What is Fair Trade?
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: Fairtrade Labelling Organizations International, World Fair Trade Organization, Network of European Worldshops, European Fair Trade Association. They say:
“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 Fair Trade Federation 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.”
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).
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.