1. Should labor practices in another country be a relevant consideration in international trade? Why or why not?
Yes, labor practices in another country should be relevant for consideration in international trade. The reason for concern is labor and social advocates has increased imports from countries in which labor standards are apparently not enforced at an adequately high level.
It’s important to have labor restrictions and eliminate unfavorable wages and poor working conditions in the developed importing countries. The low labor cost in developing countries is the result of poorly protected core labor rights. The trade is based on low wages and is sometimes seen as unmerited or illegal. The International Labour Organization estimates that 215 million children ages 5-17 are engaged in child labor (ILO, Accelerating action against child labour, 2010). An estimated 12 percent of children in India ages 5-14 are engaged in child labor activities, including carpet production (UNICEF, State of the World’s Children 2010). Approximately six out of ten slaves in the world are bonded laborers in South Asia (Siddharth Kara, Sex Trafficking: Inside the Business of Modern Slavery, 2008)
The United States has a strong concern to up hold international labor standards. I think it’s a moral obligation to foreign workers as well as concern that low labor standards in other countries make unfair competition for US. Also I would think the majority of the US citizens feel we should not allow products to be imported when they have been made under conditions in infringement of international labor standards.
2.With regard to trade products such as cocoa, what options are available to governments, businesses and consumers for dealing with practices such as child labor or slave labor in other countries? What are the implications associated with each of these options?
With regard to trade products such as cocoa, the government options are to set an international floor price of the product at the standard fair trade price. The set price will make the producers comply with the standard costs and which will be beneficial to the consumer at the end. Businesses will need to follow the standards and pledge that no child will experience slave labor in their work and production of products. If Business does not follow the practices we can boycott the products. Business should be investigated and held accountable. For the consumer to only purchase fair trade products until the item becomes a fair trade product. As consumers we can look at labels, be more aware of fair trade products. We can talk with our local grocery companies, coffee shops, and look for the fair trade products.
3. How would international trade theorists view the fair-trade movement?
Fair trade was supported by people who believed that there were inherent flaws in the capitalistic system and trading system around the world (Handmade Expressions) There are four fair trade labeling organizations developed by FINE, informal association: Fair trade International, World Trade Org, Network of European World shops and European Fair Trade Association (Fair Trade International site).
Fair trade is a market reactive system that wants to abolish global inhumane acts from child labor, poor working environments, low wages, and healthy working conditions. Fair Trade does not control the prices at a local level the producers need to work and communicate with the buyers to arrange a trade under agreed Fair trade stipulations. The movement intends to provide market access to otherwise marginalized producers, connecting them to customers and allowing access with fewer middlemen.
Goodweave Retrieved 2009-2012, from (Siddharth Kara, Sex Trafficking: Inside the Business of Modern Slavery, 2008) (ILO, Accelerating action against child labour, 2010) http://goodweave.org/child_labor_campaign/facts
Handmade Expressions Retrieved 2011 from http://www.handmadeexpressions.net/pages/fair-trade-controversies-and-theories
Fairtrade International Retrieved 2011from http://www.fairtrade.net/about_us.html