Fair trade

For other uses, see Fair trade (disambiguation).
Fair Trade teas
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Fairtrade bananas from the Dominican Republic

Fair trade is a term for an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fair trade movement combines the payment of higher prices to exporters with improved social and environmental standards. The movement focuses in particular on commodities, or products that are typically exported from developing countries to developed countries but is also used in domestic markets (e.g., Brazil, the United Kingdom and Bangladesh), most notably for handicrafts, coffee, cocoa, wine, sugar, fruit, flowers and gold.[1][2]

Fair trade labelling organizations commonly use a definition of fair trade developed by FINE, an informal association of four international fair trade networks: Fairtrade Labelling Organizations International, World Fair Trade Organization (WFTO), Network of European Worldshops and European Fair Trade Association (EFTA). Fair trade, by this definition, is a trading partnership based on dialogue, transparency and respect, that seeks greater equity in international trade. Fair trade organizations, backed by consumers, support producers, raise awareness and campaign for changes in the rules and practice of conventional international trade.[3]

There are several recognized fair trade certifiers, including Fairtrade International (formerly called FLO, Fairtrade Labelling Organizations International), IMO, Make Trade Fair, and Eco-Social. Additionally, Fair Trade USA, formerly a licensing agency for the Fairtrade International label, broke from the system and implemented its own fair trade labelling scheme, which expanded the scope of fair trade to include independent smallholders and estates for all crops. In 2008, Fairtrade International certified approximately (€3.4B) of products.[4][5]

On 6 June 2008, Wales became the world's first Fair Trade Nation[clarification needed]; followed by Scotland in February 2013.[6][7][8] The fair trade movement is popular in the UK, where there are over 500 Fairtrade towns[clarification needed], 118 universities, over 6,000 churches, and over 4,000 UK schools registered in the Fairtrade Schools Scheme[clarification needed].[9] In 2011, more than 1.2 million farmers and workers in more than 60 countries participated in Fairtrade International's fair trade system, which included €65 million in fairtrade premium paid to producers for use developing their communities.[10]

Some criticisms have been raised about fair trade systems. One 2015 study concluded that producer benefits were close to zero because there was an oversupply of certification, and only a fraction of produce classified as fair trade was actually sold on fair trade markets, just enough to recoup the costs of certification.[11] A study published by the Journal of Economic Perspectives, however, suggests that Fair Trade does achieve many of its intended goals, although on a comparatively modest scale relative to the size of national economies.[12] Some research indicates that the implementation of certain fair trade standards can cause greater inequalities in some markets where these rigid rules are inappropriate for the specific market.[13][14][15] In the fair trade debate there are complaints of failure to enforce the fair trade standards, with producers, cooperatives, importers, and packers profiting by evading them.[16][17][18][19][20] One proposed alternative to fair trade is direct trade, which eliminates the overhead of the fair trade certification and allows suppliers to receive higher prices much closer to the retail value of the end product. Some suppliers use relationships started in a fair trade system to autonomously springboard into direct sales relationships they negotiate themselves, whereas other direct trade systems are supplier-initiated for social responsibility reasons similar to a fair trade systems.

  1. ^ Brough, David (January 10, 2008), "Briton finds ethical jewellery good as gold", Reuters, NA, archived from the original on August 12, 2011, retrieved July 1, 2010
  2. ^ Moseley, WG (2008), "Fair Trade Wine: North Africa's Post Apartheid Vineyards and the YouTube Global Economy", Globalizations, 5 (2): 291–304, doi:10.1080/14747730802057753, S2CID 154416345
  3. ^ What (PDF), European fair trade association, archived from the original (PDF) on 2007-07-12, retrieved 2009-05-04
  4. ^ Facts & figures, Fair trade, archived from the original on 2013-04-24, retrieved 2013-05-07
  5. ^ "General overview" (PDF). WTO. 2006. p. 3. Archived (PDF) from the original on 2020-09-19. Retrieved 2006-12-31.
  6. ^ "Scotland as a Fair Trade Nation – Social Responsibility and Sustainability". blogs.ed.ac.uk. Archived from the original on 2022-02-07. Retrieved 2022-02-07.
  7. ^ "Wales made fair trade 'pioneer'". BBC News. BBC News. Archived from the original on 20 September 2021. Retrieved 20 September 2021.
  8. ^ "Wales as a Fair Trade Nation". Fair Trade Wales. Fair Trade. Archived from the original on 20 September 2021. Retrieved 20 September 2021.
  9. ^ Paull, J (2011), "The Fairtrade movement: Six lessons for the organics sector" (PDF), Proceedings of the Third Scientific Conference of the International Society of Organic Agriculture Research, Namyangju, Korea, pp. 317–20, archived (PDF) from the original on 2012-06-10, retrieved 2011-12-17{{citation}}: CS1 maint: location missing publisher (link)
  10. ^ Annual report (PDF), Fair trade, 2009, archived (PDF) from the original on 2014-08-01, retrieved 2014-05-01
  11. ^ de Janvry, Alain; McIntosh, Craig; Sadoulet, Elisabeth (July 2015). "Fair Trade and Free Entry: Can a Disequilibrium Market Serve as a Development Tool?". The Review of Economics and Statistics. 97 (3): 567–73. doi:10.1162/REST_a_00512. S2CID 27543341. Archived from the original on 2020-11-27. Retrieved 2020-08-31.
  12. ^ Dragusanu, Raluca; Giovannucci, Daniele; Nunn, Nathan (2014). "The Economics of Fair Trade" (PDF). Journal of Economic Perspectives. 28 (3): 217–236. doi:10.1257/jep.28.3.217. S2CID 31724677. Archived (PDF) from the original on 24 September 2020. Retrieved 1 April 2020.
  13. ^ Booth, P.; Whetstone, L. (2007). "Half a Cheer for Fair Trade". Economic Affairs. 27 (2): 29–36. doi:10.1111/j.1468-0270.2007.00727.x. S2CID 55272716.
  14. ^ Carimentrand, A.; Ballet, J. (2010). "When Fair Trade increases unfairness: The case of quinoa from Bolivia" (PDF). Archived (PDF) from the original on 2012-03-28. Retrieved 2012-02-07.
  15. ^ Working paper FREE-Cahier FREE n°5-2010; Doppler, F., & Cabañas, A.A. (2006). Fair Trade: Benefits and Drawbacks for Producers. Puente @ Europa, Año IV, Número 2 – Junio 2006, 53–56.
  16. ^ Raynolds, LT: 2009, "Mainstreaming Fair Trade Coffee: from Partnership to Traceability", World Development, 37 (6) p. 1089.
  17. ^ Valkila, J; Haaparanta, P; Niemi, N (2010), "Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers", Journal of Business Ethics, 97 (2): 264, doi:10.1007/s10551-010-0508-z, S2CID 146802807
  18. ^ Utting, K (2009). "Assessing the impact of Fair Trade Coffee: Towards an Integrative Framework". Journal of Business Ethics. 86 (S1): 139. doi:10.1007/s10551-008-9761-9. S2CID 154359304.
  19. ^ Valkila, J (2009). "Fair Trade organic coffee production in Nicaragua – Sustainable development or a poverty trap?". Ecological Economics. 68 (12): 3018–25 [3022–23]. Bibcode:2009EcoEc..68.3018V. doi:10.1016/j.ecolecon.2009.07.002.
  20. ^ Reed, D.: 2009, "What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective", Journal of Business Ethics, 86, 3–26. p. 12