09.23 Mon


What is fair trade?

A:It is a social movement that helps people in developing countries earn better prices for their goods.
Oct 17,2009
Consumers are introduced to various fair trade products at an event organized by the Korea Fair Trade Association to raise awareness about fair trade products and practices. The fair took place in front of City Hall, central Seoul, in tandem with an Earth Day celebration in April. Fair trade participants also aim to protect the environment. Provided by the Korea Fair Trade Association

How often do you think about where the things you eat, drink and use come from? What is the origin of the rice in your bowl and how did it get there? Who made it and how many people bought and sold it before it arrived in your local grocery store?

In prehistoric times, before there was money, people traded all kinds of goods, including precious metals, spices, fabrics and animals, to get the things they needed.

The invention of money simplified this process and made it easier for people in different regions to access a variety of things.

But the consequence was that people of one region flourished because their goods were worth more, while those from other areas did not. In this system, the market decides the value of the goods exchanged.

According to economists, this is still one of the reasons why some countries prosper and others do not.

These days, globalization has opened markets around the world, which has increased trade between countries. As trade increases, tariffs on goods and services have decreased or have been eliminated and individuals and businesses can exchange goods more freely.

But is all trade fair? Not necessarily.

People in developing countries often face barriers to production, including social, religious or political strife, that prevents them from selling their goods and makes it difficult for them to compete with more advanced countries.

Fair trade is not based on free market principles, but on partnership, dialogue, transparency and respect.

The aim of fair trade is to offer better trading conditions to otherwise marginalized producers and workers in developing countries, rather than leaving it up to the market to decide who benefits from trade.

Another problem producers in developing countries face is the fees they must pay to middlemen. These are companies or individuals that facilitate trade between two or more parties. The more middlemen there are between buyer and seller, the higher the cost of the goods or services being exchanged. Fair trade tries to eliminate middlemen and bring goods directly from producer to consumer, thus lowering prices.

The fair trade movement began in Europe in the 1960s and was believed to have been started in part by Oxfam, a British NGO, which began selling imported handicrafts in its stores.

After the fair trade movement got started, more fair trade products became available to Western consumers. The list now includes agricultural goods including cocoa, sugar, rice, dried fruits, spices, cotton and other products.

Coffee and tea were among the first fair trade products available. The growing coffee industry is known as one of the most exploitative in the world. Coffee growers often work for wealthy intermediaries who benefit from the high price of coffee on the world market, but underpay the growers.

Fair trade in practice

Here is an example of how the fair trade process works. For many women in Laos, which is located between Vietnam and Thailand, their only source of income is selling the crafts that they make by hand. But they make so little money that they often do not have enough money to buy all of the things they need, including their children’s tuition and medical expenses.

This is where fair trade comes in. A fair trade organization provides the women with the materials they need to make their goods, such as cloth and needles. The organization then helps them sell their products directly to buyers in other countries.

Then, the products are marked with the fair trade logo so consumers know they are buying a fair trade product.

Through this process, the women are ensured of a fair price for their labor.

Fair trade in Korea

Despite the increasing global awareness about fair trade, the concept is still in its infancy in this country. It was only recently, in 2004, that Korea began importing fair trade-certified products, including coffee, sugar, tea and chocolate.

According to a recent survey by the market research firms Trend Monitor and Embrain, only one in every four Koreans knows what fair trade products are. In Germany, 80 percent of the population is aware of the term. Awareness about fair trade products here is increasing, however, due to efforts by fair trade organizations that hold seminars to promote their products and educate people about fair trade. The Europe-Korea Foundation recently held such a seminar, and invited local and foreign representatives of fair trade organizations to attend.

Johnna Phillips, international labeling manager of the Germany-based Fairtrade Labelling Organizations International, which promotes fair trade, was also present. She said that as Korea provides more assistance to developing nations, there are more people aware of fair trade practices.

There is also an increasing number of fair trade organizations here. The first organization to bring in fair trade products was Duree Co-op in 2004. In 2006, two more joined, including the Beautiful Store. Other participants now include Korea YMCA, Fair Trade Korea, the Korean Fair Trade Association and ICCOP.

Organizations such as these work together to organize events, such as the one around World Fair Trade Day in May, and increase consumer participation in the fair trade process.

By Lee Eun-joo [angie@joongang.co.kr]

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