Fair Trade Month - The Ethics of Global Production Systems

“Fair trade is about more than just paying a fair wage. It means that trading partnerships are based on reciprocal benefits and mutual respect; that prices paid to producers reflect the work they do; that producers share decision-making power; that national health, safety, and wage laws are enforced; that products are environmentally sustainable and conserve natural resources; and more.”
Rachel Spence, Director of Operations and Management, Fair Trade Federation

October is Fair Trade Month and the Fair Trade Federation (FTF) is working to raise awareness about the importance of fair trade to the global economy.

“The word ‘fair’ can mean a lot of different things to different people,” said FTF director of operations and engagement Rachel Spence when asked about the meaning of the term. With regard to global production, ‘fair’ goes way beyond the pricing of a product.

The Business of Fair Trade

Rachel Spence

FTF is a trade association of businesses committed to equitable and sustainable trading partnerships. The organization aims to grow the global trade movement in ways that honor the labor, dignity, and equality of the world’s people and the health of the planet.

Rachel Spence has been on the FTF leadership team for the past five years and is responsible for branding, communications, and engagement. She also works closely with executive director Chris Solt on long-term strategies. In 2020, Rachel and Chris were joined by membership manager, Alyssa Anderson.

With regard to the meaning of the term “fair trade”, Spence explained:

Fair trade is about more than just paying a fair wage. It means that trading partnerships are based on reciprocal benefits and mutual respect; that prices paid to producers reflect the work they do; that producers share decision-making power; that national health, safety, and wage laws are enforced; that products are environmentally sustainable and conserve natural resources; and more.

Nine Guiding Principles of the Fair Trade Federation

FTF promotes buying from businesses that are committed to fair trade and conduct business according to the following nine principles:

  1. Create opportunities for economically and socially marginalized farmers and artisans
  2. Develop transparent and accountable relationships with artisans and farmers
  3. Build capacity of farmers, artisans, and their communities
  4. Raise awareness by educating customers and producers, and inspire other businesses to adopt fair trade practices
  5. Pay promptly and fairly by discussing costs and pricing openly and honestly
  6. Support safe and empowering working conditions that are free of discrimination and forced labor
  7. Cultivate environmental stewardship by encouraging responsible use of resources and eco-friendly production
  8. Ensure the rights of children by never using exploitative child labor
  9. Respect the cultural identity of the farmers and artisans and celebrate diversity

A Commitment to the People: The Importance of Stakeholders

One of the main ways that FTF advocates for fair trade is through its membership program. Businesses that become members have essentially pledged their commitment to fair trade practices in word and deed. Spence shared, “Fair Trade Federation (FTF) membership means undergoing a deep investigation into the fair trade practices incorporated into every aspect of a business.”

To become an FTF member, businesses must demonstrate eligibility. Membership is open to U.S. and Canadian businesses that are in compliance with the nine principles listed above and:

  • Engage in a trade as their primary work
  • Source all products according to fair trade principles
  • Have been in operation for at least a year
  • Have an operational presence in the U.S. or Canada with sales taxes reported to the appropriate authority in the country of operation

The commitment to fair trade must also be embedded in an organization’s mission, structure, and daily operations. Spence explained that “As FTF members, business owners and employees demonstrate how they build fair trade practices into day-to-day operations and trading relationships.” This entails a shift in business mentality. “Due to this commitment, FTF members also model stakeholder primacy over the typical shareholder primacy,” she said.

How does a shareholder differ from a stakeholder?

In the shareholder model of business, profit is the goal of business operations with the interests of shareholders as central. In a stakeholder model, however, the well-being of producers takes center stage. Spence explained that,

With shareholder primacy, companies are legally compelled to maximize profit on behalf of shareholders; with stakeholder primary, FTF members must have strong internal systems for making business decisions that keep the well-being of producers as a central concern as well as decisions that are always consistent with all nine of the Fair Trade Federation Principles.

A Commitment to the Planet: Having Respect for the Land

“One of the biggest challenges to the fair trade movement is the ongoing global climate crisis,” Spence commented. Sadly, climate change has impacted the most vulnerable. “Marginalized communities,” she said, “such as those with which fair trade enterprises work, are often most at risk to be affected by climate change. FTF members actively work with communities to build resiliency and the responsible stewardship of resources.”

However, unscrupulous business owners have used this as a marketing tool to attract the business of concerned consumers. Spence commented that,

There are also many companies that participate in “greenwashing” and “fairwashing,” making false claims about their businesses and products that lead consumers to believe they are better for people and the planet. I encourage consumers to look into the businesses and products and especially support those who have third parties verifying their practices.

Fair Trade = Racial Justice

There is a direct connection between fair trade and racial justice. In fact, Spence explained that racial justice is a key element of fair trade and an important part of addressing injustices and inequities around the world. “Fair trade has always stood for non-discrimination, equity, and inclusion for artisans and farmers in the global south,” she said. “Fair trade practices also extend throughout the supply chain, including workers and communities here in the U.S. and Canada.”

In fact, working for racial justice is implicit in membership in the Fair Trade Federation as it is embedded in the FTF principles. The Fair Trade Federation principles explicitly state that members work to eliminate discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, age, marital, or health status. Hence, Fair Trade Federation members fully commit to the FTF principles through all of their work.

The FTF also has a permanent standing Justice, Equity, Diversity, and Inclusion (JEDI) committee. JEDI works to integrate the principles of social justice and inclusion to further the FTF’s mission and vision. The committee also focuses on incorporating equity and justice into the way the FTF, its members, and the movement grow and commits to leading anti-racism and decolonization work in fair trade.

So, what kinds of advocacy efforts are needed to promote global production practices that support economic development while safeguarding the environment and respecting individuals and communities around the world?

Spence left us with this:

As a global movement, fair trade brings attention to people around the world who work under exploitative conditions and highlights the true costs of goods to both people and the planet.

From consumers to activists to brands to farmers and artisans, it takes advocacy from all across the supply chain to bring greater balance to the terms of trade and to share in the risks/rewards as well as power in decision making.

Fair Trade Month Resources

FTF encourages participation in the month-long celebration through educating and spreading the word about fair trade with quotes, graphics, and blog posts; purchasing from FTF members when shopping online; finding and supporting an FTF-verified store or café in your local community; buying from an FTF wholesale supplier; and advocating for racial justice alongside fair trade.

Check out FTF’s Fair Trade Month webpage for more information.

Cevia Yellin
Cevia Yellin

Cevia Yellin is a freelance writer based in Eugene, Oregon. She studied English and French literature as an undergraduate. After serving two years as an AmeriCorps volunteer, she earned her master of arts in teaching English to speakers of other languages. Cevia's travels and experiences working with students of diverse linguistic and cultural backgrounds have contributed to her interest in the forces that shape identity. She grew up on the edge of Philadelphia, where her mom still lives in her childhood home.

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