What is fair trade?

The idea of fair trade dates back to the 1940s when American churches were selling handicrafts made by refugees in Europe after World War II. The first fair trade certification of commodities began in 1988, when coffee was imported from Nicaragua and Mexico according to “fair trade” standards. Most international trade, however, operates under so-called “free trade” standards.

So what is the difference between “free trade” and “fair trade”? Free trade is so named because the prices of goods and services are market-driven, all producers get the same conditions (in theory) and there are no import limits. Does that actually happen? Not so often. In reality, certain industries get government financial help so that they can sell their goods at unfairly low “dumping” price levels. Furthermore, the large corporations that control most of the world’s coffee trade strive to undercut each other on price, which they commonly achieve by cutting wages and benefits to laborers. When these workers earn about $.80 per pound of coffee – while consumers pay double that, and more, for a single cup – “free trade” becomes something less than fair.

The fair trade movement, sometimes called the trade justice movement, promotes standards for the production and trade of different goods and services. Fair trade strives not only for economic development, but also for social justice, environmental protection, and maintaining stronger trade connections.

Labels used in United States ("Fair Trade Certified"), United Kingdom ("Fairtrade") and Europe ("Max Havelaar") are a guarantee that the producers of the goods you buy meet fair trade standards. Today, 19 countries have their own labeling initiatives which operate under the guidelines of the Fairtrade Labelling Organization, and more than 500 partner organizations have already been certified in accordance with international fair trade standards. They require a guarantee of fair process, no child or slave labor, anti-dumping practices, and high quality standards. In addition, they must employ environmentally-friendly growing methods. Thus organic farming is often linked with fair trade movement, because of the common emphasis on environmental and social balance. All these standards also follow the conventions of the International Labor Organization.

As consumers, we don’t need to donate large sums of money to make a difference. When we choose fair trade products – such as coffee, bananas, tea, chocolate, honey, sugar, orange juice or flowers - we support the movement. We help third world producers keep their farms, and improve the living and working conditions of small farmers, workers, and families in regions that need us the most.