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Fair Trade
Concept
Fair Trade today is a global movement, with thousands of small-scale producers and workers in over 50 countries in the South organized in partnerships with NGOs from the North to trade fair coffee, tea, chocolate, fruit juice, rice, etc. This movement aims at raising awareness in the North and offering Southern producers improved terms of trade along the principle of justice and the objective of development.
Many different definitions of Fair Trade can be found among the myriad of NGOs, cooperatives, and world shops busy with this issue of global justice. However, in 2001, a common definition was agreed on by the main Fair Trade networks: Fairtrade Labelling Organisations International (FLO); International Federation for Alternative Trade (IFAT; now WFTO); European Fair Trade Association (EFTA); and Network of European World Shops (NEWS!).
Since then, the definition below has been recognised by the European Parliament (2006), the European Economic and Social Committee (2009) and the European Commission (2009):
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 – especially in the South. Fair Trade Organisations, 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 is also a product label with a certification system conceived as an independent guarantee to consumers of the distinctive quality of the products they buy. The Fairtrade certification system is run by a separate company (FLO-CERT), which checks compliance with Fair Trade standards, which stipulate for example. that companies trading Fair Trade products must:
- Pay a price to producers that aims at covering the costs of sustainable production: the Fairtrade Minimum Price.
- Pay an additional sum that producers can invest in development: the Fairtrade Premium.
- Partially pay in advance, when producers ask for it.
- Sign contracts that allow for long-term planning and sustainable production practices
Historical overview
The philosophical principles underlying the concept can be traced back to Aristotle (and his ideas of justice, equity and goodness), but the concept as it is known now first appeared after WWII in the USA, with the Ten Thousand Villages‘ (formerly Self Help Crafts) project in the late 1940s, and then with Oxfam UK in the late 1950s, when Oxford students introduced the sale of crafts made by Chinese refugees in Oxfam shops. In 1964 Oxfam created the first Fair Trade Organization, but parallel initiatives were taking place in the Netherlands, notably with the message ―by buying cane sugar you give people in poor countries a place in the sun of prosperity‖.Networks of engaged citizens have been crucial in the constitution of the Fair Trade movement, working as volunteers in Fair Trade shops in order not only to diffuse products but also ideas.
The second UNCTAD conference (United Nations Conference on Trade and Development) in Delhi in 1968 was crucial in enabling developing countries to bring the debate to an international political forum with the motto ―Trade not Aid‖, adding equity to the international agenda.
From the 1960s onward, Fair Trade became associated with objectives of economic and social development: at a micro scale, aiming to provide a supplementary income to families, and at a global scale, to make international trade fairer and make mainstream business more aware of its social and (later) environmental responsibility. In the 1980s, the idea of the Fair Trade label was conceived by a Dutch church-based NGO, leading in 1988 to the Max Havelaar label in The Netherlands. Within a year this label had managed to secure a 2 percent market share for its labeled coffee, and similar non-profit Fair Trade labelling organizations flourished. In 1997, some order was introduced with international standards and a certification process agreed by the Fairtrade Labelling Organisation (FLO). Labeling and certification has brought Fair Trade to mainstream business, as: Currently, over two-thirds of Fair Trade products are sold by mainstream catering and retailing.
Challenges ahead
From its origins, this movement has aimed to redistribute incomes from Northern consumers to producers of the South, and to question and raise awareness of mainstream models of development and globalization in the North and South. The current challenges of Fair Trade are to couple a wide diffusion of the concept, a certification system and the selling of Fair Trade products through conventional distribution networks with these initial principles of education and advocacy.
Indeed, mainstreaming Fair Trade product into large-scale distribution has led to an increase of market share which benefits to southern producers. However, this was also synonym of a focus on the logic of consumption rather than of civic coordination. Further, it has turned Fair Trade into a genuine market niche leading to clear risk of Fair Trade being re-absorbed by the market and captured by dominant actors of the food system (Renard, 2003). The danger could come from the institutionalization process itself, and its tendency to minimize social and environmental requirements towards the minimum consensus. To avoid this, the certification procedure has to keep standards high and the Fair Trade labels have to remain the symbol of moral values associated to the specific social interactions on which Fair Trade was built and which legitimise it. It is also worth mentioning that many essential bulk commodities traveling from South to North (oil, gas, copper, iron ore…) are not included in Fair Trade circuits.