In essence, Fair Trade is a social movement where people come before profits. It is a trading partnership, based on dialogue, transparency and respect, which seeks greater equity in international trade, securing rights of the marginalized producers and workers in the unequal system of world trade which places profit above human rights. It contributes to sustainable development by offering better trading conditions to the underprivileged especially from the Third World.
Fair Trade started as a grassroots movement in the 70s when a group of companies called Alternative Trade Organizations (ATOs), made a commitment to work directly with indigenous peoples to market their products directly to consumers. By cutting out middlemen, ATOs had been able to pay farmers substantially more while offering a competitive product. The aim was to alleviate poverty in the Third World by building direct, sustainable relationships with disadvantaged producers by providing fair access to markets in the developed countries for their products.
The aims of Fair Trade are still the same today, but Fair Trade has developed into a powerful force. Various labeling organizations and institutions like the International Federation of Alternative Trade (IFAT) were formed to communicate ideas about Fair Trade, raise awareness and campaign for changes in the rules and practices of conventional international trade. In an endeavor to place a world standard on what is fair, the labeling organizations came together and formed the Fairtrade Labeling Organizations International (FLO), based in Bonn, Germany.
In 1998 an informal association of the four main Fair Trade networks was created, referred to as FINE — F for Fair Trade Labeling Organizations International (FLO), I for International Fair Trade Association, now the World Fair Trade Organization (WFTO), N for Network of European World Shops (NEWS), and E for European Fair Trade Association (EFTA).
The aim of FINE is to enable these networks and their members to cooperate on the development of harmonized core standards and guidelines for Fair Trade. FINE is an informal working group and it has no formal structure and no decision-making power but a working group from the four leading international Fair Trade networks has come up with a definition and guidelines for fair trade which are know as the “FINE” Criteria.
The Criteria for use of the Fairtrade label, and monitoring to ensure compliance, is undertaken by the Fairtrade Labeling Organizations International (FLO). FLO is an association of 21 labeling initiatives and 3 producer networks. It is the worldwide Fair Trade Standard setting and Certification organization that brings benefits to several hundred thousand producers, workers and their families in some 50 countries under the Fair Trade label.
World Fair Trade Organization (WFTO) is the global network of Fair Trade Organizations (FTOs) with over 270 FTOs in 60 countries.
European Fair Trade Association is an association of 11 fair trade importers in 9 European Countries. It facilitates the exchange of information, networking and development of joint projects.
The Network of European Worldshops represents over 2,000 fair trade shops throughout 13 European countries, essentially represented by a grouping of European national fair trade retailer’s associations.
Fairtrade Labeling Organizations International has member organizations in each country that handle the certification of Fair Trade imports and use of the Fair Trade seal on packaging. In the United States that group is the TransFair USA, based in Oakland. The certifier of fair trade commodities in Canada is the TransFair Canada; in the UK it is the Fair Trade Foundation.
In another post we’ll look at the current Fair Trade Certification model, criteria used to accept importers into the directory of recognized importers and guidelines for retailers to adhere to general fair trade principals.