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A Brief History of Fair Trade. Coffee Culture: Local Experiences, Global Linkages. © Taylor & Francis 2011. What is Fair Trade?.

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A Brief History of Fair Trade

Coffee Culture: Local Experiences, Global Linkages

© Taylor & Francis 2011

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What is Fair Trade?

  • Fair trade refers to an alternative marketing strategy that aims to mitigate the inequitable trade relationships that have come to characterize the world economic system.

  • It encompasses a philosophy, a movement and a network

© Taylor & Francis 2011

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The Philosophy

Economic relationships should support a more equitable and sustainable world

© Taylor & Francis 2011

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The Movement

  • Everyone who supports fair trade is part of the movement

© Taylor & Francis 2011

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The Network

Consists of non-governmental organizations, labeling initiatives, entrepreneurs, businesses, cooperatives, producer organizations, and other entities that promote and participate in fair trade.

The network is informal but shares similar principles.

© Taylor & Francis 2011

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Political Antecedents of Fair Trade

  • Many politicians and scholars felt that global economic inequities contributed to WWII

  • They proposed constraints on free trade to help developing countries’ economies

    • Bretton Woods Accord (1944)

    • Havana Charter (1948)

    • Import Substitution Industrialization (ISI)

  • These constraints failed to restructure global inequities but did help many countries make progress

© Taylor & Francis 2011

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Emergence of Alternative Trade Organizations (ATOs)

  • ATOs began to emerge after WWII

  • Activism for fair trade among socially conscious individuals, church groups and social justice organizations

  • Occurred synchronously with ISI initiatives and UNCTAD support for regulated trade

© Taylor & Francis 2011

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Overseas Needlepoint and Crafts Project (ONCP)

  • Edna Ruth Byler visited Puerto Rico in 1946

  • Brought Puerto Rican women’s crafts to the USA and returned the sales money to the women

  • Aimed to mitigate poverty

  • Founded the ONCP

  • Gained support from the Mennonite Church

  • ONCP became SELFHELP crafts and then Ten Thousand Villages

© Taylor & Francis 2011

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Equal Exchange

  • Founded in 1986 by concerned consumers

  • Troubled by the ramifications of industrial food production for society and health

  • Committed to fair prices and healthy food

  • Started by importing organic coffee

© Taylor & Francis 2011

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Max Havelaar

  • A Dutch NGO, Solidaridad, established first fair trade criteria in 1988

  • A Mayan cooperative asked Solidaridad for help selling its coffee at fair prices

  • Solidaridad created the Max Havelaar brand to sell fair trade goods, beginning with coffee

© Taylor & Francis 2011

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Trade Not Aid

  • By 1980s, influence of neoliberal economics led to end of regulated trade initiatives

  • Fair traders decided to position fair trade as an option within the free trade system, not an effort against it

  • Fair trade businesses adopted slogan “Trade not Aid” to distinguish themselves from charity

© Taylor & Francis 2011

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World Fair Trade Organization

  • Began in 1989 as the International Fair Trade Association (IFAT)

  • First umbrella organization to unite and coordinate diverse fair trade businesses and organizations

  • Shared set of principles and criteria

  • Commitment to 100% fair trade

  • Members include Ten Thousand Villages and Equal Exchange

© Taylor & Francis 2011

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Fair Trade Labelling Organization (FLO) International and FLO-CERT

  • Formed in 1997 as a second major umbrella organization for fair trade organizations

  • Aimed to coordinate and certify members

  • Designated “Fairtrade” name to distinguish itself

  • Established FLO-CERT in 2004 to take over certification as membership grew

  • Does not require 100% fair trade among members or products

© Taylor & Francis 2011

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Transnational Corporations (TNCs) Enter Fair Trade

  • Advantages:

    • Increased market for fair trade goods

  • Problems:

    • Cooptation of fair trade

    • Blue-washing

© Taylor & Francis 2011

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Contradictions with TNCs in Fair Trade

  • TNC involvement in fair trade has diluted the meaning and goals of fair trade

  • Fundamental contradictions:

    • Fair trade is committed to fair prices and social equity while TNCs are committed to making as much profit as possible

    • TNCs can sell goods as fair trade by buying from fair trade intermediaries (e.g., Transfair USA) without changing corporate practices

© Taylor & Francis 2011