Fair trade: what you need to know

Updated Sep 26, 2023
“Nobody wants to buy something that was made by exploiting someone else.” – Jerry Greenfield, businessman, Fairtrade supporter

Interested in learning more about fair trade? That’s great news. Your shopping choices can help protect workers in developing countries, preserve childhoods and even save lives.

In this article, you’ll learn about fair trade as a concept, as well as the organization Fairtrade. They’re important names to know, if you want to make ethical shopping choices. Armed with this information, you can hold companies and governments responsible for their sourcing and production decisions.

Fair trade and Fairtrade are a little different. But both can help protect the people who sew, build, mine or harvest the things you buy. Were those workers paid fairly? Were their working conditions safe? Were they even adults?

The more you know about fair trade, the more power you hold as a consumer. Making good shopping decisions is just the beginning – you can influence companies and governments, too.
  1. What is the definition of fair trade?
  2. What happens without fair trade?
  3. What is the difference between fair trade and Fairtrade?
  4. How can I distinguish between fair trade and Fairtrade labels?
  5. Are all fair trade products certified?
  6. How does World Vision champion fair trade?
  7. How does World Vision press the Canadian government to adopt fair trade principles?
  8. What are the criticisms of fair trade?
  9. How can I buy fair trade products like tea and chocolate now?

1. What is the definition of fair trade?

The fair trade definition in the dictionary is very basic. It reads, “trade between companies in developed countries and producers in developing countries in which fair prices are paid to the producers.”

A family kneels amidst rows of bright green vegetables. Their arms are around one another. They are smiling broadly.
World Vision in Cambodia has helped local agricultural cooperatives form a union. They now have a say in how their businesses run. Photo: Dara Chhim

But most organizations describe fair trade as more of a movement than a concept. According to the World Fair Trade Organization, here’s what fair trade is about:
  • Fair trade is a vision of business and trade that puts people and planet before profit
  • Fair trade is a trading partnership, based on dialogue, transparency and respect
  • Fair trade can fight poverty, climate change, gender inequality and other forms of injustice
  • Fair trade seeks greater equity in international trade.
  • Fair trade contributes to sustainable development by offering better trading conditions to marginalized producers and workers
  • Fair trade fuels sustainable development by helping secure the rights of workers.

2. What happens without fair trade?

A sewing machine in the foreground looms large. A small boy sits cross-legged on the floor behind, bent over his sewing.Jatin’s parents don’t benefit from a fair trade system. They’re not paid fairly for their shoe making. Their 13-year-old son must also earn, rather than building a brighter future in school. “Work is hard, but there’s no option,” says Jatin. Photo: Tiatamjen Jamir

When fair trade is absent, lives can be destroyed. Unfair trade can contribute to systems of poverty and oppression which hurt the world’s most vulnerable people. Children and women in developing countries are often the primary victims. Here are some examples:
  • When parents aren’t paid a living wage for their labour, children can be forced to join the workforce. Their pay is usually far lower.
  • When children are forced into the workforce, they can’t attend school. Without an education, children lose the chance for better jobs in the future.
  • When parents are hurt or killed at work due to unsafe or abusive working conditions, they can’t support their children. Children must head to work to make ends meet.
  • When children are hurt or maimed at work due to unsafe or abusive working conditions, they are often unable to support themselves as adults.
  • When people are desperate for fair pay, they can be tricked into leaving their country for work. They can be trafficked into slavery.
  • When Canadians are unaware of how unfair trade hurts people in the developing world, they don’t make changes to their shopping habits. Companies continue trading unfairly, because they have nothing to lose. A global economy defined by fair trade never comes to be.

3. What is the difference between fair trade and Fairtrade?

There are many similarities and some key differences. Both support the values and principals of treating people fairly through trade. That means things like fair pay, safe working conditions, treating people with dignity and hiring adults – not children.

Certification is one key difference between Fairtrade and many fair trade programs. There is a robust certification process that’s required before a product earns a special Fairtrade label. Fairtrade’s mark means producers and businesses have met internationally agreed standards related to price and premiums, labour laws, inspection, and supply chain. Fairtrade Canada’s web site goes into greater detail, describing Fairtrade’s “independent, third-party certification system for goods that are produced in the Global South.”

Fair for Life is one other example of a programme offering certification for fair trade products. Like Fairtrade, Fair for Life is about promoting sustainable development, so communities and economies can advance. And like Fairtrade, they follow up with periodic surveillance of certified products.

Fairtrade International and Fairtrade Canada have the mark you may have seen on products in your grocery store or other shops. In the United States, you’d look for Fair Trade Certified.

Fairtrade logoBananas with the fairtrade logo
The Fairtrade logo is increasingly visible on products from developing countries.

4. How can I distinguish between fair trade and Fairtrade labels?

According to the Fairtrade site, the Fairtrade Mark or logo certifies that a product meets agreed fair trade criteria for a product. The label does not apply to an organization, it only applies to the specific product on which it is displayed.

Several organizations have published guides to the different fair trade labels. They delve into questions like these:
  • Do all labels, logos and certifications mean the same thing?
  • Why can products like coffee or bananas be “certified” but not things like bracelets or journals?
  • Why do some labels say things like “Fair Trade Certified Ingredients” or “Fair Trade Certified Factory” and some just say “Fair Trade Certified”?
Another guide, the International Guide to Fair Trade Labels, aims to help people:
  • better understand the guarantees of fair trade labels, standards and monitoring measures
  • make the distinction between fair trade and sustainable labels.

