Can There Be Fair Trade?
You read and hear a lot today about trade wars, tariffs and fair trade. Can you ever truly have fair trade between two countries or a block of countries? This has been a challenge for decades. What one country thinks is fair another thinks is unfair. Also, there is tremendous pressure within each country to protect its own industries. How can you expect a country to negotiate a “fair” trade deal when in fact their main goal is to support internal companies or workers over any other? It would be rare for a politician to survive politically if he or she negotiated a trade deal that was in fact fair to both sides but cost a lot of workers in a particular industry in their country.
But if you don’t have negotiated trade deals then you end up with purely protectionist policies that will be worse off for a country then a fair trade agreement. In the US every President tries to protect workers. However, a minimum wage job in the US is a very good income in some other countries. Also, workers protection and safety issues in the US add cost to our products. We are never going to be able to compete with China the rest of Asia and India on labor cost. That is just a reality we have to deal with.
No matter how much people say they want to support products from their own country, the vast majority will buy on price. That is why Wal-Mart is such a behemoth. It offers cheap goods made overseas with cheap labor.
The unions in the US want to put pressure on our trade negotiators level the playing field on labor cost but that is a pipe dream.
I don’t believe you will ever be able to have true fair trade treaties. The best you can do is to minimize the negative aspects and realize that any negotiated pack is better than pure protectionism and tariffs.
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