A Brief History of Fair Trade Taylor Francis

A Brief History of Fair Trade © Taylor & Francis 2011 Coffee Culture: Local Experiences, Global Linkages

What is Fair Trade? • Fair trade refers to an alternative marketing strategy that aims to mitigate the inequitable trade relationships that have come to characterize the world economic system. • It encompasses a philosophy, a movement and a network © Taylor & Francis 2011

The Philosophy Economic relationships should support a more equitable and sustainable world © Taylor & Francis 2011

The Movement • Everyone who supports fair trade is part of the movement © Taylor & Francis 2011

The Network Consists of non-governmental organizations, labeling initiatives, entrepreneurs, businesses, cooperatives, producer organizations, and other entities that promote and participate in fair trade. The network is informal but shares similar principles. © Taylor & Francis 2011

Political Antecedents of Fair Trade • Many politicians and scholars felt that global economic inequities contributed to WWII • They proposed constraints on free trade to help developing countries’ economies – Bretton Woods Accord (1944) – Havana Charter (1948) – Import Substitution Industrialization (ISI) • These constraints failed to restructure global inequities but did help many countries make progress © Taylor & Francis 2011

Emergence of Alternative Trade Organizations (ATOs) • ATOs began to emerge after WWII • Activism for fair trade among socially conscious individuals, church groups and social justice organizations • Occurred synchronously with ISI initiatives and UNCTAD support for regulated trade © Taylor & Francis 2011

Overseas Needlepoint and Crafts Project (ONCP) • Edna Ruth Byler visited Puerto Rico in 1946 • Brought Puerto Rican women’s crafts to the USA and returned the sales money to the women • Aimed to mitigate poverty • Founded the ONCP • Gained support from the Mennonite Church • ONCP became SELFHELP crafts and then Thousand Villages © Taylor & Francis 2011

Equal Exchange • Founded in 1986 by concerned consumers • Troubled by the ramifications of industrial food production for society and health • Committed to fair prices and healthy food • Started by importing organic coffee © Taylor & Francis 2011

Max Havelaar • A Dutch NGO, Solidaridad, established first fair trade criteria in 1988 • A Mayan cooperative asked Solidaridad for help selling its coffee at fair prices • Solidaridad created the Max Havelaar brand to sell fair trade goods, beginning with coffee © Taylor & Francis 2011

Trade Not Aid • By 1980 s, influence of neoliberal economics led to end of regulated trade initiatives • Fair traders decided to position fair trade as an option within the free trade system, not an effort against it • Fair trade businesses adopted slogan “Trade not Aid” to distinguish themselves from charity © Taylor & Francis 2011

World Fair Trade Organization • Began in 1989 as the International Fair Trade Association (IFAT) • First umbrella organization to unite and coordinate diverse fair trade businesses and organizations • Shared set of principles and criteria • Commitment to 100% fair trade • Members include Ten Thousand Villages and Equal Exchange © Taylor & Francis 2011

Fair Trade Labelling Organization (FLO) International and FLO-CERT • Formed in 1997 as a second major umbrella organization for fair trade organizations • Aimed to coordinate and certify members • Designated “Fairtrade” name to distinguish itself • Established FLO-CERT in 2004 to take over certification as membership grew • Does not require 100% fair trade among members or products © Taylor & Francis 2011

Transnational Corporations (TNCs) Enter Fair Trade • Advantages: – Increased market for fair trade goods • Problems: – Cooptation of fair trade – Blue-washing © Taylor & Francis 2011

Contradictions with TNCs in Fair Trade • TNC involvement in fair trade has diluted the meaning and goals of fair trade • Fundamental contradictions: – Fair trade is committed to fair prices and social equity while TNCs are committed to making as much profit as possible – TNCs can sell goods as fair trade by buying from fair trade intermediaries (e. g. , Transfair USA) without changing corporate practices © Taylor & Francis 2011