Ethics and Trade Policy

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Ethics and Trade Policy
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What is ethics?

• Ethics refers to standards of behavior that
  instruct us how we ought to interpret or act in
  various situations.
• In this course, ethics means an evaluation of the
  standards of behavior and policy that we would
  like to observe in the real-world cases we
  examine.

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What is NOT ethics?

• Feelings
• Religion
• Law
• Cultural norms
• Science

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Do we live in a just world?

• Income per capita in France is roughly 40 times
  income per capita in Congo.
• Income per capita in Korea was about the same as
  income per capita in Ghana in 1950. Today,
  Koreas per capita income is about 10 times
  higher.
• Chinas per capita income has increased by about
  10 a year for the last two decades. Still, its
  income is only about 1/6 of U.S. per capita
  income.
• Is any of this fair/just?
• Is it still unjust if nobody is denied his/her
  basic needs?

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Poverty and Inequality

• Poverty
• Relative and absolute poverty
• The number of poor people, and their share in the
  population
• Inequality
• Measuring inequality
• Inequality within countries
• Inequality between countries
• World inequality

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Fairness

• Procedural fairness
• Fairness in outcomes (consequentialism)
• Equality of treatment is equitable only among
  equals. A weakling cannot carry the burden of a
  giant.
• Legitimacy vs. Equity
• Intentions vs. Results

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Utilitarianism

• The morality of any action is determined by its
  effect on total utility (the sum of individual
  utilities).
• In this sense, trade policy can only be unfair if
  it harms someone without benefiting someone else
  more.
• Nozicks Utility Monster

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Rawls

• Rawls, 1971, A Theory of Justice
• A just world is a world of internally just
  states.
• Differences in incomes originate from
  different religious, philosophical, and moral
  traditions that support their political and
  social institutions, as well as in the
  industriousness and cooperative talents of its
  members
• Rawls, 2001, The Law of the Peoples

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Rawls

• Rawls therefore proposes a limited duty of
  assistance to what he called burdened
  societies.
• Once burdened societies are able to manage their
  own affairs, further assistance is not morally
  required, even though the well-ordered society
  may still be relatively poor.

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Sen

• Capabilities needed for a life of dignity
• The positive freedom to choose
• Ex. voting.
• Sens 2001 Development as Freedom
• Cosmopolitanism vs. Nationalism

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Nussbaum

• .acknowledge the fact that the international
  economic system, and the activities of
  multinational corporations, creates severe,
  disproportionate burdens for poorer nations,
  which cannot solve their problems by wise
  internal policies alone.
• Nussbaum, 2006, Frontiers of Justice

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Nussbaum

• Nussbaum (2006) maintains that All institutions
  and (most) individuals should focus on the
  problems of the disadvantaged in each nation and
  regions.Prosperous nations have a responsibility
  to give a substantial portion of their GDP to
  poorer nations.

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Pogge

• Pogge (2002) accepts the importance of national
  factors in the determination of global poverty,
  but calls sole reliance on them to explain
  poverty explanatory nationalism.
• He argues that the global institutional order is
  directly responsible for the persistence and
  prevalence of poverty.
• Pogge, 2002. World Poverty and Human Rights

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Fairness in the World Trade Organization

• The Ministerial Conference decisions by
  consensus
• The problem of technical expertise and
  representation
• Informal negotiations
• MFN status
• National Treatment rules
• Reciprocity
• Special and differential treatment
• most of these provisions are non-binding
• Dispute Settlement Mechanism

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• httpwww2.hawaii.edu/noy/362misc/ethicalframework
  .pdf

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