#02 Business
Laura T. Raynolds

Fair Trade Movements, Markets, and Research

Fair Trade's Mission & History

Fair Trade has emerged over recent years as a powerful critique of conventional global inequalities and a promising initiative supporting alternative globalization ideas, practices, and institutions grounded in social justice and ecological sustainability. Fair Trade has become a key rallying cry in challenging the negative impacts of conventional international trade. It has simultaneously become a dynamic market generating US$ 5 billion per year. Fair Trade's recent success is rooted in its ability to combine visionary goals with practical engagements integrating producers, consumers, and businesses across the global North and South.

The fair trade movement grows out of a variety of post WWII initiatives which have sought to challenge the inequalities of international trade and assist disadvantaged populations through a strategy of "trade not aid." Initial programs were launched by church, development, and solidarity groups which supported impoverished peoples by providing preferential markets for their handicrafts. Heir to these efforts, the World Fair Trade Organization now has 350 members with dedicated shops selling fairly traded items across Europe and North America.

Fair Trade certification was introduced in the late 1980s and has been very successful in expanding sales by making labeled food products available in mainstream retail venues. Coordinated via the umbrella organization Fair Trade Labeling Organizations International (FLO), national initiatives operate in 20 countries across Europe, North America, and the Pacific. There are now over 800 producer groups in Latin America, Africa, and Asia exporting 20 different food products which carry FLO labels.

Fair Trade has had substantial successes in building trading partnerships, fostering consumer awareness, and raising producer incomes. Yet its growth and popularity has fueled a number of new challenges.

The Challenges of Mainstreaming

In market arenas, Fair Trade has moved from the domain of small mission-driven companies which are devoted to social justice principles into mainstream markets dominated by profit oriented corporations. This mainstreaming has been made possible by the popularity of products certified under the FLO system. Conventional transnational corporations and supermarket brands are turning to certified products to position themselves in dynamic high-value markets. Commitment to Fair Trade clearly varies and it would be naïve to simply assume that conventional companies will prioritize ethics over profits. Fair Trade products, practices, and enterprises are under constant pressure to conform to dominant market rules within these mainstream channels. These trends strain the FLO certification and labeling system, requiring strict regulation and oversight to insure the integrity of Fair Trade standards.

Yet mission-driven companies and Fair Trade brands persist, providing both alternative products for consumers and an alternative business model for corporations. In recent years we have seen a groundswell in the number of conscious consumers around the world who take ethical issues into consideration in their purchases. How to channel the energy of this consumer base and the power of mission-driven companies into supporting Fair Trade principles and transforming global trade rules remains an ongoing challenge.

In production arenas, Fair Trade is moving from the domain of small producers to engage large enterprises in production and processing. The Fair Trade concept was initially developed in cooperation with small-scale producers. But the expansion of certification from coffee and cocoa into sugar, tea, fresh fruits and an increasingly broad array of products has propelled Fair Trade into the plantation sector. The importance of large-scale enterprises which are dependent on hired, as opposed to family, labor in certified Fair Trade production has risen dramatically. While some argue that this expansion demonstrates Fair Trade's ability to transform wage labor as well as small farmer enterprises and broaden the distribution of benefits, others worry that this move permits the entry of fundamentally unjust operations into Fair Trade networks and reinforces North / South inequalities.

Fair Trade can improve labor conditions on large enterprises since FLO requires adherence to International Labor Organization standards, fosters worker representation, and makes funds available for social service investments. What remains unclear is whether Fair Trade can in this context go beyond other union, corporate social responsibility, or ethical trade measures in fostering worker rights and empowerment.

Within small farm sectors Fair Trade mainstreaming is placing increasing quality and volume demands on producers, undermining the position of less commercially oriented farmers and cooperatives. Fair Trade's mandate to favor disadvantaged producers is thereby being eroded, raising questions about the ability of Fair Trade to maintain its small farmer base.

Fair Trade's Future

The future of Fair Trade is currently being shaped by its engagement with larger social movements. Diverse Fair Trade initiatives are creating common ground via joint advocacy and their interaction with broader trade equity and sustainability movements. In the global North, these efforts bolster Fair Trade's political agenda and the conscientious purchasing which underpins sales. In the global South, Fair Trade is positioned at the nexus of agrarian reform, food sovereignty, cooperative, and solidarity economy movements. Through these engagements we can envision a Fair Trade future which rejects the notion that market growth is an unqualified success and re-asserts the movement's founding principles.