Thursday, 9 April 2015

Andrew Charlton: FTFA Review

Andrew Charlton, with the help of Joseph Stiglitz, wrote “Fair Trade for All”, a book that presented many arguments for fair trade policies to be enacted on a global scale. In the book, Andrew Charlton and his co-author revealed many truths about the realities of unfair trade practices, as described in a write-up about the book, which was published in the New York Times in 2006:

“Stiglitz and Charlton show that standard economic assumptions are wrong when it comes to many developing economies. When markets in sub-Saharan Africa and elsewhere are opened, people often can't move easily to new industries where the nation has a comparative advantage. Transportation systems that might get them there are often primitive, housing is inadequate and job training is scarce. 

They're vulnerable in the meantime because safety nets are weak or nonexistent. Most people lack access to credit or insurance because financial institutions are frail, so they're unable to start their own businesses or otherwise take advantage of new opportunities that trade might bring. Many poor countries are already plagued by high unemployment, and job losses in the newly traded sector might just add to it.

Hence, the authors argue, the pace at which poorer nations open their markets to trade should coincide with the development of new institutions — roads, schools, banks and the like — that make such transitions easier and generate real opportunities. 

Since many poor nations can't afford the investments required to build these institutions, rich nations have a responsibility to help.” 

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