What Is Fair Trade?

What is fair trade

Over the past several decades, the term “fair trade” has evolved from a niche concept, most often recognized by those who align themselves with social justice or the green movement, to a more commonly spotted label that helps build trust for mainstream consumers and show them that a product is responsibly made. You probably see fair trade labels on food, coffee, and tea, but these labels can also be found on clothing, accessories, gifts, home goods, furniture, and more. So what does fair trade actually mean? And how do fair trade production practices differ from conventionally produced products?

In this article, we’ll explain the guiding principles behind the fair trade movement, a few of the biggest international organizations that both certify and verify producers and brands, as well as explain how Made Trade defines fair trade, and why it’s one of our seven core values.

Fair Trade Principles

Across the major fair trade certifying and verifying organizations around the world — such as Fair Trade Federation, World Fair Trade Organization, and Fair Trade USA — there are several guiding principles that all agree on:

  • Supporting global trade that puts people and the planet first
  • Providing fair, living wages
  • Providing healthy and safe working conditions
  • Sourcing materials as responsibly and sustainably as possible

Fair Trade organizations verify and certify companies that work with producers, artisans, farmers, and workers around the world, most often in the Global South, to assess their production and sourcing practices and commitments to the fair trade principles listed above. These organizations visit production sites in-person through third-party audits, assess supply chains in detail, and/or have companies complete self-reported applications to assess their production and sourcing practices.

The spaces in which fair trade products are made can vary widely — hundreds of workers being employed at a large-scale garment factory, a small coffee farmer cooperative, or even a group of weavers working out of their homes. Accordingly, the process of verifying or certifying products made in these distinct conditions has to be tailored to the setting and the circumstances specific to how and where the product is made. For example, Fair Trade Federation has a verification process that is self-reported to assess companies that produce, buy, or sell products across clothing, home goods, accessories, shoes, furniture, and even musical instruments. Most often, these products are made by small-batch makers and artisans who work out of their homes or small workshops rather than a formal factory-like setting. Fair Trade USA, on the other hand, primarily certifies producers or traders of food products such as produce, chocolate, coffee, and seafood, but they also certify garment factories and are continuing to expand their reach across new industries. Their certification process often involves a third-party audit, assessing the production or manufacturing site in-person, which can take many months to complete.

Fair trade contributes to sustainable development by offering better trading conditions as well as securing the rights of marginalized producers and workers. Backed by consumer advocacy, fair trade organizations are actively engaged in supporting producers by also raising awareness about harmful and exploitative industry norms, and campaigning for changes in the rules and practices of conventional international trade. 

But fair trade in its truest form, according to the World Fair Trade Organization, is about more than just trading:

  • It is a vision of business and trade that puts people and planet before profit.
  • It fights poverty, climate change, gender inequality, and injustice.
  • It is a proof of concept that showcases the enterprise models of the new economy.

Fair Trade on Made Trade

Made Trade recognizes both Fair Trade Certified and Fair Trade Verified brands and organizations. We also apply a broader context to the products we carry and apply Made Trade’s Fair Trade icon when a brand or company is meeting fair trade guidelines, works with fair trade suppliers, or is in the process of becoming certified while already meeting global fair trade guidelines. We assess each brand and organization we work with carefully and individually through an application process to understand the full context of how they meet ethical production standards.

What is fair trade fair trade icon
Made Trade’s Fair Trade Value Icon​​

Fair Trade products carried on Made Trade are often handmade products made with heritage craft traditions, and they are always produced outside the United States according to international fair trade guidelines and fair labor practices, which we assess during our application process. For a product on Made Trade to be labeled as Fair Trade, the makers and artisans employed to make the product were paid a living wage and provided with safe and healthy working conditions. Whenever possible, the materials used to make the product are sourced locally to the region where the product was manufactured and eco friendly practices were used in the manufacturing process. In addition to Made Trade’s other six values — Sustainable, Heritage, Vegan, Made in USA, and Women-Owned / POC-Owned brands — Made Trade works with brands that are fair trade certified, fair trade verified, and brands that follow fair trade guidelines.

Certifying and Verifying Organizations and What They Do

The Fair Trade Federation is a trade association of fair trade enterprises fully committed to equitable and sustainable trading partnerships. They strengthen and support their members in order to grow the global movement of trade that values the health of the planet and the labor, dignity, and equality of all people. As part of the global fair trade movement, the Fair Trade Federation shares a vision of a world in which justice, equity, and sustainable development are at the heart of trade structures and practices so that everyone, through their work, can maintain a decent and dignified livelihood. 

