective. We can recognize when something is unethical and act to stop it. There are examples of countries acting to do the right thing, even in despite of the agendas. But in any case, in principle, upholding fair trade is the right thing to do, no matter if in practice it is hard.
Bonus: Possible Resolution Critique
As a negative, you could potentially exploit the ambiguity in the meaning of the phrase “fair trade” and critique the resolution by arguing that “fair trade” is the same thing as “free trade.” Basically, as this argument goes, trade is fair when it is free. Free-ness is the criterion to achieving fair-ness. You could do this by using any of the following standards: liberty, freedom, prosperity, quality of life, standard of living, etc. The debate would rest on discussion over what makes a system “fair.” If you have the standard of liberty, for example, you could say that the upholding of liberty is what makes a trade system “fair.” Since free trade fundamentally (you would say) upholds liberty, it is fundamentally fair. Or suppose you choose the standard of prosperity. You could say that whatever increases our prosperity is “fair.” Since free trade increases prosperity, it is also fair. And so on with the other standards.
The impact of the critique is this. The resolution asks us to compare the value of two concepts that are actually the same. This is equivalent to saying: “homo sapiens are more valuable than humans” or “twelve is more valuable than a dozen”. Thus, the resolution is fundamentally flawed because it forces debaters to choose between values that are actually the same.
Resources to Explore
http://economics.mit.edu/files/6613
http://foreignpolicy.com/2016/05/08/did-china-trade-cost-the-united-states-2-4-million-jobs/
https://www.fairtrade.org.uk/What-is-Fairtrade
http://www.fff.org/explore-freedom/article/the-misplaced-fear-of-monopoly
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=648764 http://journalistsresource.org/studies/economics/trade-impacts-american-jobs-research-roundup https://www.bloomberg.com/view/articles/2016-01-26/free-trade-with-china-wasn-t-such-a-great-idea
http://www.heritage.org/research/reports/2004/05/why-america-needs-to-support-free-trade
http://www.cato.org/publications/commentary/truth-about-trade
https://www.wsj.com/articles/the-truth-about-the-china-trade-shock-1491168339?mod=e2tw
http://www.barrons.com/articles/donald-trumps-worstidea-trade-barriers-1481953007
http://www.heritage.org/research/reports/2013/04/tariff-reform-needed-to-boost-the-us-economy
http://www.heritage.org/research/reports/2015/10/freedom-to-trade-a-guide-for-policymakers
http://www.rand.org/blog/2016/11/if-not-free-trade-then-what.html
http://www.chinausfocus.com/finance-economy/why-americans-shouldnt-be-concerned-with-a-china-trade-deficit/ https://www.americanprogress.org/issues/green/news/2012/05/16/11592/5-myths-and-realities-about-u-s-china-solar-trade-competition/
https://www.theguardian.com/technology/2012/mar/30/apple-factories-china-foxconn-audit
https://www.aei.org/publication/protection-racket/
The Wealth of Nations by Adam Smith
Economic Sophisms by Frederic Bastiat
The World is Flat by Thomas Friedman
Disposable People by Kevin Bales
Profit Over People by Noam Chomsky
The Case Against Free Trade by Atwood, Choate, Greider, Nader, and Philips
Keep up with current events related to US trade policy under the Trump Administration (duh).
This article was an interesting read, but I’m really not convinced that this resolution MUST be approached from a policy perspective. All of the implications discussed here (prosperity, worker abuse, etc.) are directly tied to philosophical principles and, from my point of view, can be safely discussed in that realm without needing to debate policy. This resolution really turns into a debate about the morality of economic freedom versus regulation and where the line should be drawn philosophically. Thanks for the good read!