What is Fair Trade?

According to the Fair Trade Federation, Fair Trade is an economic partnership based on dialogue, transparency, and respect.

This system of exchange seeks to create greater equity and partnership in the international trading system by:

• Creating Opportunities for Economically and Socially Marginalized Producers. Fair Trade is a strategy for poverty alleviation and sustainable development. Members create social and economic opportunities through trading partnerships with marginalized producers. Members place the interests of producers and their communities as the primary concern of their enterprise.
• Developing Transparent and Accountable Relationships. Fair Trade involves relationships that are open, fair, consistent, and respectful. Members show consideration for both customers and producers by sharing information about the entire trading chain through honest and proactive communication. They create mechanisms to help customers and producers feel actively involved in the trading chain. If problems arise, members work cooperatively with fair trade partners and other organizations to implement solutions.
• Building Capacity. Fair Trade involves relationships that are open, fair, consistent, and respectful. Members show consideration for both customers and producers by sharing information about the entire trading chain through honest and proactive communication. They create mechanisms to help customers and producers feel actively involved in the trading chain. If problems arise, members work cooperatively with fair trade partners and other organizations to implement solutions.
• Promoting Fair Trade. Fair Trade encourages an understanding by all participants of their role in world trade. Members actively raise awareness about Fair Trade and the possibility of greater justice in the global economic system. They encourage customers and producers to ask questions about conventional and alternative supply chains and to make informed choices. Members demonstrate that trade can be a positive force for improving living standards, health, education, the distribution of power, and the environment in the communities with which they work.
• Paying Promptly and Fairly. Fair Trade empowers producers to set prices within the framework of the true costs of labor time, materials, sustainable growth, and related factors. Members take steps to ensure that producers have the capacity to manage this process. Members comply with or exceed international, national, local, and, where applicable, Fair Trade Minimum standards for their employees and producers. Members seek to ensure that income is distributed equitably at all times, particularly equal pay for equal work by women and men. Members ensure prompt payment to all of their partners. Producers are offered access to interest-free pre-harvest or pre-production advance payment.
• Supporting Safe and Empowering Working Conditions. Fair Trade means a safe and healthy working environment free of forced labor. Throughout the trading chain, Members cultivate workplaces that empower people to participate in the decisions that affect them.  Members seek to eliminate discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, age, marital, or health status. Members support workplaces free from physical, sexual, psychological, or verbal harassment or abuse.
• Ensuring the Rights of Children. Fair Trade means that all children have the right to security, education, and play. Throughout the trading chain, Members respect and support the UN Convention on the Rights of the Child, as well as local laws and social norms. Members disclose the involvement of children in production. Members do not support child trafficking and exploitative child labor.
• Cultivating Environmental Stewardship. Fair Trade seeks to offer current generations the ability to meet their needs without compromising the ability of future generations to meet their own needs. Members actively consider the implications of their decisions on the environment and promote the responsible stewardship of resources. Members reduce, reuse, reclaim, and recycle materials wherever possible. They encourage environmentally sustainable practices throughout the entire trading chain.
• Respecting Cultural Identity. Fair Trade celebrates the cultural diversity of communities, while seeking to create positive and equitable change. Members respect the development of products, practices, and organizational models based on indigenous traditions and techniques to sustain cultures and revitalize traditions. Members balance market needs with producers' cultural heritage.

FTF members foster partnerships with producers, because they know these connections are a highly effective way to help producers help themselves.

Fair trade is not about charity. It is a holistic approach to trade and development that aims to alter the ways in which commerce is conducted, so that trade can empower the poorest of the poor. Fair Trade Organizations seek to create sustainable and positive change in developing and developed countries.

History

Fair trade traces its roots to 1946 when Edna Ruth Byler, a volunteer for Mennonite Central Committee (MCC), visited an MCC sewing class in Puerto Rico where she discovered the talent the women had for creating beautiful lace and the extraordinary poverty in which they lived despite their hard work. She began carrying these pieces back to the United States to sell and returning the money back to these groups directly. Her work grew into Ten Thousand Villages, which opened its first fair trade shop in 1958 and is now the largest fair trade retailer in North America. In 1949, Sales Exchange for Refugee Rehabilitation and Vocation (SERRV International) began helping refugees in Europe recover from World War II. Today, they support artisans in more than 35 countries.

In the late 1970s, US- and Canadian-based entrepreneurs who defined their businesses with the producers at heart began to meet regularly, exchange ideas, and network. This informal group would evolve into the Fair Trade Federation and formally incorporate in 1994. In 1989, the World Fair Trade Organization (formerly IFAT) was founded as a global network of committed fair trade organizations, aiming to improve the livelihoods of disadvantaged people through trade and to provide a forum for the exchange of information and ideas.

In 1988, as world coffee prices began to sharply decline, a Dutch NGO, Solidaridad, created the first fair trade certification initiative. Named after a best-selling 19th century book, the Max Havelaar label initially applied only to coffee in the Netherlands, but similar labeling initiatives grew up independently across Europe within a few years. In 1997, these organizations created Fairtrade Labelling Organizations International (FLO), an umbrella organization which sets the fair trade certification standards and supports, inspects, and certifies disadvantaged farmers. In 1997, FLO affiliate TransFair Canada opened, followed soon after by TransFair USA in 1999.

Since 2000, fair trade sales and consumer awareness have increased tremendously, as the range of fair trade products has also expanded. From the early days of lace and home décor, handmade items now include clothing, sports equipment, toys, and other items. From its initial focus on coffee, fair trade product certification has expanded to tea, chocolate, sugar, vanilla, fruit, wine, and much more. In 2002, the first World Fair Trade Day was celebrated to heighten consumer awareness and to strengthen connections among fair traders and interested citizens around the globe. In 2006, IFAT reported that total fair trade sales topped $2.6 billion.

From its early days in Pennsylvania, fair trade continues to move forward across the globe, because of the efforts of consumers, entrepreneurs, non-governmental organizations, and other communities.

(Source: Fair Trade Federation)