History of Fair Trade
60 YEARS OF FAIR TRADE: A BRIEF HISTORY OF THE FAIR TRADE MOVEMENT
Fair Trade today
Fair Trade today is a truly global movement. Over a million small-scale producers and workers are organized in as many as 3,000 grassroots organisations and their umbrella structures in over 70 countries in the South. Their products are sold in thousands of World-shops or Fair Trade shops, supermarkets and many other sales points in the North and, increasingly, in sales outlets in the Southern hemisphere. The movement is engaged in debates with political decision-makers in the European institutions and international fora on making international trade fairer. On top of that, Fair Trade has made mainstream business more aware of its social and environmental responsibility. In short: Fair Trade is becoming more and more successful.
Where did it all begin?
There are many stories about the history of Fair Trade. It all started in the United States, where Ten Thousand Villages (formerly Self Help Crafts) began buying needlework from Puerto Rico in 1946, and SERRV began to trade with poor communities in the South in the late 1940s. The first formal “Fair Trade” shop which sold these and other items opened in 1958 in the USA.
The earliest traces of Fair Trade in Europe date from the late 1950s when Oxfam UK started to sell crafts made by Chinese refugees in Oxfam shops. In 1964, it created the first Fair Trade Organisation. Parallel initiatives were taking place in the Netherlands and in 1967 the importing organisation, Fair Trade Original, was established.
At the same time, Dutch organisations began to sell cane sugar with the message “by buying cane sugar you give people in poor countries a place in the sun of prosperity”. These groups went on to sell handicrafts from the South, and in 1969 the first “Third World Shop” opened. World Shops, or Fair Trade shops as they are called in other parts in the world, have played (and still play) a crucial role in the Fair Trade movement. They constitute not only points of sales but are also very active in campaigning and awareness-raising.
During the 1960s and 1970s, Non-Governmental Organisations (NGOs) and socially motivated individuals in many countries in Asia, Africa and Latin America perceived the need for fair marketing organisations, which would provide advice, assistance and support to disadvantaged producers. Many such Southern Fair Trade Organisations were established, and links were made with the new organisations in the North. These relationships were based on partnership, dialogue, transparency and respect. The goal was greater equity in international trade.
Parallel to this citizens’ movement, the developing countries were addressing international political fora such as the second UNCTAD conference (United Nations Conference on Trade and Development) in Delhi in 1968, to communicate the message “Trade not Aid.” This approach put the emphasis on the establishment of equitable trade relations with the South, instead of seeing the North appropriate all the benefits and only returning a small part of these benefits in the form of development aid.
The growth of Fair Trade (or alternative trade as it was called in the early days) from the late 60s onwards has been associated primarily with development trade. It grew as a response to poverty and sometimes disaster in the South and focused on the marketing of craft products. Its founders were often the large development and sometimes religious agencies in European countries. These NGOs, working with their counterparts in countries in the South, assisted to establish Southern Fair Trade Organisations that organize producers and production, provide social services to producers, and export to the North. Alongside the development trade there was also a branch of solidarity trade. Organisations were set up to import goods from progressive countries in the South that were both politically and economically marginalised.
Handmade crafts and food
In the early days of fair trading, Fair Trade Organisations traded mostly with handicrafts producers, mainly because of their contacts with missionaries. Often, handmade crafts provide supplementary income to families. They are of crucial importance to households headed by women who have limited employment opportunities. Most Northern Fair Trade Organisations focused on buying these products and sold them through World Shops. The market reception of the handmade products in the World Shops was enormous. World Shops became popular for selling products from developing countries, and enjoyed upward sales turn over for many years.
In 1973, Fair Trade Original in the Netherlands, imported the first fairly traded coffee from cooperatives of small farmers in Guatemala. Now, more than 30 years later, Fair coffee has become a concept. Meanwhile, hundreds of thousands of coffee farmers have benefited from Fair Trade in coffee. In Europe, Fair Trade coffee became a popular choice for many consumers. Presently, between 25 to 50 % of turnover of Northern Fair Trade Organisations comes from this product. After the success of coffee, many fair trading organisations expanded their food range and started selling commodity products like tea, cocoa, sugar, wine, fruit juices, nuts, rice and spices. Consumers welcomed these products like coffee.
