Fairness in International Trade and Investment: North American Perspectives

Journal of Business Ethics (2009) 84:405425 Springer 2009 DOI 10.1007/s10551-009-0206-x

Fairness in International Trade and Investment: North American Perspectives

Frederick Bird Thomas Vance Peter Woolstencroft

ABSTRACT. This article reviews the practices and differing sets of attitudes North Americans have taken with respect to fairness in international trade and proposes a set of common considerations for ongoing debates about these matters. After reviewing the asymmetrical relations between Canada, the United States, and Mexico and the impact of multilateral trade agreements on bilateral trade between these countries, the article looks at four typical normative views with respect to trade held by North Americans. These views variously emphasize concerns for protectionism, liberal fair play, distributive justice, and dissent in the name of the environment or the working classes. Acknowledging that the debates over what is fair are not likely to be easily resolved, we call for open political processes that allow these debates to proceed, and we identify five common points of reference that might usefully inform these debates. These comprise (1) respect for flexibility, (2) the importance of institutions, (3) greater attention to the commutative justice principles for fair exchanges and corresponding guarantees so that all countries possess basic power to bargain on their own behalf, (4) the need to find fitting balance between local, national, regional, and international trade, and (5) more concern for the ways false pricing and abusive transfer pricing distort international trading relations.

KEY WORDS: North America, WTO, NAFTA, asymmetrical dependency, fairness, protectionism, fair play, procedural justice, distributive justice, commutative justice, transfer pricing

Introduction

North Americans have adopted a number of different views with respect to what they consider fair in relation to international trade and investment. These differences reect the distinctly different histories of the United States, Canada, and Mexico; the varied

roles that international trade plays in these countries; markedly different social and economic positions of groups within these countries; and varied political and economic interests. Within each country, typically different positions regarding fairness in international trade have been taken by small and large businesses, farming groups, trade unions, consumers, and different regions. In spite of these differences, Canada, Mexico, and the United States have joined together in the North American Free Trade Agreement (NAFTA), which has been both widely...