• The Problems of Free trade
• What is Fair Trade & Fair Trade Movement?
• The History
• The Fair Trade Standards
• Why do we need Fair Trade?
• Fair Trade Criteria include
• Benefits of Fair Trade
• Ten Reasons to Support Fair Trade

The problems of free trade

When we think about the problems surrounding developing countries, we can find two important points. One is ODA (Official Development Assistance) causes developing countries to take on a great deal of debt, and the debt produce poverty. The other point is that free trade is controlled by multinational corporations. Both points are based on the North-South problem, which was begun in the colonial period. Also, we should keep in mind that the system of free trade always works to bring big benefits to both the rich people in the developed countries and the rich people in the developing countries. The world market is controlled by multinational corporations. They took over the trade networks that had been developed during the period of the slave trade under European domination in the colonial period. Therefore, people who live in developing countries produce primary products for developed countries, and developed countries invest capital in developing countries and teach them industrialized agricultural techniques. Developing countries offer natural resources and cheap labor to the developed countries. In fact, it is difficult for the people who live in the South to change the systems of world trade (the structural control), so developing countries are controlled by the power of free trade and capitalism.

Since the multinational corporations are able to control both the market side and the production side, they need natural resources in developing countries and a cheap labor force in both countries. Also, they need the rich markets in both sides to sell their products. This cleavage in society between the rich and the poor not only brings big benefits to multinational corporations, but also it also aggravates the difference between the rich and the poor. Now, several big multinational corporations transfer their products from country to country within their own corporations, and they have begun to control farm products. Fair trade is one method to solve the inequalities of this structural control system.

What is Fair Trade & Fair Trade Movement?

Fair Trade is an alternative system of international trade that is built on a system of right relationships that respect human dignity, promote economic justice and cultivate global solidarity.

Simply, Fair trade means that producers receive a fair price for their product. But fair trade goes beyond a simple economic transaction. Fair trade promotes sustainable solutions to poverty reduction, which take into account community development, gender equity and protections for the environment. To obtain fair trade certification, a product must meet nine certain criteria strictly, which are independently monitored.

Fair Trade is a trading partnership, based on dialogue, transparency and respect that seek greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South.

The Fair Trade movement today is a global movement. Over a million small – scale producers and workers are organised in as many as 3,000 grassroots organisations and their umbrella structures in over 50 countries in the South. Their products are sold in thousands of World – shops or Fair Trade shops, supermarkets and many other sales points in the North and, increasingly, in sales outlets in the Southern hemisphere. The movement is engaged in debates with political decision – makers in the European institutions and international fora on making international trade fairer. And Fair Trade has made mainstream business more aware of its social and environmental responsibility. In short: Fair Trade is becoming increasingly successful. There are nine standards of fair trade.

The history of fair trade

The idea of fair trade was born in the 1940’s in the U.S. as an alternative form of trade. It was started by NGOs that were working toward international cooperation. In the U.K., in the late 1950s Oxfam started an aid project to support people who lived in developing countries. It was called Helping by Selling. This means that NGOs in the developed countries bought the products, which were made in developing countries, and then they sold them to consumers in developed countries. The main purposes were aid and international cooperation.

However, in the 1960’s many countries in Africa became independent, and UNCTAD (United Nations Conference on Trade and Development) was held in 1968. This conference decided on a new slogan “trade, not aid”, which was proposed by people from developing countries. This slogan was intended to show that the most important thing for developing countries was financial independence from developed countries.

Fair traders realize that the real victims of world trade are the people who live in the developing countries. In addition to this problem, there is the North-South problem, which had started in the colonial period. Then the meaning of fair trade changed, and the fair trade movement has started to try to improve existing trade.

In the 1990’s the fair trade movement emphasized a reformation of consumers ideas in the developed countries. And many campaigns and lobbies were held. In Europe, 11 groups in 9 countries established the EFTA (European Fair Trade Association), and also 100 groups in 45 countries all over the world established the IFAT (International Federation for Alternative Trade) at 1989.

The Fair Trade Standards

• Creating Opportunities for economically disadvantaged producers: The aim of the fair trading organisation should be to reduce poverty through trade and help the marginalised producers to change their position from vulnerability to security and from material poverty to income & ownership.
• Transparency and Accountability: It must be accountable to all its trading partners and stakeholders and should maintain confidentiality of commercial information supplied.
• Capacity Building: This standard directs the organization to develop producers' skills in order to build their capacity and improve their situation financially and socially.
• 04. Promoting Fair Trade: This standard endeavors to raise awareness of the concept Fair Trade & achieve greater justice in world trade through Fair Trade. The fair traders should advocate the objectives & activities of Fair Trade.
• Payment of Fair Price: A fair price, which provides fair pay to the producers and is also sustained by the market, must be delivered by the organization to the artisans and should follow the principle of equal pay for equal work by women and men.
• Gender Equity: The practice of equal opportunities for women and men to develop their skills needs to be present at the organization. Women empowerment is specially encouraged through this standard.
• Working Conditions: The workplace needs to be totally in accordance with the health safety and the working hours must follow the conditions established by the law and ILO Convention.
• Child Labour: This standard emphasises on the UN Convention on The Rights of the Child if there is any children working for the fair trading organisation.
• The Environment: It signifies the use of eco-friendly technologies, initiatives to reduce energy consumption and create awareness of environmental hazards.

