Fair trade is a social movement and market model that aims to empower small-scale farmers and consumers in underdeveloped countries to create an alternative trading system that supports equitable trading, sustainable development and long-term trading relationships. Fair trade supports fair prices and wages for producers, safe working conditions, investment in community development projects, and the elimination of child labor, workplace discrimination and exploitation.
Certified fair trade products now represent a multi-billion dollar industry with over 10,000 products in the marketplace. Consumer demand for fair trade products has steadily risen over the course of the last decade thanks to the tireless work of dedicated advocates, fully committed companies, and students.
On September 15th, Fairtrade International (FLO) and Fair Trade USA (FTUSA) jointly announced that FTUSA is resigning its membership in FLO, effective December 31, 2011. FTUSA's resignation from the FLO system is partially due to its new initiative, "Fair Trade For All" (http://fairtradeforall.com/) which it claims will "double the impact" of fair trade by 2015.
In an open letter, Rob Cameron, CEO of Fairtrade International, wrote: "I, the staff at Fairtrade International, and the entire global Fairtrade network sincerely regret FTUSA's decision to pursue its own approach, rather than continue working within the global system. It is a decision they have taken themselves, and we have to respect their choice."
Fair Trade USA's move raises many questions for fair trade producers in the Global South. Many producers rely heavily on the US market for sales and distribution. FTUSA's rash exit from the FLO system will most certainly cause chaos in the near-term as FTUSA has failed to publish its own standards or details regarding its new labeling scheme. In the long run, everything from consumer apathy to competing labels that make similar claims will undermine the fair trade market and the overall positive impact for producers.
At its core, "Fair Trade For All" is FTUSA's unilateral decision to initiate certification of Fair Trade coffee on plantation and hired labor operations. FTUSA intends to open other commodities, like cocoa, to plantation and hired labor for certification as well. Fair trade was established on the values of supporting small-scale, disenfranchised farming communities, most often organized in democratic cooperatives. Despite claims to the contrary, hundreds of thousands of small producers organized in cooperatives still lack access to fair trade markets. To continue to make progress and expand the benefits of fair trade, these producers must be given priority and support when considering further expansion of the fair trade system. Without strict standards and implementation, the expansion of fair trade to include plantations in coffee and other sectors will most certainly erode standards and dilute fair trade's impact.
While it is true that farmer and worker advocates are deeply concerned with the plight of farmworkers and other hired laborers in the Global South, it is not conclusive that the current fair trade system is the best antidote for their situation. Fair trade's record as it relates to hired labor operations, like tea and bananas has been anything but successful. In fact, the literature suggests that fair trade certification often undermines national labor laws and the union presence that brings more benefits to plantation workers than fair trade.
FTUSA's decision has drawn the widespread condemnation of fair trade producer networks, including the Network of Asian Producers (NAP), Latin American and Caribbean Network of Small Fair Trade Producers (CLAC) and Fairtrade Africa. It is inconceivable that an organization who's organizational values include striving "to always act ethically and we value relationships built on honesty, mutual respect and trust" would advance a program without the knowledge or consent of the very producers it aims to support.
FTUSA's move away from FLO comes on the heels of the organization's controversial name change. In fall of 2010, FTUSA changed their name from TransFair USA, eliciting a significant uproar from within the FT community, with over 10k concerned consumers, advocates, and FT organizations sending letters to FTUSA expressing their concern about what many saw as an effort to monopolize the FT market and movement in the United States.
In January 2011, the Organic Consumers Association (OCA) filed a complaint to the Federal Trade Commission (FTC), charging that FTUSA authorized the misleading and deceptive labeling and advertising of the "Mark" brand products as "Fair Trade Certified" when, in fact, the products so labeled contain a minimal amount of fair trade certified ingredients. Over 8k people have signed letters in support of OCA's complaint. OCA is awaiting the pending decision from the FTC.
FTUSA has repeatedly failed to apply FLO standards. Case in point is FLO's commercial availability standard 2.2.Various brands and products lines which states that "Food composite ingredients must contain as many [FLO Fair Trade] certified ingredients as available." (http://www.fairtrade.net/standards.0.html). Dozens of products in the marketplace, ranging from Honest Tea to Sunspire Organic Cocoa Chips, have failed to source fair trade ingredients, yet continue to display the FTUSA fair trade seal. This dilution of the standards undermines consumer confidence in fair trade and denies producers the full benefit of a fair trade market.
Finally, FTUSA has a poor track record of responsibly engaging stakeholders on new initiatives. For example, FTUSA's textile and apparel multi-stakeholder process was contentious and divisive, not to mention a missed opportunity to create common cause and alliances with trade unions and labor advocates. For more information on this process, see the open "Letter to Transfair USA regarding Fair Trade Garments Pilot Project" signed by International Labor Rights Forum, SweatFree Communities, Presbyterian Hunger Project, STITCH, Workers United (an affiliate of SEIU), New York Labor Religion Coalition and the Organic Consumers Association.
The future of fair trade in the United States and beyond
Fair trade is at a critical crossroads. Despite the incredible potential in the United States to support ethical and fair companies and initiatives, the market is overrun with hundreds of social, ethical, green, and sustainable labels and certifiers, many with questionable ethics and standards. For consumers to maintain confidence in FTUSA and its certification program, FTUSA must actively and in good faith be accountable to producers and civil society at large.
FWP calls upon Fair Trade USA to do the following:
1) Suspend plans for certifying plantations and other hired labor operations in coffee and other commodities.
2) Promptly publish its new fair trade standards with clear mechanisms for accountable stakeholder review and engagement.
3) Open its Board of Directors to broad participation from members of producer networks, fair trade advocates, and students.
4) Commit to full transparency and traceability.
5) Create an ethical labeling scheme that clearly identifies percentage of FT ingredients on packaging and whether the product contains ingredients from plantations or estates.
6) Actively cooperate with FLO, IMO and other reputable certifiers to establish a "high bar" standard for fair trade certification.