BIG News in the Fair Trade Movement
Fair Trade USA (FTUSA, formerly Transfair) announced earlier this fall that it is resigning its membership in Fairtrade International (FLO), the international fair trade certification organization. FTUSA, the dominant certifier in the U.S. market has been a key member of the FLO since 1998 when it was founded; its certifiying label is widely recognized on fair trade products in the U.S. It has launched a new initiative, Fair for All, which expands fair trade certification to coffee laborers on plantations.
History of the Fair Trade Movement
Beginning roughly around the 1940s, Fair Trade as we know it today, began in reaction to the exploitive trading relationships and harsh working conditions that were common in many tropical commodities industries (coffee, chocolate, and sugar to name a few). Direct trade relationships were initiated by church and community groups in order to create direct trade relationships with producers, effectively creating an alternative supply chain parallel to conventional trade. These alternative trade relationships created direct partnerships among producers and consumers and were defined by better prices, longer-term contracts and personal relationships.
The movement spread to countries all around the world — including the US, Canada, countries in Europe, New Zealand and Australia — and, eventually, national Fair Trade groups such as Fair Trade Canada were formed. In 1997, these national groups joined under one umbrella organization called the Fairtrade Labelling Organizations International headquartered in Bonn, Germany. The FLO has since changed its name to Fairtrade International.
In 1998, the Fair Trade label was born in order to help producers access more markets for their products, which catapulted Fair Trade towards the success it’s had to date. The Fairtrade Labeling Organization in Germany sets the standards for Fair Trade products, and FLO-CERT (a separate company) ensures that these standards are met by producers’ organizations around the world. In all the respective countries where Fair Trade goods are sold, local organizations (like Fair Trade Canada here, or the Fair Trade Foundation in the UK, for example) ensure that only products that meet the FLO standards bear the Fair Trade label.
Implications and Response
One of the FLO’s most important functions has been to set Fair Trade standards, which has ensured, that from Vancouver to Beijing, consumers know exactly what the Fair Trade label represents. The system hasn’t always been perfect, and the FLO, along with its member organizations, have done a lot to reform the standards to ensure that all stakeholders in Fair Trade are represented – especially producers and producer groups. Fair Trade’s most famous standards have been financial ones: the Fair Trade minimum price and the Fair Trade social premium, but that’s not all Fair Trade is about. One of the most celebrated Fair Trade standards has been the requirement that producers organize themselves in democratically run co-operatives, where all members have an equal voice in the way business is done and the way the Fair Trade premium is spent. These cooperatives have become powerful forces in Fair Trade, and have helped producers pool together resources and discover power in numbers that otherwise might not be available if they were working independently.
FTUSA’s resignation from FLO is highly significant:
- This is the first time since the birth of the FLO that any national organization has decided to leave the unifying umbrella network that the FLO has provided since the late 1990s.
- This is the first time ever that a national organization has decided to split from the FLO to unilaterally develop its own standards for a given product. Furthermore, the standards that Fair Trade USA has decided to develop for coffee do not include a requirement for producers to be organized in democratically run cooperatives.
FTUSA’s decision to leave FLO has been met with predominantly negative reaction from most sectors of the fair trade movement. You can read statements from a variety of organizations on the Fair Trade Resource Networks’ website
*** Thanks to Fair Trade Vancouver for this overview