What is Fair Trade?
What is Fair Trade?
Definition accepted by the International Fair Trade Association (IFAT):
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, marginalizes 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 international trade.
(IFAT Objectives for Fair Trade)
Fair trade provides opportunities for development to small producers and poor workers in developing countries through production and trade. The relation between the Fair Trade Organization and the producer is always based on communication, honesty and respect.
Fair Traders also influence the international trading system and private companies toward becoming more just and conductive to a sustainable development.
Sustainable development- development that meets the needs of the present without compromising the ability of future generations to meet their own needs including environmental, social and economic elements.
What does this mean for us as shoppers?
Martin Luther King Jr. once noted that "by the time we finish eating breakfast we have relied on half of the world," (DeCarlo, 15). The chairs we sit on, the food we eat, décor around the house, toothpaste, tweezers, computers, etc. have all been at least partly manufactured in another country.
Take for example the shirt you are wearing right now*. It could have been sewn by a woman in Chile making only enough money to feed her family, woven by a child in India working 10 hours a day in a sweatshop, or it could have been made by a women in Santa Cruz, Brazil who, because of a cooperative, can afford to come home early from work to care for her children.
By purchasing a Fair Trade shirt or any item, you as the consumer know that the producer or worker was paid a fair wage. Fair Trade is, however, more than just paying producers a fair wage...
What else does Fair Trade concern?
(IFAT Standards for Fair Trade Organizations)
1. Creating opportunities for economically disadvantaged producers
2. Transparency and accountability
Transparency [trans-pair-uh n-see, -par-]-noun: The full, accurate, and timely disclosure of information.
3. Trading Practices
The organization trades with concern for the social, economic and environmental well-being of marginalizes small producers and does not maximize profit at their expense
4. Payment of a Fair Price
Prices agreed upon with consent of producers or representative of the region. Producers also have access to credit, advanced payments, and in many cases the Fair Trade Premium.
5. Child Labor and Forced Labor
"Fair Trade Organizations adhere to the UN Convention on the Rights of the Child and national law on the employment of children," (IFAT, 10)
6. Non Discrimination, Gender Equity and Freedom of Association
The organization does not discriminate in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, HIV/Aids status or age.
7. Working Conditions
The organization provides a safe and healthy working environment for employees and / or members. It complies, at a minimum, with national and local laws and ILO conventions on health and safety.
8. Capacity Building
Partnerships are developed as long term to ensure stability and growth. In addition "technical and commercial support is provided along with information to facilitate market access," ( IFAT, 10).
9. Promotion of Fair Trade
10. The Environment
What are the obstacles for producers that Fair Trade may help?
(from Alex Nicholls and Charlotte Opal's Fair Trade: Market Driven Ethical Consumption)
- Lack of access to local and export markets because of lack of transportation and infrastructure
- Lack of information about world prices
- Lack of information about quality and industry requirements
- Lack of access to financial markets for competitive credit and capital
- Inability to respond easily to market forces given the incredible risks to livelihood
- Weak legal systems that do not protect producer rights
"Today, "producers...live an unpredictable existence because the prices for a wide range of commodities are very volatile and in addition follow a declining long-term trend"," (IFAT, 36)
Fair Trade Quotes and Statistics
Is there really a problem?
"The United Nation estimates that a person needs at least four dollars a day, about $1500 a year, to live a basic, decent life. By this measure, of the 6.5 billion people in the world today, four billion people do not live a decent life," (DeCarlo, 3)
" The total loss for developing countries due to falling commodity prices has been estimated by the Food and Agricultural Organization (FAO) to total almost $250 billion between 1980 and 2002," (IFAT, 37)
How many people actually benefit from Fair Trade?
"In these early years of the 21st century, it is estimated that five million people in Africa, Asia and Latin America benefit from fair trade," (IFAT, 8)
"The analyses also conclude that Fair Trade improves social quality in that it help producers to meet their everyday, basic needs and live with dignity, security, and hope," (IFAT,25)
How does it help?
"[Importing companies] assist their producer partners in many different ways, giving them advice on product development, helping with skill and management training or offering additional support in difficult economic and social situations," (IFAT, 19)
"The Fair Trade system has developed a series of rules and mechanisms that protect the weaker partners in the supply chain- the producers and workers- from abuse and exploitation," (IFAT, 42)
"Fair Trade has the potential to reshape how products are made and consumed. As such it can influence how we relate to each other as human beings," (DeCarlo, 3)
"Fair Trade is a development process which seeks to move producers and worker from a position of vulnerability to one of security and self-sufficiency," (IFAT 10)
How can shoppers be sure that Fair Trade Organizations are following the rules?
"IFAT requires all its member organizations to report their achievements in relation to Fair Trade standards every two years, and set targets for further improvements," (IFAT, 24)
"[Fair Trade Labeling Organizations International] FLO carries out annual inspections of producers on its registers and audits trade flows," (IFAT, 24)
"Fair Trade does not classify an organization by its legal status or form of ownership but by its monitored conformity to Fair Trade standards," (IFAT, 17)
Decarlo, Jacqueline. Fair Trade. Oxford, England: Oneworld Publications, 2007
IFAT- International Fair Trade Association, FLO- Fairtrade Labelling Organizations,
NEWS!- Network of European Worldshops, and EFTA-European Fair Trade Association. Business Unusual: Successes and Challenges of Fair Trade. Brussels, Belgium: 2006