Sovereign Lending and International Fair Trade

CRISTIAN DIMITRIU

Salzburg

Workshop; Workshop in philosophy and poverty: Human dignity and poverty; 2017

Center for Ethics and Poverty Research

Abstract.Iargue that one of the most important reasons why international tradehas been unfair is that weaker parties in trading negotiations havebeen illegitimately forcedto accept terms of trade that they would not otherwise accept undernormal circumstances, and these terms of trade have been harmful forthem. Odious debts are at the center of this kind of injustice.Odious debts are debts that are not binding for the citizens of acountry, as they were incurred by illegitimate rulers in the name ofall the citizens, but used for private purposes, such as personalbenefit, or to oppress the population. Despite the fact that thesedebts are not binding?that is, that they should not berepaid?creditor countries have coerced debtor countries to repaythem and, more importantly for the purposes of this article, theyhave taken advantage of the fact that countries are burdened withthese debts by tailoring trade agreements in their favor. They havedone so by telling debtor countries that, unless they trade underterms that creditor countries want; non-binding (i.e. odious) debtswill be enforced. The resulting state of affairs is not simply aconvenientone for creditor countries and an inconvenient one for debtorcountries. It is also an immoral one.