Food products enable Fair Trade Organisations to open new markets, such as institutional markets, supermarkets and bio shops. In addition to these food products, other non food products such as flowers and cotton have been added to the Fair Trade assortment.
From the mid 70s, Fair Trade Organisations worldwide began to meet informally in conferences every couple of years. By the mid 80s there was a desire to come together more formally and by the end of the decade two organisations were established. The European Fair Trade Association (EFTA), an association of the 11 largest importing Fair Trade organisations in Europe, was formed in 1987, and two years later, the World Fair Trade Organisation (WFTO), formerly the International Federation of Alternative Trade (IFAT).
Both trading organisations in the south and the north felt the need to establish a global network for Fair Trade Organisations, to act as voice for Fair Trade and a forum for the global Fair Trade movement. Thus, in 1989, WFTO was formed in the Netherlands. The members of WFTO vary greatly. They represent the Fair Trade supply chain, from production to sale, and also include support organisations such as Shared Interest, which provides financial services and support to produces.
Networking between Fair Trade Organisations is crucial to their success. All over the world, networks have been established. Regional networks include the Asia Fair Trade Forum (now WFTO ASIA), Co-operation for Fair Trade in Africa (now WFTO Africa and Middle East), the Association Latino Americana de Comercio Justo (now WFTO Latin America) and IFAT Europe (now WFTO Europe). National networks also grew like Ecota Fair Trade Forum in Bangladesh, Fair Trade Group Nepal, Associated Partners for Fairer Trade Philippines, Fair Trade Forum India, Kenya Federation for Alternative Trade (KEFAT), etc.
FLO (Fairtrade International), IFAT (WFTO), NEWS! and EFTA started to meet in 1998 and was known by their acronym - FINE. The aim of FINE is to enable these networks and their members to cooperate on important areas of work, such as advocacy and campaigning, standards and monitoring of Fair Trade.
Awareness raising, campaigning and advocacy
The Fair Trade movement came to being to raise awareness on trade injustices and imbalances of power in the conventional trade structures, and to advocate changes in policies to favour equitable trade. Sale points of Fair Trade products became one of the effective methods of campaigning. It was the Fair Trade shops that started including producer stories in product packaging to raise awareness on Fair Trade. World / Fair Trade Shops mobilised consumers to participate in campaigning activities for more global justice.
The first European World Shops conference took place in 1984. This conference set the beginning of close cooperation between volunteers working in World Shops from all over Europe. The Network of European World Shops (NEWS!) was formally established in 1994 and now represents approximately 3.000 World Shops in close to 20 European countries. NEWS! coordinates European campaigning activities and stimulates the exchange of information and experiences about development of sales and awareness raising work.
In 1996, NEWS! established the European World Shops Day as a Europe-wide day of campaigning on a particular issue, often with a goal at the European level. This initiative has been taken up by IFAT, which brought it to a worldwide level. The first World Fair Trade Day, which involves the worldwide Fair Trade movement, was celebrated on May 4, 2002. Now World Fair Trade Day takes place every year on the second Saturday of May and has its own Website: www.wftday.org.
In the course of the years, the Fair Trade movement has become more professional in its awareness-raising and advocacy work. It produces well-researched documents, attractive campaign materials and public events. It has also benefited from the establishment of European structures that help to harmonize and centralise its campaigning and advocacy work. An important tool was the establishment of the FINE Advocacy Office in Brussels, which focuses on influencing the (European) policy-makers. It is supported, managed and funded by the whole movement, represented in FLO, IFAT(now WFTO), NEWS and EFTA – hence its acronym FINE.
Fair Trade and Fair Trade Organisations have been recognised repeatedly by European Institutions as well as national and regional governments for its contribution to poverty reduction, sustainable development and consumer awareness-raising. The European Parliament passed several resolutions on Fair Trade (in 1994, 1998 and 2006) and many European ministers and prime ministers have publicly endorsed Fair Trade. Ever more public institutions are serving Fair Trade products and local authorities include fair and sustainable criteria in their public tenders. Thousands of towns, universities and churches have applied for Fair Trade status, committing to promote Fair Trade and to contribute to overcoming poverty and exclusion. Increasingly, representatives from developing countries promote Fair Trade because it enables small and marginalized producers in their countries to live and work in dignity. Fair Trade is increasingly on the agenda of policy makers throughout the world.