What is fair trade Fair Trade Federation Logo
Fair Trade Federation Logo​​

Fair Trade USA, or Fair Trade Certified™, is a USA-based organization that works with producers around the globe to insure products are produced according to rigorous standards that protect the well-being of farmers, workers, fishermen, and the environment. The products that have the Fair Trade Certified™ seal represent thousands of products, improving millions of lives, protecting land and waterways in 45 countries and counting. Purchases have sent $740 million to farmers and workers since 1998. According to Fair Trade USA, the fair trade market is growing because of businesses’ dedication to Fair Trade USA standards. As a result, consumer awareness of the Fair Trade Certified seal is at 63% — nearly double what it was in 2008. 

What is fair trade  Fair Trade USA (Fair Trade Certified) Logo
​​Fair Trade USA (Fair Trade Certified) Logo

Fairtrade International is part of a broad landscape of organizations working to make ethical and sustainable sourcing the norm. Their standards are a blend of social, economic, and environmental criteria that support the sustainable development of small producer organizations and agricultural workers in the Global South. Fairtrade International sets standards in accordance with the ISEAL Code of Good Practice on Standard Setting. Think of ISEAL like the certifier of the certifiers — they check that a certification scheme is credible and doing what it says it does. During this process, a wide variety of stakeholders are consulted, including farmers and workers, local governing bodies, subject-matter experts, businesses, non-profit organizations, and others, to ensure that we are taking a holistic approach. They don’t just hold farmers and workers to high standards, but also have standards for traders who buy and sell Fairtrade products and/or pay the Fairtrade price and premium. The Trader Standard outlines rules around the product composition, traceability, and use of the Fairtrade Mark on packaging. It includes requirements and voluntary best practices to ensure that Fairtrade products are traded in fair and sustainable ways that contribute to producer empowerment.

What is fair trade Fairtrade International Logo
Fairtrade International Logo​​

World Fair Trade Organization is the global community and verifier of social enterprises that fully practice Fair Trade. Spread across 76 countries, WFTO members all exist to serve marginalized communities. To be a WFTO member, an enterprise or organisation must demonstrate they put people and planet first in everything they do. The WFTO focuses on both social enterprise and Fair Trade. Its Guarantee System is the only international verification model focused on social enterprises that put the interests of workers, farmers, and artisans first. Through peer reviews and independent audits, WFTO verifies members are mission-led enterprises fully practicing the 10 Principles of Fair Trade across their businesses and supply chains. Once verified, all members have free use of the WFTO Guaranteed Fair Trade product label. The WFTO’s 10 principles of fair trade are:

What is fair trade World Fair Trade Organization (WFTO) logo
World Fair Trade Organization (WFTO) logo​​
What is fair trade

Certification vs. Verification

There are, of course, different degrees to which a product is certified or verified as fair trade. To be a Fair Trade Certified product or business, it means that a full third-party audit of the supply chain has happened. It usually costs more than a verification process, but is often more holistic in its approach. Fair Trade Certification is offered by agencies such as Fairtrade International, IMO Fair for Life, and Fair Trade USA.

Fair Trade Federation verifies businesses that are dedicated to holistic fair trade practices through a self-reported application designed to gather information about applicants’ commitment to fair trade in all facets of the business model, including the supply chain.

Fairtrade International uses FLOCERT to audit business practices and supply chains for their global certification body. They created and exclusively work with this third-party auditing company because independent unbiased verification is critical for transparency. FLOCERT has deep expertise in a wide variety of products, so they are able to not only assess if the Fairtrade standards are being followed, but they are also able to provide thoughtful feedback on improvements if nonconformities do arise.

Fair Trade USA, which offers the Fair Trade Certified™ label to farms, fisheries, and factories, has set an evolving list of standards for each of the industries they certify. The principles that guide those standards are income stability, empowerment, individual and community well-being, and environmental stewardship. 

Another certification that you’ll see on Made Trade, as well as other places where fair business practices and sustainability are at the forefront of their values, is GOTS certificationGOTS stands for the Global Organic Textile Standard, and it is an internationally recognized certification that inspects the entire textile supply chain, from field to fashion. When you see a brand or product is GOTS certified, it means the entire supply chain has been audited — so not only is the textile organic, but the labor practices are audited to ensure fair trade standards are met as well. 

Final Words on Fair Trade

While fair trade is often focused on creating sustainable jobs for marginalized, disadvantaged, and harder-to-reach producers around the world, Made Trade goes one step further and applies these principles to every product we carry. We vet every single brand we partner with by reviewing their sourcing practices and how they provide fair compensation regardless of where the makers or artisans are located. These principles guide our curation process no matter where a product is made, whether it’s thrown on a pottery wheel in Portland, Oregon or woven by hand in a small village in Guatemala. Ethical and sustainable sourcing are at the center of what we do, and fair trade principles are a very important component of how we operate. We believe fair trade principles should be assessed and upheld for all makers, producers, artisans, and workers regardless of industry or location.

Fair trade is just one of the ways we can elevate the conversation around fair compensation, healthy and safe working conditions, and equitable treatment for makers, artisans, producers, and farmers around the world. Purchasing a fair trade product is a vote for equity, health, and fair treatment for all people. 

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