What is Fair Trade?

Fair trade is the idea that when we engage in free trade we think about the people behind the products we're buying. In the same way that organic food has gotten us to think about what is in our food, fair trade asks us to think about who makes our products. In the global supply chain, it's usually the laborers physically making the products that are paid the least. With fair trade, we make sure the producer receives a fair percentage of the total. In the end, fair trade will only work if, we as consumers, choose to purchase products made in an ethical way. We have tremendous power as consumers to shape the way the world does business. Fair trade ensures that everyone is treated with dignity and respect and that is a great investment. Watch our movie Fair Trade is You.

A Little History on a Big Idea

The fair trade movement originated in Europe over 40 years ago. The fair trade mission is to create sustainable incomes for poor and disadvantaged producers by:

• providing a living wage,
• maintaining stable, long-term trade agreements, and
• improving working conditions through education, campaigning and creating access to outside markets.

Today, the majority of low-income producers are workers in Latin America, Africa, Asia and the Caribbean. Unfortunately, free trade agreements such as NAFTA, APEC, and WTO do not protect workers and the environment. In India, for example, millions of people have been employed as garment workers for far-below minimum wage. This practice is tolerated, since the market for workers' traditional crafts has been all but eliminated, and their options for creating income grow increasingly limited.

Fair trade values are making their way to the US as consumers become increasingly concerned about the origin of their products. In 2000, fair trade sales in North America totaled $100 million. Today, fair trade annual sales have grown to $350 million. While gaining momentum and awareness, the demand for fair trade is still less than 1% of the total $55 billion giftware industry. Every time we choose fair trade, we choose to empower rather than exploit.

World of Good Fair Trade Sourcing Criteria

As a fair trade organization and a member of IFAT, the International Fair Trade Association, World of Good is committed to operating our business in compliance with the highest possible standards of fair trade. In addition to abiding by IFAT's ten standards of fair trade, we have created our own sourcing criteria, outlined here:

1. Pay a fair wage in the local context to the artisan. World of Good: Development Organization, our sister non-profit, has created a revolutionary Fair Wage Guide that calculates a fair price in the local context.
2. Purchase from cooperatives, non-profit organizations or directly from the artisans whenever possible. If using an intermediary, ensure that a fair portion goes back to the artisan.
3. Provide employment without discrimination, and strive to create employment opportunities for women and the most disadvantaged communities.
4. Ensure that all artisans have access to a safe and clean work environment, whether it is a workshop, a community meeting space, or their own homes.
5. Guarantee that no child labor is used in production – unless the entire family is involved in the craft and the children are still attending school.
6. Engage in long-term trading relationships to promote sustainable economies. Increase economic stability by paying 50% up front to underwrite materials and production costs.
7. Follow environmentally sustainable production practices whenever possible: encourage artisans to select local raw materials, harvest them sustainably and use renewable energy. Avoid processes that require artificial chemicals.
8. Provide technical and financial assistance to artisans, including market information, product development, and 50% pre-financing to underwrite materials and production costs.
9. Maintain business practices that are open to public scrutiny, and make every effort to be as transparent as possible.
10. Reinvest a portion of World of Good's profits to support and strengthen the social and economic conditions in the producer communities.

In addition to our work to reinforce fair trade standards at the organizational level and as part of our ongoing commitment to improving and innovating new standards and systems for fair trade, World of Good is working with IFAT to develop the world's first product-level certification for handcrafted goods. Currently, there is no such system in place for products like jewelry, housewares, and apparel, as there is for commodities like chocolate and coffee. With the support of the Fair Wage Calculator – developed by our sister nonprofit organization, the World of Good Development Organization – and in partnership with our friends at IFAT, we hope to roll out a selection of fair trade certified products to market within the next two years, as well as a system behind it that empowers our corporate peers to do the same.