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Fair Trade: What it Means and Why it's Important

Fair Trade: What it Means and Why it's Important

Posted by Snow on

Fair Trade is a term we can see used with a range of products—everything from underwear and organic scrunchies to tea and chocolate. The name implies something “fair”—which is a good thing. But what exactly does fair trade and its related certifications mean? Let’s take a look.  

What is Fair Trade?

While there’s no universally accepted definition of fair trade, we can understand it to mean a product that was produced in a more ethical way. It goes beyond fair prices to ensure that each product purchased has a significantly positive impact in the world. 

What Does Fair Trade Mean?

However, it’s important to note that Fair Trade is different from fair trade and Fairtrade. This is because there are certifications behind the two capitalized terms. If you spot “fair trade,” it could also refer to something that’s been fairly and ethically produced, but without the backing of a certification, so it may not carry as much weight. 

That said, there are three main fair trade organizations to be aware of. 

Fair Trade USA

If you see a white and green logo with someone carrying a basket, you’re seeing the Fair Trade Certified label. It’s a way to recognize companies, products, and factories that have met specific environmental, social, and economic standards.


In other words, the product is linked to:

  • Safe working conditions
  • Environmental protection
  • Sustainable livelihoods
  • Community Development Funds

The last bullet point is where organizations like Fair Trade USA really stand out, as it’s how sales of each Fair Trade product are reinvested back into the community in which the product was made. They’re able to choose where a portion of funds from every purchase is invested—whether it’s to establish drinking water pumps, support reforestation efforts, or build schools and libraries. 

Fairtrade International

As with Fair Trade USA, Fairtrade International and Fairtrade America also go above and beyond to support farmers and workers at every stage of the supply chain. 

Say you buy a Terra Thread Organic Cotton Backpack, for example. Because it’s made with Fairtrade certified organic cotton, small cooperatives in India are directly supported by the purchase.

They receive a Fairtrade Minimum Price, which is higher than typical pay and provides a safety net in case the market prices drop. Fairtrade Standards also support how they work; meaning that their rights are protected and an appropriate framework is provided to help them form sustainable farms and organizations. 

Beyond this, they also get the Fairtrade Premium, which is an additional sum of money that workers or farmers receive. Their chosen representatives decide how this money is invested in their community. Often, it’s used to support health or education programs, or to make business, farming, or infrastructure improvements.  

World Fair Trade Organization (WFTO)

If you’ve heard anything about the fair trade movement, you may be asking, what are the 10 principles of fair trade?

These principles are courtesy of yet another fair trade organization: the World Fair Trade Organization. The WFTO is the organization that’s behind the fair trade certificate from Fair Trade USA and 75 other member countries. It can be considered the main voice of the movement—and one with a big collective impact that’s based on 10 principles:

1. Creating opportunities for economically disadvantaged producers: Support for marginalized small producers, family businesses, and co-operatives to further poverty reduction.

2. Transparency and accountability: Free communication between buyers and sellers.

3. Fair trading practices: Orders are paid on receipt and relationships are based on trust and mutual respect.

4. Fair payment: Equitable fair prices and fair wages are paid (at least a local living wage).

5. Ensuring no child labor and forced labor: Any time children are involved in production, it is always monitored and does not adversely effect the child’s well-being, education, security, and need for play.

6. Commitment to non discrimination, gender equity and women’s economic empowerment and freedom of association: Provision of equal pay, the ability to form and join trade unions, no discirimination based on race, caste, religion, gender, sexual orientation, etc.

7. Ensuring good working conditions: Safe and healthy employment, working hours and conditions that adhere to local laws and ILO conventions.

8. Providing capacity building: Skill and capability development for WTFO members, organizations, and producer groups.

9. Promoting fair trade: Raise awareness of Fair Trade and the need for greater justice.

10. Respect for the environment: Source raw materials from sustainably managed sources, reduce energy consumption, minimal impact from waste.

Why is Fair Trade Important?

Fair trade products are important because they’re ethically and sustainably produced. They’re not just good for the people who produce the products, but they’re also good for shoppers, business, and the planet. Simply put, fair trade makes our world a better place. 

What are the benefits of fair trade?

Let’s break down how fair trade supports a more just and sustainable world. 

With the WFTO alone (Fair Trade USA, etc.) more than 965,700 livelihoods are benefitted. 74% of those involved in Fair Trade Enterprises are women, which means that they’re more capable of using their Fair Trade experience and wages in a way that can transform their local community. 

In ways that extend to the global community, Fair Trade producers learn practices of upcycling, engage in organic farming, meet and collaborate regularly, speak up collectively, and are altogether more empowered to improve their lives—and our planet as a whole. 

From an environmental perspective, Fairtrade America has been working with producers to combat climate change. Scientists have been working with their producer groups to explore how global warming will impact crops like banana, cocoa, sugarcane, coffee, tea, and cotton. In understanding these stressors, they’re helping farmers to become more resilient and secure their livelihoods. 

Fair Trade for a Better World 

Between support for marginalized farmers, workers and communities and actions that help to preserve future production of our most essential crops, fair trade is truly changing the world for the better. Providing one of the most conscious ways to consume, Green Eco Dream is proud to promote a range of fair trade home, beauty, body, and travel products. Check them out today and shop with your heart on your sleeve.

Shop Fair Trade products today with code: BLOG10 and save 10% on your first order with us!


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