What is Fair Trade?

Juan Portillo

<img src='http://cdn.shopify.com/s/files/1/0000/9057/files/About_fair_trade.jpg' alt='' class='protect' /> <a href="#definition">What is the definition of Fair Trade?</a> <a href="#purpose">What is the purpose of Fair Trade?</a> <a href="#history">What is the history of Fair Trade?</a> <a href="#north">What is the history of Fair Trade in North America?</a> Fair trade is market-based approach to alleviating global poverty and promoting sustainability. It aims to educate and empower disadvantaged producers and connect them to a market, so they too can participate in global trade. It encompasses principles such as: • Anti-slave, anti-child labor • Environmentally friendly processes • A respectful relationship between producers and buyers • A fair wage for the producers • A healthy working environment for producers • Gender equality with respects to wages and working conditions • The development of communities for self-sustainability With regards to the “formal definition” of fair trade, it is safe to assume that the most widely used one was created by an informal group comprised of the largest fair trade organizations in the world: FINE. FINE members are: <a href="http://en.wikipedia.org/wiki/Fairtrade_Labelling_Organizations_International" target=_blank>Fairtrade Labelling Organizations International</a>, <a href="http://en.wikipedia.org/wiki/International_Fair_Trade_Association" target=_blank>World Fair Trade Organization</a>, <a href="http://en.wikipedia.org/wiki/Network_of_European_Worldshops" target=_blank>Network of European Worldshops</a>, <a href="http://en.wikipedia.org/wiki/European_Fair_Trade_Association" target=_blank>European Fair Trade Association</a>. They say: <a name="definition"></a>“Fair trade is a trading partnership, based on dialogue, transparency and respect, which seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South. Fair trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.” The <a href="http://www.fairtradefederation.org" target=_blank>Fair Trade Federation</a> says: “Fair Trade is a trading partnership based on dialogue, transparency, and respect. This system of exchange seeks to create greater equity and partnership in the international trading system.” <a name="beyond"></a>Beyond fair wages Fair trade is much more than just setting a price of goods or creating a safe working environment. Here are some of the benefits that fair trade offers producers to help them develop their communities: <ul> <li>Advanced payments or access to credit: wholesalers or retailers who work directly with artisans will pay them in advance for the products. This makes sure the artisans or farmers have money to buy the resources they need to make products or grow crops, and at the same time feed their children, invest in their communities, etc. Small farmers and artisans are also referred to micro-credit companies who will help them get started as well. Either way, it’s a little push that gets farmers and artisans on their feet so they can start making a living.</li> </ul> <ul> <li>Education: many retailers and wholesalers educate the producers they work with. They give them market and fashion information so that artisans can create functional, trendy goods that will sell in North America. They can also educate them so that farmers and artisans improve their business practices or become more efficient.</li> </ul> <ul> <li>Development projects: artisans are given help so that they can develop their communities. Handmade Expressions, for example, is trying to provide health insurance to the artisans, install solar panels for electricity in 2 villages, and giving scholarships for vocational education, among other projects. These projects give the artisans or farmers a basic level of development that allows them to lead a better lifestyle, and facilitates the arrival of aid and trade.</li> </ul> <ul> <li>Opportunities for women and minorities: Fair Trade aims to empower everyone without discrimination. This creates an environment where women and minorities can participate in this alternative trading system. They then become self-sustainable, decision makers in their communities. This is especially important in the crafts industry, where 70% of producers are women (according to the Fair Trade Federation).</li> </ul> <a name="purpose"></a><h2>What is the purpose of Fair Trade?</h2> <img src='http://cdn.shopify.com/s/files/1/0000/9057/files/Globalization_1.jpg?1232642404' alt='' class='protect' /> Fair trade exists to give a chance to small farmers, artisans and workers around the world, so they can also benefit from globalization. This philosophy provides a platform that enables these disadvantaged people to rise above poverty and improve their standard of living. Globalization This term is a favorite amongst economists, scholars and politicians. Yet, we should understand that globalization affects all of us, and connects us to everyone in the world. In essence, globalization implies that the world is becoming smaller and more interconnected. It is applied to many subjects: the economy, communications, politics, trade, technology, information, ethics, language, ecology, and many others. When it comes to Fair Trade, though, it mainly revolves around politics, trade and the global economy. In our