Fairness In Global Trading System
Fairness in global trading system is determined by two vital factors, which need to be considered if all the nations are to be treated equally. Distributive equity and extending equal opportunities are the two aspects, which need to be paid heed to. The write up below encompasses the same.
The following two criteria have been recognized for determining fairness in global trading system.
- Distributive equity
- Equal Opportunities or "Equality of opportunity".
(I) Distributive equity:The global trading system should not be regarded as a tool for transferring income; rather it should be looked upon as a means of enhancing mutual advantages pertaining to commercial relationships between nations. Trade has served as a means of helping the poor nations to develop.
Therefore, the global trading system ought to keep in mind that fairness should be maintained so that each nation is benefited in an optimum manner in accordance with what one deserves to. One factor, which is often debated, is that the distributive equity factor ought to help in the production growth of poor nations by facilitating sale of these manufactured goods in the domestic market as well as in the foreign markets. Distributive equity is regarded as "promotion of development".
However, it has been noticed that there exists few countries, which are still biased about trade barriers. Experts are of the opinion that the developing nations may benefit if "progressive reduction" is made pertaining to trade barriers of the developed countries.
(II) Equal Opportunities:Equal opportunities as well as distributive equity are closely related because there has to be some degree of flexibility in order that distributive equity is allowed. In this context, it may be said that efficiency may not be a (full fledged) parameter to ascertain fairness in global trading system.
"Equality of opportunity", is said to be realized under the following circumstances:
- The norms backing market access are consistent.
- Fairness is said to be maintained when procedural justice pertaining to trading nations are maintained in matters related to settlement of disputes.
- When MFN or Most favored Nation treatment is adhered to by the nations.
- Mutual dependence among trading nations pertaining to trade barrier reduction.
- When there is removal of biases in the initial stages of trading.
- By the usage of measures related to trade-remedy.