What is Fair Trade?

Fair trade is an organized social movement which promotes standards for international labor, environmentalism, and social policy in areas related to production of Fairtrade labeled and unlabeled goods. The movement focuses in particular on exports from developing countries to developed countries.

The most widely recognized definition of fair trade was created by FINE, an informal Association of the four main fair trade networks (Fairtrade Labelling Organizations International, International Fair Trade Association, Network of European Worldshops and European Fair Trade Association):

Fair trade is a trading partnership, based on dialogue, transparency and respect, which 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 organizations (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. (*)

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* from Wikipedia

Why Buy Fair Trade?

Workers receive a fair price for their products without fear of exploitation or forced child labor. By receiving a fair price, producers can avoid cost-cutting practices that sacrifice quality. For artisans, making handcrafts is a way to pass on one's skills and culture to future generations. The environment is not adversely affected by practices of pollution, rainforest destruction, or by toxic dumping. Consumers are not overcharged. For instance, the average markup price is 100%, while in other non-fair trade stores is about 700%.

Key Fair Trade principals

Fair trade advocates generally support the following principles and practices in trading relationships:

Creating opportunities for economically disadvantaged producers

Fair trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system.

Transparency and accountability

Fair trade involves transparent management and commercial relations to deal fairly and respectfully with trading partners.

Capacity building

Fair trade is a means to develop producers’ independence. Fair trade relationships provide continuity, during which producers and their marketing organizations can improve their management skills and their access to new markets.

Payment of a fair price

A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production which is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fairtraders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing.

Gender equity

Fair trade means that women’s work is properly valued and rewarded. Women are always paid for their contribution to the production process and are empowered in their organizations.

Working conditions

Fair trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context.

Environmental protection

Fair trade actively encourages better environmental practices and the application of responsible methods of production.(*)

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* from Wikipedia