Why do we need Fair Trade?

One quarter of the world's population lives in absolute poverty. Many of the world's poorest people are farmers and plantation workers, producing basic commodities like corn, rice, and coffee. These people work very hard, but they can't get a fair price for what they produce. Take for the industrialized product. Think of how much you pay for one cheap product which usually produced by the domestic producers earlier. What will happened to the marginalize producer of the third world producer who have no place to use his traditional knowledge for their sustainability. When the world goes without them, they should have some thing to do. Being Workless-ness or not getting fair price means they won't have enough money to keep their kids in school or not be able to feed their families. With few alternatives, many producers are trapped in a cycle of poverty. One way you can help break this cycle is to buy products that are Fair Trade Certified™. By buying Fair Trade goods, you ensure that the producer gets a fair wage, has a long-term, direct relationship with a buyer, has access to credit and is encouraged to use environmentally friendly techniques.

Fair Trade Criteria include

• Paying a fair wage in the local context
• Offering employees opportunities for advancement
• Providing equal employment opportunities for all people
• Engaging in environmentally sustainable practices
• Being open to public accountability
• Building long-term trade relationships
• Providing healthy and safe working conditions within the local context
• Providing financial and technical assistance to producers whenever possible
• Ensuring that there is no abuse of child labor

Benefits of Fair Trade:

• Values and preserves traditional cultures
• Generates fair income for thousands of artisans around the world
• Educates consumers about trade and cultures
• Promotes people-to-people ties among artisans, traders, and consumers
• Gender equity: 70% of craft artisans are women
• Provides resources for education, health care, and community development
• Promotes environmental stewardship
• Supplements income in between harvest cycles, when rural communities most need income
• Promotes democratic participation in cooperative group structures
• Ensures that artistic technologies in indigenous cultures are passed on to the next generations

Ten Reasons to Support Fair Trade

1. Use your consumer power to help others

World poverty can seem like an overwhelming problem. What can one person do? By buying Fair Trade Certified™ products, you can turn an everyday action, like shopping, into something that helps reduce poverty and gives farmers and producers a fair price for their product.

2. Support Education

Many farmers earn so little for their crops that they can't afford to send their children to school, and their children must work to help support the family. Fair Trade Certified™ goods provide a living wage to farmers and artisans, helping kids can stay in school and get an education.

3. Empower Women

   Fair Trade encourages women's leadership in cooperatives and supports programs that benefit women. For example, in the Mexican state of Oaxaca, the CEPCO coffee cooperative has set up an innovative program to help women coffee farmers, providing training in coffee cultivation and processing, as well as other important livelihood activities. These programs have helped make significant improvements in the lives of the participating women.

4. Keep Families Together

With today's low coffee prices, small farmers and coffee pickers who are not connected with fair trade are fleeing rural areas in search of work. Women and children are left behind to tend the fields and pick the coffee, and kids are taken out of school. Farmers who grow fair trade products, in contrast, earn a living wage that helps pay for their expenses, invest in the future, and keep families together.

5. Support Community Development

   Fair Trade producers and workers belong to cooperatives and community development organizations that invest in better housing, health programs, schools, and scholarships. For example, the Costa Rican coffee cooperative COOCAFE uses fair trade revenues to fund improvements in 70 local schools and has provided 6,700 scholarships to students so they can attend high school and university.

6. Protect the Environment

Fair trade supports small farmers who use land more efficiently and in a more environmentally friendly way. Traditional small coffee and cocoa farms contain many species of crop, shade and fruit trees. Fruit trees provide habitat for songbirds and help prevent topsoil erosion and mudslides. Fair trade helps farmers make the transition to organic farming and the use of more sustainable techniques.

7. Promote Democracy

Fair Trade producers and workers belong to democratically-run cooperatives or community organizations. To function successfully, these cooperatives must be open and transparent in their operations. This helps foster grassroots democracy in many countries where many citizens have little experience participating in the democratic process.

8. Provide a Long-term Solution

One of the tenets of fair trade is that buyers and producers build long term partnerships. Unlike aid, which is dependent on donors, fair trade offers a more sustainable way for farmers, artisans, and their families to improve their livelihoods.

9. Prevent Illegal Drug Crops

Low coffee prices mean than many coffee farmers cannot make a living on growing coffee alone. This has pushed many coffee farmers to start growing crops destined for the illegal drug trade. Coca, the plant from which cocaine is derived, and chat, an amphetamine-like stimulant, are more dangerous to grow, but are more lucrative for small farmers. By providing a fair price for their coffee, fewer farmers need to switch to growing coca or chat.

10. Promote Economic Stability

In most developing countries, the majority of the workforce is engaged in agricultural activities. Buying Fair Trade Certified™ helps to support small-scale agriculture. This can increase a country's food security making it less dependent on foreign imports. The extra income from fair trade products can also help stimulate rural economies.