Can anyone explain (in layman's terms) why free trade is bad, and the difference between free trade and fair trade?
Free trade is good. Genuine free trade doesn't require any so-called "free trade" treaties between governments: all it requires is a government getting rid of all of its restrictions inhibiting trade. If other governments maintain their restrictions then that will hurt their own subject populations. The so-called "free trade" treaties like NAFTA are multi-thousand-page laws which regulate trade at all levels.
"Fair trade" sounds like socialist terminology involving the government regulating the economy for its own benefit (e.g., with duties, tariffs, more control, etc.) and the benefit of its insider-connected interests (e.g., certain industries, etc.).
Below are some excellent articles concerning the nature of government, of liberty, and the free-market production of defense:
"The Anatomy of the State," Prof. Murray N. Rothbard, Rampart Journal of Individualist Thought, Vol. 1, No. 2 (Summer 1965), pp. 1-24. Reprinted in a collection of some of Rothbard's articles, Egalitarianism as a Revolt Against Nature and Other Essays (Washington, D.C.: Libertarian Review Press, 1974) http://www.mises.org/easaran/chap3.asphttp://www.mises.org/books/egalitarianism.pdf
"Defense Services on the Free Market," Prof. Murray N. Rothbard, Chapter 1 from Power and Market: Government and the Economy (Kansas City: Sheed Andrews and McMeel, Inc., 1977; originally published 1970) http://www.geocities.com/vonchloride/marketdefense.htmlhttp://web.archive.org/web/20040720094416/http://www.mises.org/rothbard/power&market.pdf
"The Private Production of Defense," Prof. Hans-Hermann Hoppe, Journal of Libertarian Studies, Vol. 14, No. 1 (Winter 1998-1999), pp. 27-52 http://www.mises.net/journals/jls/14_1/14_1_2.pdfhttp://www.mises.org/journals/scholar/Hoppe.pdf
"Fallacies of the Public Goods Theory and the Production of Security," Prof. Hans-Hermann Hoppe, Journal of Libertarian Studies, Vol. 9, No. 1 (Winter 1989), pp. 27-46 http://www.mises.net/journals/jls/9_1/9_1_2.pdf
"Police, Courts, and Laws--On the Market," Chapter 29 from The Machinery of Freedom: Guide to a Radical Capitalism, Prof. David D. Friedman (La Salle, Illinois: Open Court Publishing Co., 1989; originally published 1971) http://www.daviddfriedman.com/Libertarian/Machinery_of_Freedom/MofF_Chapter_29.html
Concerning the ethics of human rights, the below book is the best book on the subject:
The Ethics of Liberty, Prof. Murray N. Rothbard (New York, New York: New York University Press, 1998; originally published 1982) http://www.mises.org/rothbard/ethics/ethics.asp
If one desires a solid grounding in economics then one can do no better than with the below texts:
Economic Science and the Austrian Method, Prof. Hans-Hermann Hoppe (Auburn, Alabama: The Ludwig von Mises Institute, 1995) http://www.mises.org/esandtam.asp
The small book Economic Science and the Austrian Method by Prof. Hans-Hermann Hoppe doesn't get into political theory, but only concerns the methodological basis of economics (i.e., the epistemology of economics). I would recommend that everyone read this short book *first* if they're at all interested in economics. There exists much confusion as to what economics is and what it is not. This book is truly great in elucidating the nature of what economics is and and isn't. If one were to read no other texts on economics, then this ought to be the one economic text that one reads. Plus it doesn't take all that long to read it.
"Toward a Reconstruction of Utility and Welfare Economics," Prof. Murray N. Rothbard, On Freedom and Free Enterprise: The Economics of Free Enterprise, Mary Sennholz, editor (Princeton, New Jersey: D. Van Nostrand, 1956), pp. 224-262. Reprinted in The Logic of Action One: Method, Money, and the Austrian School, Murray N. Rothbard (London, England: Edward Elgar, 1997), pp. 211-255 http://www.mises.org/rothbard/toward.pdf
Man, Economy, and State, Prof. Murray N. Rothbard (Auburn, Alabama: The Ludwig von Mises Institute, second edition, 2004; originally published 1962) http://www.mises.org/rothbard/mes.asp
Power and Market: Government and the Economy, Prof. Murray N. Rothbard (Kansas City: Sheed Andrews and McMeel, Inc., 1977; originally published 1970) http://web.archive.org/web/20040720094416/http://www.mises.org/rothbard/power&market.pdf
These texts ought to be read in the order listed above. I would also add to the above list the below book:
America's Great Depression, Prof. Murray N. Rothbard (Auburn, Alabama: The Ludwig von Mises Institute, fifth edition, 2000; originally published 1963) http://www.mises.org/rothbard/agd.pdf
The above book concerns how the governments create depressions (i.e., recessions) through credit expansion (i.e., fractional-reserve banking and/or fiat money).