International Labour and Environmental Standards Agreements: Is This Fair Trade?

Abstract

Labour and environmental standards agreements are two contentious proposals that have contributed to the failure of the WTO to launch a new round of trade liberalisation discussions and have prevented the US President from obtaining fast‐track negotiating authority. Proponents of the agreements have been able to win substantial political support by arguing that standardised rules on labour practices and environmental regulations is the only way to assure that international trade remains fair. Although there are widespread demands for ‘fair trade,’ there remains a lack of understanding as to what fairness means exactly. Recently, a comprehensive catalogue of fairness principles was presented by Suranovic (2000). This paper will analyse the proposals for labour and environmental standards with respect to these fairness principles in order to characterise how fairness is used by supporters of these policies. The paper will also show that by using different fairness principles, opponents of these policies can argue that these same policies are unfair. The fact that reasonable notions of fairness can be applied by both opponents and proponents of these agreements highlights difficulties with fairness, per se, as a useful guide to policy. The paper uses this contentious issue to highlight the conceptual difficulties of proposals for fair trade.