The World Fair Trade Organization (WFTO) outlines 10 key principles that are essential to fair trade.
- Creating opportunities for economically disadvantaged producers
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.
- Transparency and accountability
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.
- Promoting Fair Trade
Fair Trade Organizations raise awareness of Fair Trade and the possibility of greater justice in world trade. They provide their customers with information about the organization, the products, and in what conditions they are made. They use honest advertising and marketing techniques and aim for the highest standards in product quality and packing.
- Payment of a fair price
A fair price in the regional or local context is one that has been agreed upon 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. Fair traders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing.
- Gender equity
Fair Trade means that women's work is properly valued and rewarded. Women are always paid for their contribution to the production process and are empowered in their organizations.
- Working conditions
Fair Trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child, as well as the laws and norms in the local context.
- Child labour
Fair Trade Organizations respect the UN Convention on the Rights of the Child, as well as local laws and social norms in order to ensure that the participation of children in production processes of fairly traded articles (if any) does not adversely affect their well-being, security, educational requirements and need for play. Organizations working directly with informally organized producers disclose the involvement of children in production.
- The environment
Fair Trade actively encourages sound environmental practices and the application of responsible methods of production.
- Trade relations
Fair Trade Organizations trade with concern for the social, economic, and environmental well-being of marginalized small producers and do not maximize profit at their expense. They maintain long-term relationships based on solidarity, trust, and mutual respect that contribute to the promotion and growth of Fair Trade. An interest free pre-payment of at least 50% is made if requested.