The Fair Trade Challenge to Embedded Liberalism

Abstract

The embedded liberalism thesis, a major component of the trade policy literature in political science, argues that governments can build support for free trade by compensating economically those hurt by trade, usually with welfare or education policies. This strategy depends, though, on opposition to trade being driven by economic factors, such as job or income loss because of increased competition. The current fair trade movement raises many non-economic criticisms of trade such as concerns about the environment and labor standards but many scholars dismiss these concerns as traditional protectionism in disguise. This article argues, instead, that for many these concerns are sincere and that this presents a growing challenge to the compromise of embedded liberalism. The article demonstrates this by examining survey data in the United States and showing that those who support fair trade tend to have characteristics that are opposite those who support economic protection.