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What is ethical trade?

Millions of people around the world endure inadequate, sometimes shocking, conditions at work. Think about this. Envision a world where all workers are free from exploitation and discrimination and work in conditions of freedom, security and equity.

Ethical trade means different things to different people. In particular, some people refer to “ethical trade” as an umbrella term for all types of business practices that promote more socially and/or environmentally responsible trade.

Ethical trade means that retailers, brands and their suppliers take responsibility for improving the working conditions of the people who make the products they sell. Many workers in varying fields are employed by global companies and many of them are based in developing countries where laws designed to protect workers' rights are inadequate or not enforced. Companies with a commitment to ethical trade adopt a code of labour practice that they expect all their suppliers to work towards. Such codes address issues like wages, hours of work, health and safety and the right to join free trade unions. 'Doing' ethical trade is much harder than it sounds. Modern supply chains are vast, complex and span the globe. Labour issues are themselves challenging. For example, what exactly is ‘a living wage'? What should a company do if it finds children working in a supplier's worksite? Evicting children from the workplace can, paradoxically, make their lives worse. 

An alternative trading organization (ATO) is usually a non government organization (NGO) or mission-driven business aligned with the fair trade movement, aiming "to contribute to the alleviation of poverty in developing regions of the world by establishing a system of trade that allows marginalized producers in developing regions to gain access to developed markets".

Alternative trading organizations have Fair Trade at the core of their mission and activities, using it as a development tool to support disadvantaged producers and to reduce poverty, and combine their marketing with awareness-raising and campaigning.

Alternative trading organizations are often, but not always, based in political and religious groups, though their secular purpose precludes sectarian identification and evangelical activity. Philosophically, the grassroots political-action agenda of these organizations associates them with progressive political causes active since the 1960s: foremost, a belief in collective action and commitment to moral principles based on social, economic and trade justice.

According to the European Fair Trade Association (EFTA), the defining characteristic of alternative trading organizations is that of equal partnership and respect - partnership between the developing region producers and importers, shops, labelling organizations, and consumers. Alternative trade "humanizes" the trade process - making the producer-consumer chain as short as possible so that consumers become aware of the culture, identity, and conditions in which producers live. All are committed to the principle of alternative trade, the need for advocacy in their working relations and the importance of awareness-raising.

Please read “What is Fair Trade?”.