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 is a sustainable system that endeavours to empower disadvantaged producers through payment of a fair price, democratically organized workplaces, technical assistance, social programming, equality for all, transparency, trust and environmental protection. It is a method of creating sustainable economies and new markets in developing countries, while simultaneously preserving traditional customs, traditions and practices.
WHAT IS THE PROBLEM WITH CONVENTIONAL TRADE?
Traditional North-South trade is problematic because it approaches trade as purely an economic relationship. This has created a deepening divide between wealthy and developing countries—while wealthy multinational companies grow bigger and richer, producers in developing countries get poorer.
Many Western countries are subsidizing their own farmers and producers so much that worldwide market prices are kept artificially low, forcing producers to sell their products at lower and lower prices. Often this means producers do not receive enough money to even cover the cost of production, and they have no power to demand higher prices.
Working conditions are unsafe, children are forced to work to generate extra income for the family and women are not treated as equals. Producers have little options and they, their families and their communities continue to suffer. The state of international trade is dismal.
HOW IS FAIR TRADE DIFFERENT?
Fair Trade is a system of trade that, unlike conventional trade, puts disadvantaged producers first. It is a trading partnership based on dialogue, transparency and respect, and 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 trade.
World Fair Trade Organization (WFTO) prescribes 10 Principles that Fair Trade Organizations must follow in their day-to-day work and carries out monitoring to ensure these principles are upheld:
- Creating Opportunities for Economically Disadvantaged Producers.
- Transparency and Accountability.
- Fair Trading Practices.
- Payment of a Fair Price.
- Ensuring no Child Labor and Forced Labor.
- Commitment to Non Discrimination, Gender Equity and Freedom of Association.
- Ensuring Good Working Conditions.
- Providing Capacity Building.
- Promoting Fair Trade.
- Respect for the Environment.