Fair Trade

Fair trade products, the most well-known examples of which are coffee, chocolate and tea, are sold in places such as the United States, Japan or Europe, with the stated guarantee of high standards in terms of the treatment and compensation of the producers of those goods in places such as Latin America, Africa or Asia. In particular, fair trade generally adheres to the following principles:

Creating opportunities for economically disadvantaged producers.

Fair trade importers often seek out markets in places where none previously existed. One example might be in parts of Africa which are marginalized due to the lack of (or lack of access to) commodities that can be sold on the global market. Fair trade seeks to give people in these situations access to a global market through the sale of handicrafts and artwork local to these regions. The slogan “trade not aid,” can be used to describe this type of strategy, which aims to promote sustainable development.

Transparency and accountability.

Unlike relationships in the “free trade” economy, fair trade importers seek a position of equality with the producers (artisans or farmers). As such, fair trade partners are open in terms of their management decisions and strategies, such as when, where and how the fair trade products will be sold, and for how much. Fair trade partners are also transparent about the conditions and compensation of the producers of the goods they sell.

Capacity building.

Fair trade importers are committed to increasing the capacity and independence of the producers of fair trade goods, assisting them in the opening of new markets, or improvements in efficiency.

Payment of a fair price.

The price of commodities such as coffee, in the “free trade” system, are currently set by the Wall Street cash market, which determines the average cost of these goods. Fair trade, on the other hand, negotiates directly with producers to determine a “fair price,” which is based upon a regional or local context. A fair price must cover not only the cost of production, but production which is socially and environmentally sound.

Gender equality.

Fair trade partners are committed to gender equality in production, pay and decision-making, and encourage communities who are striving for fair and equitable relationships in all parts of society. 

Working conditions.

While most large corporations who have production facilities abroad, and generally wash their hands of the day-to-day conditions of the workers or farmers who produce the goods they import, fair trade seeks to become actively involved in the oversight and well-being of the producers. This generally means adherence to safety standards, reasonable working hours as well as adequate pay.

Environmental protection.

Companies working in the “free trade” model often benefit financially from lower environmental standards or controls in countries where their goods are grown or produced. In many cases, the manner in which goods consumed in the United States were produced in, say, China or Mexico, would be flatly illegal if produced domestically. Fair trade adheres to a higher standard of environmental protection, asserting that stewardship of the earth and its fragile balance is as important at home as it is elsewhere.

In other words, fair trade not only asks “what could we do,” but also “what should we do.” Fair trade proponents argue that morality and economics need not be diametrically opposed, but can actually be mutually supportive.