Keeping Fair Trade Fair

Posted on August 26th, 2019

Keeping Fair Trade Fair

Keeping Fair Trade Fair

At the heart of the Fair Trade movement is a phrase first uttered 50 years ago: trade, not aid. This saying expresses a simple but powerful idea: that consumers can best empower marginalized producers or workers in poor communities across the globe by intentionally purchasing from them––and that this inclusive market solution can help reduce poverty instead of treating its symptoms with foreign aid.

Despite the centrality of this belief in virtually all aspects of Fair Trade, the movement has taken on different forms and focuses across its 60-year history. To better understand the challenges Fair Trade faces today, let's look at how it has fared (no pun intended) in the past.


The very first Fair Trade shop opened in the U.S. in 1958, and the first Fair Trade Organizations (FTOs) were founded throughout the 1960s. Prior to 1970, Fair Trade shops around the world sold handmade crafts from developing countries, while FTOs advised and created trade relationships for small craft producers and farmers. The Fair Trade products you're probably most familiar with, though, are food and drink items like coffee and bananas; agricultural products currently dominate the Fair Trade market. Coffee is perhaps the most ubiquitous Fair Trade commodity in modern society and is featured in many studies assessing the impact of Fair Trade on international trade.


With billions of dollars worth of certified Fair Trade goods purchased in 2018 alone, one might wonder how Fair Trade products entered the mainstream. A large part of that process involved certification and labeling and coffee was the first product to employ such techniques in an attempt to reach more consumers. In 1988, Dutch importers began placing the “Max Havelaar” label on Fair Trade coffee from Mexico in order to distinguish it from regular coffee brands when sold in supermarkets. Labeling Fair Trade products became a widespread practice; there are currently over 600 businesses partnering with Fair Trade USA's labeling initiative, just one of countless others that exist. While this proliferation of branding certainly helped popularize Fair Trade products, it also presented various new considerations regarding the future of the entire movement.

Fair Trade Organizations:

In response to the success of labeling Fair Trade products, FTOs sought to legitimize their status and gain access to product labels without having to certify each specific product. In 2009, the International Federation of Alternative Trade, a global group of FTOs, renamed itself the World Fair Trade Organization (WFTO) and established the 10 Principles of Fair Trade to verify that member organizations comply with Fair Trade standards. Companies verified by the WFTO earn Guaranteed Member status and can use the WFTO label on all of their products.


The trend of certification in the Fair Trade movement has introduced several issues that need to be addressed. Perhaps the most apparent problem is the difficulty for small, disadvantaged producers (the group Fair Trade aims to help) in earning certification. Organizations such as Fairtrade International require costly fees from producers in order to use their label and access global trading networks. As a result, critics have contended that certification can actually hurt the most disadvantaged producers, while the wealthier producers reap all of the economic benefits. Also, the WFTO has asserted that existing certification models are focused too closely on agricultural producers, leaving out the craft makers who were instrumental in the origination of Fair Trade.

Fair Trade USA's split from WFTO:

In 2012, Fair Trade USA left the WFTO and separated from labeling organization Fairtrade International in order to extend certification to larger coffee plantations and increase the market potential of Fair Trade products. This move also allowed Fair Trade USA to certify products containing as little as 10% Fair Trade contents. That same year, the WFTO issued a statement encouraging FTOs not to abandon the original mission of the Fair Trade movement in pursuit of greater market share:

“The role of FTOs is and remains that of the principal actor of Fair Trade, which supports small and marginalized producers by building up long-term trading partnerships, based on dialogue, transparency, and respect.”


So what should we gather from all of this, besides the impression that Fair Trade is much more complicated than it may have seemed at first? If you believe in the WFTO's definition of Fair Trade as we do here at Faire, then we can summarize what Fair Trade means today with 3 simple conclusions:

1) Fair Trade is a market-based solution, not a charity or philanthropic effort. Fair Trade aims to assist marginalized producers by connecting them to consumers rather than sending them donations or funding development programs.

2) Fair Trade is continually evolving. As this short history hopefully shows, the Fair Trade movement continually addresses emerging issues and incorporates innovative methods to most effectively foster equitable trade throughout the world.

3) In spite of that continual evolution, the core of Fair Trade is always the same: despite adopting various organizational and marketing exercises, Fair Trade remains focused on true economic empowerment. If selling labeled coffee at Starbucks isn't lifting poor producers out of poverty, then it's not Fair Trade.

Keep Fair Trade's history in mind when making responsible purchases and you can be sure that your hard-earned dollars are having an effect worthy of it.

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