Should labor practices in another country be a relevant consideration in international trade? Why or why not?
Domestic labor practices must be considered in international trade. This is due to the lack of activism by social and labor advocates, which has increased imports in products and services from countries that do not enforce adequate labor standards. By considering such practices, it becomes easier to have labor restrictions, which would eliminate unfavorable working conditions and low wages (McGovern, 2018, p.1) . Low labor costs in countries that practice adverse labor practices directly influence their ability to produce cheap products and services in international trade, thus creating unfair competitiveness. The trade would, therefore, be deemed unmerited when compared to other global players who follow the due process of labor practices. Considering the domestic labor practices of another country in international trade is equally a matter of moral obligation by the global players to ensure that the rights of the minority are protected (McGovern, 2018, p.1) . It is one step closer to ensuring, for instance, that the rights and freedoms of minors are protected and that they are allowed to live their lives freely as children, and that they gain an adequate education.
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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?
In protecting the rights of the minority in cases of unfair labor practices, the government can exercise the international floor price for producers. By setting the international floor price at the standard for trade price, the government will be better equipped to ensure that the producer complies with the standard costs. By following the set standards, every producer will pledge that no child or adult experienced slave labor in the production process (Geringer, Ball, Minor & McNett, 2016 p.147) . On the other hand, the producers will equally undergo a scrutiny test in which the authenticity of the pledge will be proven. The implication of this option is that the businesses that comply with the standards will be cleared for trading, while those that do not comply with the set criteria will be disqualified from conducting trade. The government, in this case, will have the authority of banning the products that do not meet the standards from the market (Picciotto, 2017, p.183) . Additionally, consumers will be able to boycott the products once they are gazetted.
How would international trade theorists view the Fair Trade movement?
Fair Trade was developed and is supported by individuals who believe that there exists inherent flaws in the trading system and capitalist system around the world. Fair Trade International is one of the four trade labeling organizations developed by FINE. According to trade theorists, Fair Trade is a market-reactive system which seeks to abolish global inhumane acts in the workplace (Geringer, Ball, Minor & McNett, 2016 p.147) . These acts range from poor working environments, child labor, unhealthy working conditions, and low wages. Trade theorists would therefore not be readily inclined to view Fair Trade as a mechanism to influence trade since it does not control the prices of products at any level. Instead, it only facilitates trade in instances where the producers, at the local level, communicate and work closely with the buyer to arrange a trade agreement. This agreement is achieved under the agreed Fair Trade stipulations. Rather than work towards controlling trade and the flow of products and finances in the market, the Fair Trade movement strives to provide market access to the otherwise sidelined producers (Geringer, Ball, Minor & McNett, 2016 p.147) . It does so by connecting them with the customers on international trade platforms, thus limiting access to fewer intermediaries.
References
Geringer, J. M., Ball, D. A., Minor, M. S., & McNett, J. M. (2016). International business. New York, NY: McGraw-Hill Education.
McGovern, E. (2018). International trade regulation (Vol. 1). Globefield Press.
Picciotto, S. (2017). Rights, responsibilities and regulation of international business. In Globalization and International Investment (pp. 177-198). Routledge.
