Have you ever wondered why so many people prefer to buy fairly traded goods? The benefits of fair trade systems extend far and wide and aim to redress unethical or disadvantageous trading practices.
Here we’ll walk through some of those key benefits. We’ll also cover some of the most common questions people have about fair trade.
What products are fairly traded? Who promotes fair trade? Why is fair trade important?
Let’s start with how the movement began in the first place.
A Brief History of Fair Trade
According to the World Fair Trade Organisation, the fair trade movement started in the USA in 1948. A group of enterprising folk purchased needlework created by Puerto Rican craftspeople. Then they started importing the goods for the American public to buy.
The first American store devoted to fair trade products opened its doors in 1958. Over on our side of the Atlantic, Oxfam UK began importing crafts produced by Chinese refugees in the 1950s.
At the same time, similar movements were springing up all over Europe. Consumers gradually embraced the initiative over the years.
Nowadays, the concept of fair trade is recognised and supported by many. If you’ve ever received an Oxfam gift card or bought Fairtrade coffee, you’ve been involved.
Today, there are many fair trade initiatives, organisations, and governing bodies. They all help to make sure producers in economically depressed or marginalised countries get a fair deal for their work.
Often, these countries are situated in the global South. To understand why this is so, it’s helpful to look at fair trade as part of decolonisation.
Decolonisation is an ongoing project. It involves remedying the wrongs committed during the lengthy colonial era. And fair trade is a large part of that remedy.
The Advantages of Fair Trade
At the simplest level, fair trade systems do exactly as the name suggests. They generate trading agreements that are fair to producers. This means that workers get paid a fair price and can afford a better quality of life.
But there are also a few advantages of fair trade that you might not have considered.
Changing World Trade Patterns
Globalisation means that countries around the world are increasingly interdependent.
We can roughly divide trading partners into two groups. LEDCs (less economically developed countries) and MEDCs (more economically developed countries). As mentioned above, many LEDCs are in the global South.
Traditionally, richer countries pay producers in LEDCs as little as possible. This helps rich countries drive up their profit margins and become even richer. In return, MEDCs export valuable, expensive goods. And that means even more money in the bank.
The disparity in purchasing power makes escaping from this system very hard. Many people involved in industry in poorer locations are caught in the cycle.
Commentators place these trade patterns within a form of neo-colonialism. That is, the means may have changed, but the overall system remains in place.
Under fair trade, producers in LEDCs are guaranteed a fair price for the product they export. Often, the goods LEDCs sell have a set price. This means that producers and their workers are protected. They’re not adversely affected by fluctuating prices in the nations where their products are resold.
Fair trade means increased financial benefits for LEDCs. So fair trade agreements go some way toward changing traditional systems of global trade. This makes it easier for LEDCs to operate on the global stage they were once excluded from.
Ethical Business Is Rising
Another of the advantages of fair trade is the rise of ethical businesses. With more awareness raised over David and Goliath trade systems, consumers in MEDCs are more informed on unethical trade.
The increasing number of mindful consumers actively seek out companies and products which are aligned with an ethical stance.
This stance doesn’t always relate to financial benefits either. For example, a mass boycott of Nestle took place in the 70s and 80s after the publication of a damning exposé.
MEDC citizens engaged in the boycott (and new generations still do). They disagreed with Nestle’s aggressive marketing of breast-milk substitutes in LEDCs.
Nestle pushed formula on poorer mothers despite widespread proof that breast milk is better for infants. The company’s tactic here was to introduce formula under the guise of humanitarian aid. Afterwards, it sold the milk to mothers in LEDCs. Many of these mothers didn’t have the clean water necessary to mix formula.
Today, consumers desire greater transparency from companies. Ethical business as a sector is growing nearly eight times faster than the economy as a whole.
Companies who once utilised child labour or took part in other unsavoury practices are now in the spotlight. Thanks to the pioneering efforts of fair trade as a whole, ethical business practices and brands doing social good are rising.
Empowerment
LEDC producers are more engaged in the global trade system under fair trade. Because of this, they are better equipped to compete at the international level. This empowerment has a knock-on effect on workers and the community as a whole.
It may also engender a situation whereby LEDCs can avoid being trapped in an aid cycle with MEDCs. These cycles are, to many commentators, infantilising and exploitative in nature.
Fair Trade and Fairtrade, What’s the Difference?
The difference here is between a principled system of trade and an organisation upholding that system.
Fair trade as a system aims to redress unethical and disadvantageous trading practices between MEDCs and LEDCs.
Organisations support these aims. The most well-known of which is Fairtrade, a name now synonymous with the movement. Fairtrade isn’t the only promoter of ethical trading, though.
Which Organisations Promote Fair Trade?
- World Fair Trade Organisation
- European Fair Trade Association
- Make Trade Fair
- Eco-Social
- Rainforest Alliance
These are just a few of the major organisations which play a role. Many smaller initiatives have sprung up over the years. Some UK supermarkets have even started their own fair trade certifications, with varied results.
What Products Are Fairly Traded?
If you’d like to get involved and buy more fairly traded products, it’s simple to do so. If you’re looking for gifts and non-perishable goods, try visiting your local Oxfam fair trade shop.
In the supermarkets, look out for products labelled as fair trade by a governing body. Fairtrade’s distinctive blue, green, and black logo endorses around 4,500 products in total. Fair trade foods include:
- Coffee
- Tea
- Bananas
- Chocolate
- Grains and cereals
- Herbs and spices
- Nuts
The UK supermarket Aldi also stocks Fairtrade wine. Argos sells Fairtrade gold, including wedding and engagement rings.
The Benefits of Fair Trade to Global Trade and Humanity
Fair trade as a system is rooted in progressivism. The benefits of fair trade are widespread and multifaceted. Fair trade promotes greater accountability of the actions of multinational companies.
Buying fairly traded goods means you support global trade. Trade that isn’t skewed in favour of rich nations. It also means your money goes toward a global shift that enables ethical business practices.
People all around the world enjoy the benefits of fair trade. You can help by making some simple shopping swaps.