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What is fair trade? Fair trading in the EU
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What is fair trade? Fair trading in the EU

July 29, 2022
What is fair trade? How does the European Union promote fair trade? The rules, policies, and achievements of fair trade in the EU.
Fair trade

From the beginning of time, trading was most of the time an unfair process. Somehow, one party always seemed to be making a better deal than the other. Fair trading is a policy to stop this unevenness, creating a balanced environment to do business.

What is fair trade?

Fair trade is an alternate, ethical approach to traditional trading that evolved in the last 50-70 years. Its goal is to achieve a fair distribution system benefiting both the producers and the buyers, mostly between the industrialized first-world nations and developing countries.

With fair trade, the workers of the developing countries might get a fair return for their performance. Generally, selling fair trade products can be more difficult than mass-produced goods, because these products do not necessarily reach the best price-quality ratio. Despite that, many consumers directly seek fair trade goods to support third-world countries, and make our environment more sustainable.

Fair trade standards and policies

What is the progress? A product will need a certification from the Fair Trade Labelling Organisations International (FLO) because ‘fairtrade’ is a registered trademark and can be only used if allowed. FLO is part of WFTO (World Fair Trade Organisation), which checks supply chains, worker incomes, and production.

Sadly, verification means extra costs for the producers, making it more difficult to sell their products. Verified goods are considered premium goods.

The most common fair trade products

Commodity products, such as coffee are the most popular kinds of fair trade products. Apart from coffee, you are most likely able to buy fair-traded

  • Tea, coffee
  • Banana
  • Cocoa
  • Flowers and plants
  • Seed cotton

The volume of sold fair trade products is growing 10 to 20 percent a year. Yet, its global volume is still a very small percentage compared to international trade, but more than 165 countries are now part of the fair trade organization, making it a billion-dollar industry.

How does the European Union promote fair trade?

The European Union has a role to play in fair trading. The European Fair Trade Association is determined to support its member organizations in their work and to encourage them to cooperate and coordinate. It facilitates the exchange of information and networking, it creates conditions for labour division and identifies and develops joint projects. 

It does all this by organizing meetings of the members (on food, handicrafts, marketing) and by circulating relevant information to them. It also maintains a database of EFTA suppliers, called Fairdata, which contains details on suppliers and their products.

Make trade fair! The consumer society and fair trading

Sustainability is trending. At the time of the Amazonas wildfire, people started to raise money on Facebook to stop the fire from spreading. People are buying shoes made of recycled plastics or ocean trash. 

We also buy ‘overpriced’ products to support a good cause. In the west, people started to eat meatlessly. Meatless Mondays can be the first step to maintaining this habit. GMO-free menus are also trending.

Companies now need to make products that protect the environment. The stocks of sustainable companies are rising. Customers started to live more eco-friendly too.

Environmental consciousness makes a good impact on fair trading. People intend to buy fair trade goods from the local shops, even if these products are more expensive than regular ones.

The consumer society will slowly turn into a more emphatic and sustainable society.