Fair Trade Enterprises and Fair Trade labelling
In the first decades, Fair Trade products were sold mainly by Fair Trade Enterprises that had Fair Trade as the central ethos guiding their activities. In the seventies and eighties, Fair Trade products were sold to consumers mainly in world shops or Fair Trade shops.
In the second half of the 1980s, a new way of reaching the broad public was developed. A priest working with smallholder coffee farmers in Mexico and a collaborator of a Dutch church-based NGO conceived the idea of a Fair Trade label. Coffee bought, traded or sold respecting Fair Trade conditions would qualify for a label that would make it stand out among ordinary coffee on store shelves, and would allow not only Fair Trade Enterprises, but any company to sell Fair Trade products. In 1988, the “Max Havelaar” label was established in The Netherlands. The concept caught on: within a year, coffee with the label had a market share of almost three percent.
In the following years, similar non-profit Fair Trade labelling organisations were set up in other European countries and in North America. In 1997 their worldwide association, Fairtrade Labelling International (FLO, now Fairtrade International) was created. Today, Fairtrade International sets international standards for several Fair Trade products. FLO-CERT, an independent certification and verification organisation, uses the Fairtrade standards in certifying production and auditing trade. Products that meet these standards are identified by the Fairtrade label. Fair Trade labelling has helped Fair Trade to go into mainstream business. Currently, over two-thirds of Fair Trade products are sold by mainstream catering and retailing.
Parallel to the development of labelling for Fair Trade products, the International Federartion of Alternative Trade (IFAT, now WFTO) developed a monitoring system for Fair Trade Enterprises. In order to strengthen the credibility of these organisations towards political decision-makers, mainstream business and consumers, the IFAT Fair Trade Organisation Mark was launched in January 2004. The FTO Mark is available to member organisations that meet the requirements of the IFAT monitoring system and identifies them as registered Fair Trade Organisations.
Members of IFAT felt that the FTO Mark, which could not be used as a product label, was not enough to give them visibility in the label-conscious market. Following the sentiments of its members, IFAT underwent enormous changes starting in 2009.
The International Federation of Alternative Trade changed its name to World Fair Trade Organization during the 2009 Kathmandu Annual General Meeting (AGM). The same year, the organisation spearheaded the global celebration of World Fair Trade Day. The move to rebrand itself was part of the plan to make WFTO one of the major global players in Fair Trade.
It was during the 2011 Mombasa AGM that WFTO members decided to have a new Fair Trade system. Following that decision, the WFTO Board was tasked to form a Working Group to design a system that would pave the way for a product label for Fair Trade Enterprises. The group was composed of experts in the field of Fair Trade verification and monitoring.
Two years later at the 2013 Rio AGM, members of WFTO approved the new Guarantee System (GS) after it was presented by the working group together with reports and feedback from pilot organisations that were part of the system testing. The GS has five components: improved membership application procedure, self assessment, peer visit, monitoring audit and the Fair Trade Accountability Watch. The GS uses the WFTO Fair Trade Standard for organisations, which comprises a set of compliance criteria based on the 10 Principles of Fair Trade and International Labour Organisation (ILO) conventions.
The GS revolutionised Fair Trade verification. It is an innovative system that can be used to verify Fair Trade compliance of any type of trading organisations, and thus not tied to product-specific features. It was developed to address the various types of trading organisations at WFTO, taking into consideration that many are small fair trading organisations producing a variety of different products every year, which is dependent on market demands and trends. Members that successfully complete the GS process become Guaranteed Members and are able to use the WFTO Product Label on their products. It is a label for Guaranteed Fair Trade Enterprises that can be used on products as an assurance for buyers and consumers that the Guaranteed member has complied with the Fair Trade Standard.
During its history of over 60 years, Fair Trade has developed into a widespread movement. Thanks to the efforts of Fair Trade Organisations worldwide, Fair Trade has gained recognition among politicians and mainstream businesses. More successes are to be expected, as Fair Trade Organisations develop into stronger players and mainstream companies become more and more attuned to the demand for Fair Trade in the marketplace. Watch this space as we continue to write Fair Trade history!
This version of the History of Fair Trade was prepared and edited on behalf of WFTO with the input and advice of a number of Fair Trade pioneers.
Created: January 2004
Updated: December 2006 (WFTO & EFTA)
Updated: December 2020 by WFTO