Kurjanska, Malgorzata, and Mathias Risse. "Fairness, Export Subsidies, and the Fair Trade Movement." KSG Faculty Research Working Paper Series RWP06-023, June 2006.
Subsidies and the Fair Trade movement are two topics central to reflection on fairness in trade. A common view is that support for Fair Trade is called for, whereas agricultural subsidies are unjustifiable. Yet there are curious similarities between these scenarios. On the face of it, both subsidies and Fair Trade concern producers who are to be supported beyond what the market would sustain. In both cases arguments on behalf of such producers can take on two forms. First, such arguments might be presented as claims of producers. In the case of agricultural subsidies, farmers in developed countries assert claims against their fellow citizens, who ought to accept redistributive measures to keep them in business. In the case of Fair Trade, the claim can be made by farmers in developing nations against consumers, who ought to pay higher prices to keep them in business (under conditions deemed acceptable). Second, arguments to keep producers in business might be presented as the prerogative of both groups: even if farmers in developed countries did not have a claim to be kept in business, these countries would have the right to take measures to do so because they value their products. Similarly, in the case of Fair Trade, even if farmers in developing nations had no claim against consumers, it is a consumer prerogative to pay more to keep them in business. In light of such similarities (and despite important differences), the goal of this study is to analyze arguments for and against subsidies and the Fair Trade movement side by side. The result is what we take to be a more differentiated picture of the moral case for and against both than captured by the common view mentioned above.