side of the world (in North America), globalization has been very kind to us. You wake up on a bed that may be of Swedish design, assembled in Asia. You brush your teeth with a product made in the US, drink coffee that comes from Central America, put on your Chinese made shirt and your Vietnamese made jeans, work on your Japanese made computer, talk on your Korean made cell phone, snack on an African grown chocolate bar, and drive your German car to school or work. At school or university you received Spanish classes from an Argentinean teacher, the person sitting next to you is from India, and you get your food served by someone from Mexico in the cafeteria. If you’re at work, you may have to discuss software issues with your programmer in the Ukraine, and try to convince your client in Australia that she will get her program soon. Indeed, globalization has been very kind to people of developed nations such as the US, Canada, Western Europe and Japan. However, people in less fortunate countries do not fare as well. While globalization has opened the doors for different countries to communicate, share ideas and engage in trade that should ultimately develop the world, in many situations it has also opened the door to exploitation. Many third world countries do not have the resources to compete equally with developed nations. In cases like these, the powerful corporations in these nations set up a factory, a plantation or a mine in the poor countries under the pretense that they will pay the workers a salary (which is better than no salary), pay taxes, and improve the local economy. Even though it is true that the people in the poor countries want a job and opportunities, the ones offered by multinational corporations are far from ideal. What ends up happening is that people are overworked and are not compensated for all the sacrifices they make (their health, their family, their dignity). There is nothing the disadvantaged workers, farmers or miners can do, because they have no access to information, education, resources, credit, or many of the other privileges that the corporations from the developed world have ready access to. It is no one’s fault that this system started, since people were just following the economic theories they knew. However, we are at a point where we realize that this is an unethical way of doing business. That is why people from both developed and developing nations have created the system of Fair Trade. It aims to empower the artisans, farmers and miners with education, access to credit, information about the markets, and communications tools so they can compete in the globalized economy. In the end, Fair Traders hope to create a system where the artisans and farmers become independent and self-sustainable. That is why Fair Trade exists: to create justice, to empower people, to break the poverty cycle, and ultimately so everyone can produce and buy products that are healthy for the people and the planet. <a name="history"></a><h2>History of Fair Trade</h2> <img src='http://cdn.shopify.com/s/files/1/0000/9057/files/History_of_Fair_Trade.jpg' alt='' class='protect' /> 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). <a href="http://www.flo-cert.net/flo-cert/index.php" target=_blank><img src="http://cdn.shopify.com/s/files/1/0000/9057/assets/fairtrade.jpg"alt="" class='protect' /></a> In 1989 the IFAT (International Fair Trade Association, now known as the <a href="http://www.wfto.com/" target=_blank>World Fair Trade Organization</a>) 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. <table class="page-table"> <tr> <td class="center"><a href="http://www.wfto.com/" target=_blank><img src="http://cdn.shopify.com/s/files/1/0000/9057/assets/fmark.jpg"alt="" /></a> <a href="http://www.wfto.com/">Old name: IFAT</a></td> <td class="center"><a href="http://www.wfto.com/" target=_blank> <img src='http://cdn.shopify.com/s/files/1/0000/9057/files/WFTO.gif' alt='' class='protect' /></a> <a href="http://www.wfto.com/">New name: WFTO</a></td> </tr> </table> Today, the fair trade market is still mostly developed in Europe. According to FLO International: “In 2005, <a href="http://www.fairtrade.net/figures.html" target=_blank>UNCTAD Fairtrade sales</a> 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 <a href=”http://www.ifat.org/” target=blank>World Fair Trade Organization</a>. 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 blank>Fair Trade Labeling International’s annual reports</a>. <a name="north"></a>Fair Trade in North America The Fair Trade movement is constantly 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 (FTF) is the trade association that strengthens and promotes North American organizations fully committed to fair trade. The FTF 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, a 501©(3) nonprofit organization, is one of twenty members of Fairtrade Labelling Organizations International (FLO), and the only third-party certifier of Fair Trade products in the United States. They audit transactions between US companies offering Fair Trade Certified™ products and the international suppliers from whom they source. Transfair USA started slightly later than the FTF, in 1998, and began certifying coffee in 1999. They have since grown to certify bananas, chocolate, flowers and other produce.

