New Fairtrade Trade Standards: Clearer and more transparency

16 febrero 2009

From 16 February 2009, the new Generic Fairtrade Trade Standards come into force. Generic trade standards have previously been included in the specific product standard documents. Now this generic standard provides a common and harmonized set of trade standards for all traders of Fairtrade certified products, regardless of which product they buy and sell. The generic trade standards will ensure greater transparency in the Fairtrade system as well as providing the basis for mutually beneficial and sustained trade between producers and buyers.The new generic Fairtrade standards clarify who needs to be Fairtrade certified. The main emphasis is on the ownership of the Fairtrade products and who is responsible for paying the Fairtrade prices and premium. Fairtrade trade standards now compromise three components:1)    Generic Trade Standards: This new generic standard is applicable to all producers and traders regardless of the product traded. It is sub-divided into six categories: Certification, Traceability, Contracts, Sustaining trade, Pre-finance and Pricing. 2)    Product specific requirements: Additional product specific trade requirements remain in the revised Product Standards. 3)    Pricing: There is now a complete pricing table containing all Fairtrade Minimum Prices and Fairtrade Premiums that is published separately to the product standards.Transparent and sustainable trading relationshipsFLO seeks to build transparent and sustainable trading relationships between Fairtrade producers and buyers. To facilitate this, the trade standards require buyers to submit a sourcing plan to the producers. This plan should contain information such as future estimated purchase volumes, qualities and dates of delivery. Along with the required sourcing plan FLO encourages buyers and producers to regularly exchange information (on prices, market evolution) and for buyers to offer any additional support in training or risk management to Fairtrade producers.The new standards include physical traceability as a requirement. Physical traceability means a product that has been marked (for example by label, barcode or ID) and kept separate from non-Fairtrade produce at each stage of production and processing. The requirement to date has been mainly to demonstrate traceability through paperwork (like invoices, bills contracts etc). Our aim is to extend the benefits of Fairtrade to many more producers. Building consumer trust and managing risk are central to this. The introduction of physical traceability supports both these objectives.Pre-financing continues to be an important aspect to the Fairtrade trade standards. In the new generic document the meaning of pre-finance is spelled out, along with methods and where pre-financing is applicable. The possibility of pre-finance for producers helps Fairtrade organizations gain access to reasonable forms of financial assistance so that they can be more viable on international markets. FLO is committed to working with producers and traders to make these new standards effective and realistic in trading throughout the Fairtrade certification system. There will be an ongoing review of the requirements, particularly on physical traceability. If necessary, amendments will be made to make sure that the requirements can be met with reasonable efforts for the benefit of all partners in the system.FLO is confident that the introduction of these new Generic Fairtrade Trade Standards will strengthen its unique trading system and facilitate its mission of combating poverty through trade. For more information please contact FLO International, Dorothee Jung at d.jung@fairtrade.net

 
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