What Is Fair Trade?

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:

  • Creating opportunities for economically and socially marginalized producers
  • Developing transparent and accountable relationships
  • Building capacity
  • Promoting fair trade
  • Paying promptly and fairly
  • Supporting safe and empowering working conditions
  • Ensuring the rights of children
  • Cultivating environmental stewardship
  • Respecting cultural identity

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

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