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What is fair trade?

Millions of people around the world endure inadequate, sometimes shocking, conditions at work. Think about this and envision a world where all workers are free from exploitation.

Fair trade is an organized social movement and  market based approach that aims to help producers in developing countries obtain better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as social and environmental standards. It focuses in particular on exports from developing countries to developed countries, most notably handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate, flowers and gold. Although the variety of fair trade products is increasing along with increased awareness of fair trade principles.

Fairtrade certified sales in 2008 amounted to approximately US$4.08 billion (€2.9) worldwide, a 22% year-to-year increase. While this represents a tiny fraction of world trade in physical merchandise, some fair trade products account for 20-50% of all sales in their product categories. In June 2008, Fairtrade Labelling Organizations International estimated that over 7.5 million producers and their families were benefiting from fair trade funded infrastructure, technical assistance and community development projects.


Although no universally accepted definition of fair trade exists, fair trade labelling organizations most commonly refer to a definition developed by FINE an informal association of four international fair trade networks ; Fairtrade Labelling Organizations International, World Fair Trade Organization, Network of European Worldshops and European Fair Trade Association. Fair trade is a trading partnership, based on dialogue, transparency and respect, that 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. 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.


Fair trade advocates typically espouse a number of guidelines. The movement intends to provide market access to otherwise marginalized producers, connecting them to customers and allowing access with fewer middlemen. It aims to provide higher wages than typically paid to producers as well as helping producers develop knowledge, skills and resources to improve their lives. Fair trade advocates also seek to raise awareness of the movement's philosophies among consumers in developed nations. Fair trade products are traded and marketed either by an "MEDC supply chain" (management and executive development centre)whereby products are imported and/or distributed by fair trade organizations (commonly referred to as alternative trading organizations) or by "product certification" whereby products complying with fair trade specifications are certified by them indicating that they have been produced, traded, processed and packaged in accordance with the standards.


Most fair trade import organizations are members of, or certified by one of several national or international federations. These federations coordinate, promote and facilitate the work of fair trade organizations. The following are some of the largest:

  • The Fairtrade Labelling Organizations International (FLO), created in 1997, is an association of three producer networks and twenty national labelling initiatives that promote and market the Fair Trade Certification Mark in their countries. The FLO labelling system is the largest and most widely recognized standard setting and certification body for labelled fair trade. It regularly inspects and certifies producer organizations in more than 50 countries in Africa, Asia and Latin America. However, only products from certain developing countries are eligible for certification and must be from cooperatives.
  • The World Fair Trade Organization (formerly the International Fair Trade Association) is a global association created in 1989 of fair trade producer cooperatives and associations, export marketing companies, importers, retailers and regional fair trade networks and fair trade support organizations. In 2004 WFTO launched the FTO Mark which identifies registered fair trade organizations (as opposed to the FLO system, which labels products).
  • The Network of European Worldshops (NEWS), created in 1994, is the umbrella network of 15 national Worldshop associations in 13 different countries all over Europe.
  • The European Fair Trade Association (EFTA), created in 1990, is a network of European alternative trading organizations which import products from some 400 economically disadvantaged producer groups in Africa, Asia and Latin America. EFTA's goal is to promote fair trade and to make fair trade importing more efficient and effective. The organization also publishes yearly publications on the evolution of the fair trade market. EFTA currently has eleven members in nine different countries.

In 1998, these four federations created together FINE, an informal association whose goal is to harmonize fair trade standards and guidelines, increase the quality and efficiency of fair trade monitoring systems and advocate fair trade politically.

  • The Fair Trade Federation (FTF), created in 1994, is an association of Canadian and American fair trade wholesalers, importers, and retailers. The organization links its members to fair trade producer groups while acting as a clearinghouse for information on fair trade and providing resources and networking opportunities to its members.
  • The Fair Trade Action Network, created in 2007, is an international fair trade volunteer web-based network. The association links volunteers from a dozen of European and North American countries, actively supports Fairtrade Town initiatives and encourages grassroots networking at the international level.

The Fairtrade certification system covers a growing range of products, including bananas, honey, coffee, oranges, cocoa, cotton, dried and fresh fruits and vegetables, juices, nuts and oil seeds, quinoa, rice, spices, sugar, tea and wine. Companies offering products that meet the fair trade standards may apply for licences to use one of the Fairtrade Certification Marks for those products.

The International Fairtrade Certification Mark was launched in 2002 by FLO, and replaced twelve marks used by various Fairtrade labelling initiatives. The new Certification Mark is currently used worldwide (with the exception of Canada and the United States). The Fair Trade Certified Mark, used in Canada and in the United States, also still identifies Fairtrade goods in both countries. Full transition to the new Mark should become reality in the future as it gradually replaces the old Certification Marks in both countries.

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International Fairtrade certification mark

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USA & Canada Fair Trade certified mark

4c9c33d150ea4fair-trade-org.gif WFTO Fair Trade organization mark

 

In an effort to complement the Fairtrade product certification system and allow most notably handcraft producers to also sell their products outside worldshops, the World Fair Trade Organization (WFTO) launched in 2004 a new Mark to identify fair trade organizations (as opposed to products in the case of FLO International and Fairtrade). Called the FTO Mark, it allows consumers to recognize registered Fair Trade Organizations worldwide and guarantees that standards are being implemented regarding working conditions, wages, child labour and the environment. The FTO Mark gave for the first time all Fair Trade Organizations (including handicraft producers) definable recognition amongst consumers, existing and new business partners and governments.

Please read “What is ethical trade?”.