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In November of 2011, Fair Trade USA announced that they were going to cut ties with Fairtrade International by the end of the year. Under the banner “Fair Trade For All,” this was part of a larger set of drastic changes to the fair trade certification process in the United States. The nature of this policy alteration has angered many critics as they essentially lower the requirements for an enterprise to be certified fair trade. For example, Fair Trade USA now requires that only 10% of ingredient need to be fair trade to receive certification, while other countries have a minimum of 20%.

The motive? Many argue that the reason for the changes is money, as the organization earns fees based on the number of products it certifies. Meanwhile, Fair Trade USA states that these changes will make it easier for large corporations to be certified as fair trade, which will help a larger number of poor farmers and works around the world.

This change in policy brings forth a few critical issues:

  • What will the ramifications be for allowing large, multi-national conglomerates to become fair trade certified? If giants like Nestle and Folgers become certified – will it actually benefit poor farmers and workers or will it just open the doors for these large corporations to manipulate this certification as a marketing tool?
  • Will breaking ties with Fairtrade International affect the global movement to a more socially conscious global consumer?
  • Will the new Fair Trade policies actually enable a more diverse set of producers to participate and compete in international markets? Or will it weaken the meaning of the certification and push the movement backwards?
  • Will the entrance of these multinationals do to the small-to-midsized fair trade enterprises that are trying to grow in this niche market? Historically, the fair trade movement in North America was designed to give small, artisanal operations a chance to create change socially and economically. Will these large organizations push out the smaller operations?
  • What impact will this have on the fair trade standards of other countries, particularly developing countries that desperately need strong fair trade regulations?

Rob Cameron,CEO of Fairtrade International, released an open letter following this announcement that addressed Fair Trade USA’s departure from the international body.

Now that FTUSA is pursuing its own approach we are developing an operating model to ensure that all businesses and organizations that want to be a part of our global Fairtrade family can do so. But we also want to take stock, and listen to the views of our many stakeholders – producers, NGOs, companies, trade unions and the grassroots Fair Trade movement – to determine the best way to meet everyone’s needs.

Meanwhile, the Fair Trade Federation released an open letter stating that they were neither in support of nor against the changes that Fair Trade USA is going forth with as they want to review the issues at hand further.

With a large set of questions and issues resulting from these proposed changes that will still need to be addressed in the coming months and years – we wonder what impact they will have on fair trade here in Canada as well.

Fair Trade Canada released a press release following this announcement that essentially reaffirmed their commitment to the international Fair Trade movement. The very first thing they did was to clarify that the views presented through these changes were of that of Fair Trade USA alone and not directly related to the policy or standards of Fair Trade Canada or Fairtrade International. They stated that:

Recognising that 70 percent of the world’s coffee is produced by smallholders with less than 10 hectares of land, and that around 10 million small-scale coffee farmers depend on coffee as their primary source of income, feedback to date has been that the global standard for coffee should remain fully focused, as originally intended, on delivering market access on Fairtrade terms for smaller-scale farmers. We will continue to explore how we can expand our reach in this regard, focusing on partnership with producer organisations committed to democracy, transparency and empowerment.

In addition, they addressed other innovations that Fair Trade Canada and its international partner are encouraging in their approach. (To view the entire outline, click here) Moreover, they stated their belief that one global set of Fairtrade “certification” standards contribute to building international awareness in a major way and are cost-effective in the cross-border sale of fair trade products.

What effect will the changes that Fair Trade USA, Fair Trade International and Fair Trade Canada are making have on producers, NGOs, companies, trade unions and the grassroots Fair Trade movement? Only time will tell.