Introduction

Many trade scholars – both lawyers and economists – view the increasing preoccupation with “fair trade” as the most fundamental intellectual challenge or threat to the liberal trading order that has arisen in recent decades. This refers to the proliferation of arguments that free trade is only “fair” where one's trading partners adopt certain kinds of domestic policies and/or refrain from others (whether the policy area be competition law, intellectual property rights, regulation of services, environment, or labor standards), although concerns that the practices of one's foreign competitors are unfairly rigging the marketplace have a long genesis in international trade law, as reflected particularly in antidumping and countervailing duty laws.

The fair-trade claims that are currently generating the most debate in the trade community are those related to environmental and labor standards. The Economist magazine recently noted that “labor standards and environmental issues are playing an increasing role in international trade disputes” and are likely to be the central area of conflict between developed and developing countries in the next decade.

Most free traders see recent demands that trade be linked to compliance with environmental and labor standards as motivated by the desire to protect jobs at home against increased competition from the Third World and view many fair traders as charlatans (protectionists masquerading as ethicists).