History of Fair Trade
The fair trade concept can be traced back to the beginning of last century, when religious groups and politically-oriented NGOs decided to help poor communities around the world by incorporating them into the global trading system. This concept took a formal shape in Europe in the 1960s, gaining international recognition when the slogan at the time, “Trade not Aid”, was adopted by the UNCTAD (United Nations Conference on Trade and Development) to promote fair trade relations with the developing world.
In the beginning, fair trade was almost exclusively about handicrafts such as jute bags. During the 1980s, however, these products lost their innovation and appeal, and fair trade organizations decided to move towards agricultural products. This is because many countries depended on the export of three or less key agricultural products, many of which were facing plummeting prices. Although in 1992 80% of the fair traded goods were still handcrafts, by 2002 food products comprised almost 70% of the fair trade market. (Nicholls, A. & Opal,C.(2004).Fair Trade: Market-Driven Ethical Consumption. London: Sage Publications.)
Another challenge that fair trade faced during the 1980s was the reduction in demand of the products within the “World Shops”, where products were usually found. Non-profit organizations and NGOs started an informal labeling process, with the hopes that they could sell fairly traded goods in mainstream shops and retail locations, and still carry the humanitarian appeal with them. This solution proved successful, and in 1997, fifteen European countries, the US, Canada, Japan, Australia and New Zealand decided to converge all of their labeling organizations under one umbrella called FLO International (Fairtrade Labeling Organizations International).
In 1989 the IFAT (International Fair Trade Association, now known as the World Fair Trade Organization) was created to unite producers, wholesalers, retailers and consumers involved in fair trade in Asia, Africa, Europe and Latin America. This provided a networking organization for the exchange of ideas and for the promotion of fair trade commerce. As of today, all members of IFAT/WFTO can display a new mark to be identified with fair trade worldwide.
Today, the fair trade market is still mostly developed in Europe. According to FLO International:
“In 2005, UNCTAD Fairtrade sales amounted to approximately €1.1 billion worldwide, a 37 % year-to-year increase over 2004. As per December 2005, 508 Certified Producer Organizations in 58 developing countries were Fairtrade Certified. That represents more than one million producers and five million people, including dependents, benefiting directly from Fairtrade.”
In 2006, the global market for fair trade certified products was $2.17 billion. This number is much larger if you include all the crafts and products that are not certified. These numbers were exposed by the World Fair Trade Organization. There was an amazing 47% increase in 2007, with WFTO members’ sales amounting to over $3.62 billion. You can read more information about these global figures in the Fair Trade Labeling International’s annual reports.
Nevertheless, it is gaining popularity in North America, as consumers begin to ask where their products come from, what they are made of, and if their purchases will make a difference in the world. This behavior has been named by some as “social consumerism”, where people look to buy products from ethical companies and want to support good causes. The growing popularity of fair trade gave rise to the creation of Transfair USA (the only certifying organization of fair trade produce and flowers in North America), and the Fair Trade Federation.
The Fair Trade Federation traces its roots to the late 1970s when individual alternative trade organizations began holding yearly conferences for groups working in fair trade. In 1994, the group incorporated formally as the North American Alterative Trade Organization (NAATO); and, the following year, changed its named to the Fair Trade Federation. Since then, FTF has focused on supporting fully committed businesses in order to expand markets for artisans and farmers around the world. (directly quoted from the Fair Trade Federation website). Transfair USA started slightly later, in 1998, and began certifying coffee in 1999. They have since grown to certify bananas, chocolate, flowers and other produce.