Fair Trade Certification

Fair Trade Clothing WorkerThe Difference Fair Trade Makes

A cotton t-shirt as an agent of change? You mean it's not just a comfortable thing to wear?

That's what cotton becomes in the hands of Fair Trade certified organizations. The same goes for coffee, tea, bananas, and chocolate - as well as a growing variety of products traditionally grown only in the Global South. Throughout the world, these small organizations are challenging how international trade is conducted - sometimes at the risk of lives and livelihoods.

Historically, developed countries have set the terms for how world commodities such as oil, minerals, and tropical foods are traded. Developing countries, as well as small-scale producers in those countries, had little choice but to accept the terms offered. Fair trade is a way to address that inequity, not through charity but through the daily practices of international business. It's a way of using consumers' buying power to help producers help themselves. Fair Trade certification means that producers and buyers are adhering to strong ethical standards built on the foundations of solidarity between consumers and producers.

Alternative and later "Fair Trade" trade organizations initially focused on coffee as their flagship lever of change, a commodity in which setting up fairer trading relationships can make the most difference. Until 1989, when the world coffee price crashed to a 60-year low, coffee was the second largest commodity in the world after oil, and the industry was a major employer throughout Latin America, Asia and Africa. Now most farmers who have stayed in the coffee must struggle to cover their costs of production. Even though prices have risen in the past year, the producers can neither expect to see any benefits, nor count on prices staying high - a problem that is not limited to coffee production.

Meanwhile, in developed countries, consumers are more willing than ever to pay premium prices for goods like high-quality coffee and branded clothing. Where does the money go? It goes to retailers, factory owners, roasters, exporters, processors, taxing agencies, creditors, and to a cast of middlemen known derisively in some places as "coyotes." Speculators in the world's money markets also take their cut, thanks to unstable prices and other vulnerabilities in the value chain.

Fair trade cuts out the middlemen in the export country. By setting up direct trading relationships with coffee or cotton-farming co-ops, Fair Trade certified textile factories, and Canadian retailers, fair traders can pay farmers and workers a fair price: a price that guarantees them a living wage for their labour. Fair trade is a radical departure from the way international trade has been conducted for centuries, and it is radically different from the usual solution offered up to help charity.

Fair trade goes far beyond charity. Instead of making one-time donations that provide temporary assistance consumers create a stream of economic assistance by buying alternative-trade products when they shop. They use their dollars to vote for fair trade. Rather than making a donation to charity after the company's costs are covered after the sale is made and after profits are secured. Fair Traders give up-front in the form of premium prices for farmers' crops. Over time, the premiums pay farmers up to twice what they would have received in the open market. And that's the difference fair trade makes.


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