2008-12-19T13:37:47-06:00

what-is-fair-trade 1327702

2008-12-19T13:37:47-06:00

9057

What is Fair Trade? 2009-09-20T21:41:09-05:00 <img src='http://cdn.shopify.com/s/files/1/0000/9057/files/About_fair_trade.jpg' alt='' class='protect' /> <a href="#definition">What is the definition of Fair Trade?</a> <a href="#purpose">What is the purpose of Fair Trade?</a> <a href="#history">What is the history of Fair Trade?</a> <a href="#north">What is the history of Fair Trade in North America?</a> Fair trade is market-based approach to alleviating global poverty and promoting sustainability. It aims to educate and empower disadvantaged producers and connect them to a market, so they too can participate in global trade. It encompasses principles such as: • Anti-slave, anti-child labor • Environmentally friendly processes • A respectful relationship between producers and buyers • A fair wage for the producers • A healthy working environment for producers • Gender equality with respects to wages and working conditions • The development of communities for self-sustainability With regards to the “formal definition” of fair trade, it is safe to assume that the most widely used one was created by an informal group comprised of the largest fair trade organizations in the world: FINE. FINE members are: <a href="http://en.wikipedia.org/wiki/Fairtrade_Labelling_Organizations_International" target=_blank>Fairtrade Labelling Organizations International</a>, <a href="http://en.wikipedia.org/wiki/International_Fair_Trade_Association" target=_blank>World Fair Trade Organization</a>, <a href="http://en.wikipedia.org/wiki/Network_of_European_Worldshops" target=_blank>Network of European Worldshops</a>, <a href="http://en.wikipedia.org/wiki/European_Fair_Trade_Association" target=_blank>European Fair Trade Association</a>. They say: <a name="definition"></a>"Fair trade is a trading partnership, based on dialogue, transparency and respect, which seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers - especially in the South. Fair trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade." The <a href="http://www.fairtradefederation.org" target=_blank>Fair Trade Federation</a> says: "Fair Trade is a trading partnership based on dialogue, transparency, and respect. This system of exchange seeks to create greater equity and partnership in the international trading system." <a name="beyond"></a>*Beyond fair wages* Fair trade is much more than just setting a price of goods or creating a safe working environment. Here are some of the benefits that fair trade offers producers to help them develop their communities: * Advanced payments or access to credit: wholesalers or retailers who work directly with artisans will pay them in advance for the products. This makes sure the artisans or farmers have money to buy the resources they need to make products or grow crops, and at the same time feed their children, invest in their communities, etc. Small farmers and artisans are also referred to micro-credit companies who will help them get started as well. Either way, it’s a little push that gets farmers and artisans on their feet so they can start making a living. * Education: many retailers and wholesalers educate the producers they work with. They give them market and fashion information so that artisans can create functional, trendy goods that will sell in North America. They can also educate them so that farmers and artisans improve their business practices or become more efficient. * Development projects: artisans are given help so that they can develop their communities. Handmade Expressions, for example, is trying to provide health insurance to the artisans, install solar panels for electricity in 2 villages, and giving scholarships for vocational education, among other projects. These projects give the artisans or farmers a basic level of development that allows them to lead a better lifestyle, and facilitates the arrival of aid and trade. * Opportunities for women and minorities: Fair Trade aims to empower everyone without discrimination. This creates an environment where women and minorities can participate in this alternative trading system. They then become self-sustainable, decision makers in their communities. This is especially important in the crafts industry, where 70% of producers are women (according to the Fair Trade Federation). <a name="purpose"></a><h2>What is the purpose of Fair Trade?</h2> <img src='http://cdn.shopify.com/s/files/1/0000/9057/files/Globalization_1.jpg?1232642404' alt='' class='protect' /> Fair trade exists to give a chance to small farmers, artisans and workers around the world, so they can also benefit from globalization. This philosophy provides a platform that enables these disadvantaged people to rise above poverty and improve their standard of living. *Globalization* This term is a favorite amongst economists, scholars and politicians. Yet, we should understand that globalization affects all of us, and connects us to everyone in the world. In essence, globalization implies that the world is becoming smaller and more interconnected. It is applied to many subjects: the economy, communications, politics, trade, technology, information, ethics, language, ecology, and many others. When it comes to Fair Trade, though, it mainly revolves around politics, trade and the global economy. In our side of the world (in North America), globalization has been very kind to us. You wake up on a bed that may be of Swedish design, assembled in Asia. You brush your teeth with a product made in the US, drink coffee that comes from Central America, put on your Chinese made shirt and your Vietnamese made jeans, work on your Japanese made computer, talk on your Korean made cell phone, snack on an African grown chocolate bar, and drive your German car to school or work. At school or university you received Spanish classes from an Argentinean teacher, the person sitting next to you is from India, and you get your food served by someone from Mexico in the cafeteria. If you're at work, you may have to discuss software issues with your programmer in the Ukraine, and try to convince your client in Australia that she will get her program soon. Indeed, globalization has been very kind to people of developed nations such as the US, Canada, Western Europe and Japan. However, people in less fortunate countries do not fare as well. While globalization has opened the doors for different countries to communicate, share ideas and engage in trade that should ultimately develop the world, in many situations it has also opened the door to exploitation. Many third world countries do not have the resources to compete equally with developed nations. In cases like these, the powerful corporations in these nations set up a factory, a plantation or a mine in the poor countries under the pretense that they will pay the workers a salary (which is better than no salary), pay taxes, and improve the local economy. Even though it is true that the people in the poor countries want a job and opportunities, the ones offered by multinational corporations are far from ideal. What ends up happening is that people are overworked and are not compensated for all the sacrifices they make (their health, their family, their dignity). There is nothing the disadvantaged workers, farmers or miners can do, because they have no access to information, education, resources, credit, or many of the other privileges that the corporations from the developed world have ready access to. It is no one's fault that this system started, since people were just following the economic theories they knew. However, we are at a point where we realize that this is an unethical way of doing business. That is why people from both developed and developing nations have created the system of Fair Trade. It aims to empower the artisans, farmers and miners with education, access to credit, information about the markets, and communications tools so they can compete in the globalized economy. In the end, Fair Traders hope to create a system where the artisans and farmers become independent and self-sustainable. That is why Fair Trade exists: to create justice, to empower people, to break the poverty cycle, and ultimately so everyone can produce and buy products that are healthy for the people and the planet. <a name="history"></a><h2>History of Fair Trade</h2> <img src='http://cdn.shopify.com/s/files/1/0000/9057/files/History_of_Fair_Trade.jpg' alt='' class='protect' /> 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). <a href="http://www.flo-cert.net/flo-cert/index.php" target=_blank><img src="http://cdn.shopify.com/s/files/1/0000/9057/assets/fairtrade.jpg"alt="" class='protect' /></a> In 1989 the IFAT (International Fair Trade Association, now known as the <a href="http://www.wfto.com/" target=_blank>World Fair Trade Organization</a>) 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. <notextile> <table class="page-table"> <tr> <td class="center"><a href="http://www.wfto.com/" target=_blank><img src="http://cdn.shopify.com/s/files/1/0000/9057/assets/fmark.jpg"alt="" /></a> <a href="http://www.wfto.com/">Old name: IFAT</a></td> <td class="center"><a href="http://www.wfto.com/" target=_blank> <img src='http://cdn.shopify.com/s/files/1/0000/9057/files/WFTO.gif' alt='' class='protect' /></a> <a href="http://www.wfto.com/">New name: WFTO</a></td> </tr> </table> </notextile> Today, the fair trade market is still mostly developed in Europe. According to FLO International: “In 2005, <a href="http://www.fairtrade.net/figures.html" target=_blank>UNCTAD Fairtrade sales</a> 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 <a href=”http://www.ifat.org/” target=_blank>World Fair Trade Organization</a>. 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 <a href="http://www.fairtrade.net/annual_reports0.html" target=_blank>Fair Trade Labeling International's annual reports</a>. <a name="north"></a>*Fair Trade in North America* The Fair Trade movement is constantly 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 (FTF) is the trade association that strengthens and promotes North American organizations fully committed to fair trade. The FTF 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, a 501(c)(3) nonprofit organization, is one of twenty members of Fairtrade Labelling Organizations International (FLO), and the only third-party certifier of Fair Trade products in the United States. They audit transactions between US companies offering Fair Trade Certified™ products and the international suppliers from whom they source. Transfair USA started slightly later than the FTF, in 1998, and began certifying coffee in 1999. They have since grown to certify bananas, chocolate, flowers and other produce.