Whether coming from a news channel or a classroom, most people have heard the words “Fair Trade” at some point in their lives. As a consumer of imported goods, it is important to understand what this term means and how it came about. Learning the key principles and political factors involved will help gain a better grasp on this topic. Likewise, appreciating the concept of Fair Trade certifications will give more insight into the definition of Fair Trade and its importance. It will also help to make more sound purchasing decisions.
What is Fair Trade?
This concept is exactly what it sounds like. Fair Trade is a market-based, social movement to help achieve fairness in the trading community. It specifically addresses issues with developing countries when exporting their goods to developed countries. This approach allows quality trading conditions and encourages sustainability by ensuring producing countries are paid a fair amount and the goods being traded meet greater social and environmental standards. Some goods that are focused on are products such as: handcrafts, coffee, tea, cocoa, sugar, honey, fresh fruit, chocolate, wine, cotton, flowers, and gold. This new approach to international trading is based on clear communication, transparency, and respect.
Brief History of Fair Trade
The start of the Fair Trade initiative was brought about by religious groups and politically based non-governmental organizations (NGO) in the 1940s and 1950s. Handcrafts were the first goods to be bought from impoverished countries. In 1946, Edna Ruth Byler imported needlecrafts from struggling women in Puerto Rico and sold them throughout Europe. Ten Thousand Villages and SERRV International followed suit and formed the first Fair Trade Organizations (FTO), starting supply chains in developing countries. Most of today's trade organizations actually began in the 20th century as missionary and humanitarian projects or as political and economic statements.
In 1965 the first Alternative Trading Organization was formed and British NGO Oxfam started a program called “Helping-by-Selling.” This program was put in place to sell imported handcrafts from developing countries in their stores. Four years later in the Netherlands, the first World-shop was opened and almost exclusively sold only goods that fell under the Fair Trade terms and were produced in underdeveloped countries. The 1970s and 1980s saw a great increase in the development of Federal Trade Organizations. Most of these were in response to the struggling of developing nations and the increased awareness of the gap between the poor and the rich. In 1972, Ten Thousand Villages created the first Fair Trade retail outlet in North America.
With the rise of Fair Trade initiatives came the desire to sell Fair Trade products in stores that consumers would normally shop in instead of exclusively World-shops. In 1988 the first Fair Trade certified label, “Max Havelaar,” was developed to allow consumers to detect Fair Trade products in their stores and enable people to track the origin of the goods. In the coming years, Fair Trade organizations started to pop up everywhere. Today, worldwide Fair Trade retail sales amount to more than $2.5 billion.
What Are the Key Principles of Fair Trade?
There are several important aspects to Fair Trade and what it stands for. Fair Trade creates opportunities for financially disadvantaged producers of goods and promotes gender equality. It guarantees accountability and transparency, ensuring a fair price is being presented. This makes sure that the costs to produce the products are covered, and also that the producers themselves are being paid fairly. Lastly, Fair Trade promotes a better work atmosphere. Places of employment are healthier and safer, and higher quality environmental practices are encouraged.
Fair Trade Certification
As mentioned earlier, Max Havaelaar was the first certification initiative. These certifications helped Fair Trade to really take off with consumers. A Fair Trade Certification allows consumers to identify which goods meet the standards for environment, labor, and development. In 1997, the Fair Trade Labeling Organization (FLO) was formed. The FLO oversees certification of products and ensures that companies are abiding by labeling rules. To put a Fair Trade label on a product, companies must purchase from certified organizations and farms, endure strict supply chain audits, and pay Fair Trade prices and premiums.
Information on the Politics of Fair Trade
In recent years government started to become involved in Fair Trade. The European Commission made the “Memo on Alternative Trade” in 1994, which announced its support for strengthening Fair Trade in the North and South. Also that year, the Parliament adopted the “Resolution on promoting fairness and solidarity in North South trade” to show its backing of Fair Trade. In 2000, public institutions began purchasing certified coffee and tea.
French Parliament is another government that became involved in Fair Trade initiatives. Antoine Herth, a Parliament member, created a report in 2005 called “Forty Proposals to Sustain the Development of Fair Trade.” That same year, a law was put in place addressing the establishment of a commission to acknowledge Fair Trade organizations. Although not yet enforced, in 2006 the Italian government began discussing how to introduce Parliament to a law concerning Fair Trade. In 2007 Groningen, a Dutch province, was sued by a coffee supplier for requiring coffee producers to be Fair Trade certified. In a very significant event, Groningen won. Now, government institutions have the freedom to demand that their suppliers of coffee follow the Fair Trade criteria to ensure a contribution to fighting poverty is made through daily cups of coffee.
In the United States during the early 1990s, the New Democrats began pushing policies of Fair Trade. In 1994 the North American Free Trade Agreement (NAFTA) was formed and signed by the United States, Canadian, and Mexican governments. The agreement provided unrestrained trade between these countries. Since its formation, prerequisites have been developed to ward off some of the downfalls of NAFTA, including the fear that US manufacturing would be destroyed by other countries' environmental standards and low wages.
Nonprofit organization, Fair Trade USA
Fair Trade Labeling Organization
Oxfam launches fair trade coffee chain
University of Massachusetts Lowell: Documentaries on Fair Trade
Western Connecticut State University: Fair Trade shopping online
University of Scranton: Fair Trade defined
University of Washington: Information on Fair Trade and suppliers
University of California, Santa Cruz offers Fair Trade coffee in dining halls
University of California, San Diego signs strongest fair trade policy in the nation
Siena College is Fair Trade certified
International Trade Administration
Resources from Green America on Fair Trade
Walden University: Video on obtaining Fair Trade certification
Resource for Fair Trade stores
Catholic Relief Services: Official international humanitarian agency of the US Catholic community
