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26 Jan

What Is Fair Trade? And Why Does It Matter for Fashion?

Most people have probably heard about fair trade or have seen certifications on various products. Maybe you even grabbed a fair trade coffee on the way to work this morning. But what about fair trade fashion? Keep reading to learn more about the fair trade movement and why it’s important.

Are fair trade and Fairtrade the same?

There is fair trade, and then there is Fairtrade. The term “fair trade” refers to the general movement, which encompasses many different organisations with the shared aim of supporting producers and protecting workers’ rights and the environment. Fair trade describes a brand or an individual product that has been certified and labelled by an independent organisation because it meets specific standards.

Fairtrade, on the other hand, specifically refers to the certifying and labelling organisation Fairtrade International, which is the peak body for over 25 country-based Fairtrade labelling organisations. Each of these certifies products, allowing them to display the famous Fairtrade logo. On top of that, brands can choose to belong to organisations such as the Fair Trade Federation and the World Fair Trade Organisation.

Why fair trade?

To understand why fair trade is important we first need to examine some background on where this need came from. Why do we need special independent groups to get together and negotiate contracts between producers and traders? Why do we need auditing, certifications, and labelling?

Moving from “free” to “fair”

Aside from fair trade, we often hear talk of free trade. Unfortunately, free trade, as promoted by governments today, is often highly detrimental to workers around the world. Free trade agreements remove a country’s right to protect its workers through tariffs without necessarily providing any compensating benefits. Tariffs can be used on imported goods that are much cheaper than domestic prices. Cheap imports can drive down the price of a commodity within a given country and cause hardship and poverty among farmers and workers.

Although the economics behind this can be complicated and depend on specific circumstances, all too often the impact has been to allow multinational corporations to cherry pick lower-income countries in order to reap the benefits of cheap labour. Fair trade is a response that aims to ensure farmers and workers are not forced into poverty as a result of the pressures of unfettered international trade.

Why is fair trade important?

By buying fair trade products, you are helping to alleviate poverty in lower-income countries, ensuring that workers are being paid fairly, are working under humane conditions, and have sufficient labour rights, as well as encouraging more sustainable methods of production.

Supporting producers

Fair trade brings products from low- and lower-middle income countries (LMICs) into higher income economies. A minimum price is agreed on in advance to make sure that producers will be able to earn a living wage. This protects producers from market fluctuations that can cause prices to drop below production costs. This is a common problem in the conventional marketplace, and the 2022 drop in cotton demand and prices is just one example of how market fluctuations can impact producers.

Most fair trade groups also use and promote long-term contracts, which are meant to provide stability for producers. Some associations like Fairtrade International also charge a premium on top of the minimum set price, which is given back to the producers and invested in their communities, for example, in healthcare or education.

Ensuring workers are treated and paid fairly

Working conditions are audited by a certifying body to ensure that safety and health standards are being met, child and slave labour are strictly banned, and workers under fair trade have a protected right to organise and unionise.

Helping protect the environment

The fair trade movement emphasises the importance of protecting the environment. Without fair trade agreements, foreign companies can and do invest in farming and production in lower-income countries with little regard for environmental sustainability. One long-term and high profile example of the damage that can be done is the leather industry contributing to the deforestation of the Brazilian Amazon, with the rainforest increasingly being slashed and burned to create more grazing space for cattle. Sometimes it’s local industries that cause environmental damage out of desperation to cut costs and keep afloat in an increasingly competitive market. Because of this reality, fair trade initiatives have stressed the importance of enforcing more sustainable practices. These practices include water conservation, restricting various chemicals, prohibiting genetically modified organisms, encouraging biodiversity, and ensuring waste is responsibly disposed of.

Some good news

The realities of the conventional marketplace are a true nightmare. But there is a real shift happening. Consumers are increasingly interested in where and how their goods are produced. In fact, according to the Economist Intelligence Unit report commissioned by WWF, there was a staggering 71% rise in online searches for sustainable goods globally from 2016-2021.

There is a massive and exciting movement toward selling and buying more ethically made products. And no, these systems and organisations are not perfect yet. Each has its flaws, but it is the demand for fair trade that is most crucial and most encouraging right now.

There is growing public concern over the ways our commodities are produced. As a consumer, you have the ability “to put your money where your mouth is” and buy products that more closely reflect your values. And fair trade is just one way to make that task a little easier.

Discover our favourite fair trade clothing brands

Editor's note

Feature image via Unsplash. Good On You publishes the world’s most comprehensive ratings of fashion brands’ impact on people, the planet, and animals. Use our directory to search thousands of rated brands.

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