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Fair trade is a global social movement that sets ethical standards for business. These standards are set to help achieve goals such as reducing poverty and protecting the environment. A fair trade organization is one that has agreed to adhere to certain rules and maintain certain standards. When this is done, the company is certified as a fair trade organization and granted the right to display fair trade insignia.
The concept of a fair trade organization is credited to Edna Ruth Byler, a Mennonite volunteer. The poverty of hard working Puerto Rican seamstresses is said to have prompted Byler to bring some of their goods to the United States (US) to sell at fair prices. Afterward, she returned the money to the women. The result of these transactions is a well known fair trade organization called Ten Thousand Villages.
Although Byler began paving the way for fair trade in 1946, one of fair trade’s primary goals remains the eradication of poverty among producers. Many products are either partially or wholly produced in third world countries, where wages are often unpaid or unfair and working conditions are appalling. A free trade organization is one dedicated to ensuring that all people along the line of production are paid and that their wages are fair.
Outlining an exact formula to determine fair wages can be difficult. According to the Fair Trade Federation (FTF), there are a number of factors that must be considered when the fairness of wages is determined. These include workers' skill, fair wages in the areas where the work is done, and the cost of living in the areas where the work is done.
In addition to ensuring that people are paid ethically, a fair trade organization also ensures that people work in humane conditions. These groups are committed to standards that fight against forced labor, a form of modern slavery, and child labor. Respect is one of the principles in fair trade. Organizations that are part of this movement realize that respect can only apply to all if the working conditions for all people are humane.
In addition to protecting people, fair trade organizations are also committed to protecting the environment. One standard that such organizations are required to commit to are environmentally friendly business practices. Such standards take issues such as pollution, recycling, and resource consumption into consideration. These organizations must also commit to sustainable production practices.
Fair trade organizations receive the benefit of attracting a certain clientele. These businesses are usually endorsed and patronized by individuals who are environmentally friendly or active supporters of human rights. These organizations can be identified because they can display fair trade insignia and place it on their products once they are certified.