EU Policies on Fair Trade

EU piecemeal approach towards Fair Trade so far 

At the European Union (EU) level, there is no Fair Trade-specific legislation. Although Fair Trade has been mentioned in relation to several EU policy areas over the past decade, there is no common policy framework for all 28 Member States and these policies remain genuinely a national or a regional competence.

The EU approach towards Fair Trade has varied significantly among EU institutions and over time. The most remarkable recognition so far has come from the European Parliament. The Resolution “Fair Trade and development” voted in 2006, already called for an EU-wide support to the concept of Fair Trade as well as its mainstreaming in all the EU policies.

The European Commission’s response to the afore-mentioned Resolution did not address most of its demands. Instead, the Commission in its Communication of 5 May 2009, "Contributing to sustainable development: the role of Fair Trade and non-governmental trade-related sustainability assurance schemes" took a “hands-off” approach. The Fair Trade movement welcomed the reference to the definition of Fair Trade as defined by the Charter of Fair Trade principles. Regrettably, the Commission only looks at Fair Trade from a technical perspective, considering it yet another “sustainability” label. This Communication remains, in the words of the Commission, “the cornerstone of the EU policy on private sustainability-bound schemes”.

With regard to the role of local and regional authorities, the Committee of the Regions highlighted the role of local and regional entities as “important players in a Fair Trade policy” in its Opinion in response to the 2009 Commission Communication. It insisted on the need for a “European Fair Trade Strategy” for Local and Regional Authorities, which was unfortunately not followed up by the European Commission. 

In its own-initiative opinion on the “Local and regional support for fair trade in Europe”, the Committee of the Regions calls again on the Commission to make use of  the upcoming Trade Strategy to outline the concrete measures which it envisages to move towards a coherent framework for EU Fair Trade.


EU Trade policies

In this area there have been some interesting developments since the 2009 Commission Communication.

The “Trade, growth and development” Communication lays out the EU’s trade strategy towards developing countries for the next decade.  With regards to Fair Trade, it recognises that it can, among others, “be an effective way to foster sustainable and inclusive growth” for these countries. It also mentions some ways in which the EU sustainable development can be promoted within a “values-based” trade agenda: by “encouraging its partner countries to promote fair and ethical trade; by further facilitating fair and ethical purchasing choices by public authorities in Europe in the context of the upcoming review of the public procurement Directives”.

Among the proposals, a “small operators in developing countries package” is foreseen which includes the support to the “participation of small businesses in trade schemes that secure added value for producers, including those responding to sustainability (e.g. fair, ethical or organic trade) and geographic origin criteria in development cooperation with third countries”.

Despite recognizing the added value of Fair Trade and giving some hints on how to promote it, the Communication fails to put forward a coordinated set of actions to support the economic development strategy of Fair Trade nor an Action Plan to encourage the uptake of it by citizens, companies and public authorities.

As announced in the afore-mentioned Communication, the Commission has systematically included Sustainable Development Chapters in the recent trade agreements that it has signed with third countries. In those chapters, specific mention is made of the promotion of “fair and equitable trade” within those agreements. To date the support to Fair Trade has not been translated in any concrete measures in favour of small producers in any of the countries with which the EU has signed those trade agreements.


EU Development policies


With regards to development cooperation, the private sector agenda of the European Commission has considered Fair Trade among the possible ways in which companies can switch to sustainable supply chains and production patterns. In addition, it states that “fair and ethical trade” should be promoted “in the international Corporate Social Responsibility (CSR) guidelines and principles through policy dialogue and development cooperation with partner countries”.


Another achievement for Fair Trade has been its inclusion in the Development Cooperation Instrument for the 2014-2020 period, which is the main funding instrument for development aid at EU level. Concretely, Fair Trade is mentioned in the Programme on Global Public Goods and Challenges.


Read some examples of EU policies on Fair Trade.


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