International Trade Theory and Policy
by Steven M. Suranovic

Trade 125-9

Privacy Fairness

Privacy fairness is, in a sense, a neutral application of the golden-rule.Imagine the golden-rule in the case in which others have not done anything to affect you. The “do unto others” rule would require that you not do anything to affect them either.  In other words, leave them alone.  Alternatively, imagine whether you would like it if others took actions to restrict your freedom and privacy.  If you would prefer them not to do so, then you should take no action to restrict the freedom and privacy of others.  Privacy fairness requires that actions taken by an individual, that solely or primarily affects oneself, should not be prevented. Government actions that restrict one’s individual privacy then, are considered unfair.

An example of privacy unfairness involves the age-old and mostly dismantled laws in the US concerning marriage and sex.  It was common at one time for states to prohibit marriages between whites and blacks, and to prohibit homosexual relations.  Most people today consider such laws unjust and unfair because they violate a presumed right to privacy.    Since these actions should not have any major impact upon the lives of others, individuals need not be protected from themselves. Similar logic has been used to support abortion laws and drug legalization.

In an international trade context, privacy fairness arises primarily as a concern about national sovereignty.  Sovereignty means the “right” of a nation to determine its own laws and policies, especially those that primarily affect its own domestic residents. Thus, countries generally believe that each independent nation should choose its own tax rates, its own regulations, its own domestic affairs.   Sovereignty is abridged when another country uses its influence to force changes in another countries laws and policies.

Critics of globalization have sometimes argued that the WTO acts in a way that reduces the sovereignty of individual nations.  Thus, when the US lost a dispute at the WTO in the mid 1990s concerning gasoline imports from Venezuela, the US responded by changing it’s Clean Air Act in a way that made it consistent with the WTO agreement. For environmentalists in the US, this seemed a clear case of foreign entities (i.e. the WTO) having an influence over US law, which thereby implies a restriction of US sovereignty.

Similarly, concerns about a loss of sovereignty have been raised by LDC countries with regard to labor and environmental standards.  In the US and Europe, many groups are pressuring poor countries to raise their labor and environmental standards to be more in line with the standards in developed countries.   The governments in the poor countries, however, tend to feel that undue pressure to influence their own domestic affairs is being brought to bear by the developed countries.   In the same way they feel like their sovereignty will potentially be abridged.

International Trade Theory and Policy - Chapter 125-9: Last Updated on 8/2/01