About Fair Trade

DEFINITION
Fair Trade operates on the old adage, “give a man a fish, feed him for a day, teach him to fish, feed him for a lifetime”. Bringing together businesses, government and non government organizations, Fair Trade addresses the problems of trade inequality and offers a solution to many of the world’s problems. Paradoxically working within and against the market positions Fair Trade is a powerful actor in the rebalancing of global commodity chains which, in the end, is a goal in poverty reduction, economic equality and peace globally.
ORIGIN
The concept of ethical trade originated in the Netherlands in the 1940s. It was not until the 1970s, however, that the concept started to gain recognition as an international alternative to “free trade” policies. The increasing speed of globalization, seen after World War II, spurred the transformation, as it was becoming increasingly evident that global economics were falling dangerously out of balance.
EVOLUTION
Since the late 1990’s the ethical trade movement has undergone a series of transformations to work out how to best address the needs of a variety of stakeholders with cultural sensitivity. Nongovernmental initiatives such as the Ethical Trading Initiative (ETI) and the Fair Trade Labeling Organization (FLO) as well as non profit organizations such as Oxfam, the International Federation of Alternative Trade (IFAT) and Fair Trade Federation (FTF) have played integral parts in bringing structure, traceability, and credibility to ethical trade, in an effort to enable it to take a foothold in major First World markets.

The ETI, started in 1998, was a ground-breaking initiative in that it pulled together, for the first time, all the various stakeholders in international trade in an effort to create an ethical trading framework. With its inception, Third World development became a part of people’s daily lives–something they could engage in by purchasing ethically traded products to directly to make a change. This altered the dynamics of development by placing it squarely inside the market. Suddenly, marketing and advertisement, which endorsed ethically traded products, theoretically had the power to change lives of Third World producers and to bring them into the daily consciousness of First World consumers.

VALUES
Core values of Fair Trade are:

CERTIFICATION
Fair Trade when spelled in two words, refers to fair trading practices, similar to the term, “ethical trade”. “Fairtrade” when spelled as one word refers to the certification system which monitors the worldwide trade of crops grown in the Third World such as tea, cocoa and coffee, when that exchange follows certain guidelines. Fairtrade certification guidelines are rigorously set and regulated by the Fairtrade Labeling Organization (FLO) (link to www.fairtrade.net), which is based in Bonn, Germany. FLO is connected to over 20 national Fair Trade initiatives around the world. For example, Trans Fair USA (www.transfairusa.org) is FLO’s United States based national initiative which certified importers, manufacturers and retailers of Fairtrade goods in the U.S.

IMPACT
If the fast growth and First World market penetration of Fairtrade certified products continues, FLO has the potential, with its certification mark, to create the paradigm shifts necessary to create long-lasting global economic balance. The Netherlands, where the Fair Trade movement originated, is still one of the largest consumers of Fairtrade goods. In 2008, almost EURO 61 million worth of Fair Trade goods were sold. This is a 28% growth over 2007. That one of the oldest Fair Trade markets is still growing shows a great potential for change. Globally, over EURO 2.8 billion worth of Fair Trade goods were sold in 2008.