History of Fair Trade

The fair trade concept can be traced back to the beginning of last century, when religious groups and politically oriented NGOs decided to help poor communities around the world by incorporating them into the global trading system. This concept took a formal shape in Europe in the 1960s, gaining international recognition when the slogan at the time, “Trade not Aid”, was adopted by the UNCTAD (United Nations Conference on Trade and Development) to promote fair trade relations with the developing world.

In the beginning, fair trade was almost exclusively about handicrafts such as jute bags. During the 1980s, however, these products lost their innovation and appeal, and fair trade organizations decided to move towards agricultural products. This is because many countries depended on the export of three or less key agricultural products, many of which were facing plummeting prices. Although in 1992, 80% of the fair traded goods were still handcrafts, by 2002 food products comprised almost 70% of the fair trade market. (Nicholls, A. & Opal, C. (2004). Fair Trade: Market-Driven Ethical Consumption. London: Sage Publications.)

Another challenge that fair trade faced during the 1980s was the reduction in demand of the products within the “World Shops”, where products were usually found. Non-profit organizations and NGOs started an informal labeling process, with the hopes that they could sell fairly traded goods in mainstream shops and retail locations, and still carry the humanitarian appeal with them. This solution proved successful, and in 1997, fifteen European countries, the US, Canada, Japan, Australia and New Zealand decided to converge all of their labeling organizations under one umbrella called FLO International (Fair trade Labeling Organizations International).

In 1989 the IFAT (International Fair Trade Association, now known as the World Fair Trade Organization) was created to unite producers, wholesalers, retailers and consumers involved in fair trade in Asia, Africa, Europe and Latin America. This provided a networking organization for the exchange of ideas and for the promotion of fair trade commerce. As of today, all members of IFAT/WFTO can display a new mark to be identified with fair trade worldwide.

In 2002, FLO had launched a new “International Fairtrade Certification Mark”. The goals of the launch were to improve the visibility of the mark on supermarket shelves, facilitate cross border trade and simplify export procedures for both producers and exporters.

In an effort to complement the Fair trade certification system and allow for example, handicraft producers to also sell their products outside World Shops, the World Fair Trade Organization (WFTO), launched a new Mark to identify fair trade organizations in 2004 (as opposed to products in the case of Fair trade). Called the FTO Mark, it allows consumers to recognize registered Fair Trade Organizations worldwide and guarantees that standards are being implemented regarding working conditions, wages, child labour and the environment.

As per Wikipedia, global fair trade sales have soared over the past decade. The increase has been particularly spectacular among Fair trade labeled goods: In 2007, Fair trade certified sales amounted to approximately €2.3 billion (US $3.62 billion) worldwide, a 47% year-to-year increase. As per December 2006, 569 producer organizations in 58 developing countries were FLO-CERT Fair trade certified and over 150 were WFTO registered.

Fair Trade continues to gain popularity in Europe, North America, Australia & other effluent countries, as consumers begin to ask where their products come from, what they are made of, and if their purchases will make a difference in the world. This behavior has been named by some as “social consumerism”, where people look to buy products from ethical companies and want to support good causes.