Just Salvos

Fairtrade & Economics

Definition of fair trade

The most widely recognized definition of fair trade was created by FINE, an informal Association of the four main fair trade networks (Fairtrade Labelling Organizations International, International Fair Trade Association, Network of European Worldshops and European Fair Trade Association):^[5]

Fair trade is a trading partnership, based on dialogue, transparency and respect, which seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers - especially in the South. Fair trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.

[edit] Key fair trade principles

Workers sorting and pulping coffee beans at a fair trade cooperative in Guatemala

Fair trade advocates generally support the following principles and practices in trading relationships:


: Fair trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system.


: Fair trade involves transparent management and commercial relations to deal fairly and respectfully with trading partners.

Capacity building

Fair trade is a means to develop producers’ independence. Fair trade relationships provide continuity, during which producers and their marketing organizations can improve their management skills and their access to new markets.

A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production which is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fairtraders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing.

Gender equality

Fair trade means that the work of men and women is properly valued and rewarded. Each person is always paid for their contribution to the production process and are empowered in their organizations, regardless of gender.

Fair trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context.

Environmental protection

Fair trade actively encourages better environmental practices and the application of responsible methods of production.