What is Fair Trade?

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, marginalised producers and workers – especially in the South. Fair Trade organisations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.

Fair Trade definition as agreed by

FLO, WFTO, NEWS! and EFTA
 

Charter of Fair Trade Principles

The two international Fair Trade standard setters, the Fairtrade Labelling Organizations (FLO) and the World Fair Trade Organization (WFTO) agreed in January 2009 on common principles to define Fair Trade. The Charter of Fair Trade Principles aims to provide a single international reference point for Fair Trade through a concise explanation of Fair Trade principles and the two main routes by which they are implemented:

• product certification Fair Trade route (otherwise known as Fairtrade product label) covering mostly agricultural products.
  
• integrated Fair Trade supply chain route (no product label / the Fair Trade certification is for organisations not products).

  FLO                   WFTO

WFTO's 10 standards for Fair Trade

IFAT prescribes 10 standards that Fair Trade organizations must follow in their day-to-day work and carries out continuous monitoring to ensure these standards are upheld:

• Creating opportunities for economically disadvantaged producers
  Fair Trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system.
• Transparency and accountability
  Fair Trade involves transparent management and commercial relations to deal fairly and respectfully with trading partners.
• Capacity building
  Fair Trade is a means to develop producers’ independence. Fair Trade relationships provide continuity, during which producers and their marketing organizations can improve their management skills and their access to new markets.
• Promoting Fair Trade
  Fair Trade Organizations raise awareness of Fair Trade and the possibility of greater justice in world trade. They provide their customers with information about the organization, the products, and in what conditions they are made. They use honest advertising and marketing techniques and aim for the highest standards in product quality and packing.
• Payment of a fair price
  A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production which is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fair Traders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing.
• Gender Equity
  Fair Trade means that women’s work is properly valued and rewarded. Women are always paid for their contribution to the production process and are empowered in their organizations.
• Working conditions
  Fair Trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context.
• Child Labour
  Fair Trade Organizations respect the UN Convention on the Rights of the Child, as well as local laws and social norms in order to ensure that the participation of children in production processes of fairly traded articles (if any) does not adversely affect their well-being, security, educational requirements and need for play. Organizations working directly with informally organised producers disclose the involvement of children in production.
• The environment
  Fair Trade actively encourages better environmental practices and the application of responsible methods of production.
• Trade Relations
  Fair Trade Organizations trade with concern for the social, economic and environmental well-being of marginalized small producers and do not maximise profit at their expense. They maintain long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. Whenever possible producers are assisted with access to pre-harvest or pre-production advance payment