According to the Fair Trade Federation, fair trade is a system of exchange that seeks to create greater equity and partnership in international trading system by:
By approaching development as a whole process (rather than just a fair price), fair
trade organizations cultivate partnerships with their artisans and contribute to
the development of communities. Fair trade is not about charity; it uses a fairer
system of exchange to empower producers and to create sustainable, positive change.
This information was taken from “Fair Trade” by Jacqueline DeCarlo.
Comparison between fair and conventional (free) trade:
|Fair Trade||Conventional (free) trade|
|Concerns for people, the planet, and profit predominate||Profit is the overriding concern|
|Advance credit allows for income during times of cultivation or production||Payment is received at time of shipments or typically within 30, 60, or 90 days|
|Technical assistance and training, along with social premiums, investment in low-income communities and opportunities for self-determination||Corporate investment in a community is limited to building skill sets for use in commercial enterprises or takes the form of corporate philanthropy|
|Disadvantaged groups such as women and ethnic minorities are made partners in the Fair Trade supply network||Supply chain seeks out lowest cost labor and raw material items, often through exploitative middlemen|
|Consumer education and advocacy leads to socially responsible business innovations||Marketing is directed at increasing profitability|