5. Are all fair trade products certified?

Many organizations were doing good work long before Fairtrade’s third-party certification system was established.

They are dedicated to promoting fair trade and trading fairly. These groups are sometimes known as Alternative Trading Organizations or ATOs.

A man and woman in Honduras proudly hold a bag of coffee beans. They are standing in front of their business.
In Honduras, World Vision has partnered with local business people Marisol and Genrii. They provide local coffee farmers with a place to sell their beans. Although the farmers are paid fairly, there’s no official third-party certification process in place. Photo: Jon Warren

These fair trade promoting organizations can help reduce the exploitation of workers.

But, unlike Fairtrade, most don’t have independent, third-party certification and auditing for the production of their products. They do tend to support certain fair trade practices and principles:
  • Creating opportunities for economically disadvantaged producers
  • Transparency and accountability
  • Capacity building (helping producers becoming independent)
  • Payment of a fair price
  • Gender equity
  • Better working conditions
  • Respecting the environment
Read more

6. How does World Vision champion fair trade?

At World Vison, children are our primary focus. Therefore, our approach to fair trade prioritizes the well-being of children.

Here are six facts about World Vision’s fair trade work:
  1. We champion children’s rights as a top priority in the fair trade movement.
  2. We partner with other child-focused organizations and groups like Fairtrade Canada on fair trade initiatives which benefit children.
  3. We press the Canadian government to take action against human rights violations in corporate supply chains. Child labour is of critical concern to World Vision.
  4. We involve Canadians at every opportunity, urging them to sign petitions and e-mail companies on their sourcing practices.
  5. We challenge Canadians to be more ethical consumers, using tools we provide like:

Close-up shot of a boy’s hands, holding the rusty machete he once used to harvest sugar cane.Without fair trade, Jan earned just $2 a day harvesting sugar cane in the Philippines. Sponsorship through World Vision helps Jan’s parents provide for him, so their son doesn’t have to work. Photo: Mong Jiminez

7. How does World Vision press the Canadian government to adopt fair trade principles?

"Each year, more than $34 billion of products are imported into Canada that may have been made by child or forced labour. Millions of children's futures depend on this legislation." – Michael Messenger, president, World Vision Canada

World Vision and coalition partners had a big success in 2019. We’d been urging the Canadian government to empower Canadians to make better fair trade shopping decisions.

We want Canadian companies to be accountable for their supply chains – and report regularly on their efforts. We want the Canadian government to make these requirements law.

Why? Because unless companies know what’s happening all the way down their supply chains – and share that information with Canadians – making ethical shopping choices is very difficult.

Two people who may be teenaged boys or may be young men tend tea plants under a hot African sky.Grocery stores and coffee shops in your town can likely not confirm the ages, pay levels and working conditions of the people who grew their tea. Photo: Diane Igirimbabazi

What’s a supply chain? Take products like tea or clothing. While companies you support in Canada might treat and pay their Canadian employees fairly, they often know little about:
  • The workers who watered the tea plants or planted the cotton
  • The workers who picked the leaves or harvested the cotton
  • The workers who transported the raw goods to middle-managers
  • The workers who packaged the goods for transport
  • The workers who wove the cotton into fabric, cut out the garments, or sewed on buttons
Supply chain legislation would require companies in Canada to know more about these things – and report back to Canadians. That way, Canadian shoppers can make educated decisions about the products they buy. Some highlights:

The announcement: In February of 2019, the government announced it would initiate consultation on corporate supply chain legislation within the year. This would add Canada to a growing list of countries taking action in this area.

The Canadian response: By the time the announcement was made, more than 100,000 Canadians had signed a petition voicing their support for global supply chain legislation.

The coalition: World Vision Canada is working with Fairtrade Canada and UNICEF Canada to press for supply chain legislation. We want companies here to be more accountable for the products they sell – and to report back.

The unified government response: The government was responding to an October 2018 parliamentary report which all parties supported. The report was called A call to action: ending the use of all forms of child labour in supply chains.

The news coverage: News reports and analyses have been numerous and include:

“Canada moves one step closer to supply chain legislation”, Thomson Reuters Foundation, February 21, 2019

“Charities applaud efforts to end child and forced labour supply chains”, iPolitics, February 12, 2019

“Warning: garment may contain slave labour”, Corporate Knights, August 15, 2019

“Modern slavery legislation and the mining industry: expected impacts”, Canadian Mining Journal, June 1, 2019

“OPINION: Canada at a crossroads over law to tackle supply chain slavery”, Thomson Reuters Foundation, September 19, 2019

8. What are the criticisms of fair trade?

Some organizations have raised the question of whether fair trade is truly fair. It’s been called a flawed system. A hiding place for unethical practices. A marketing strategy. Here are some things to consider about fair trade: While many of these critiques are valid, $956 million in Fairtrade certified premiums were earned by producers – in the last five years alone. That means additional benefit for farmers and other workers.

9. How can I buy fair trade products like tea and chocolate now?

World Vison’s No Child for Sale initiative includes guides like The Fair Trade Chocolate Guide, The Fair Trade Tea Guide and even The Good Makeup Guide. These guides help empower Canadians as they shop for gifts and groceries.

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