Explain how the United States and Canada compare to the rest of the world, according to the Human Development Index. What does the index measure?

The fair trade movement was created to promote the ethical exchange of goods from production to shelf. At its core,

fair trade is meant to benefit the producers; typically, the

poorest farmers and laborers in developing countries. Although some critics argue that the system may cause more

damage than good, producers who adhere to fair trade

guidelines generally receive higher compensation than if

they were to sell in conventional markets. Fair trade supply

chains tend to be shorter, and consumers who purchase

fair trade products typically pay more than for conventional substitutes (Nelson and Pound, 2009). To qualify

for fair trade certification, producers must meet standards

managed by private third party certification organizations.

These standards vary, based on the product, region, and

third party system in ways that might not be fully understood by consumers.

The fair trade certification industry is complex. Dozens

of certifying bodies are responsible for labeling claims. The

largest governing body is The Fairtrade Labeling Organizations International (FLO-I), which serves as an umbrella

organization for several groups. In 2012, the main North

American member—Fair Trade USA—left FLO-I to pursue

its own standards. This impacted FLO-I and perhaps the

United States and Canadian markets—but in which ways?

Total global fair trade sales have been increasing. In 2011,

global retail sales topped $6.7 billion, an eight-year compound annual growth rate of ~25% (Figure 1). While the

United States and Canada accounted for sales of more than

$1.7 billion in 2011, this is still a relatively under-developed

market compared to the EU. In 2011, before Fair Trade

USA left FLO-I, the U.S. market share was 25% compared to the EU’s 65% (FLO-I Annual Report). For the first time,

2012 saw a decline in the value of FLO-I-certified sales as

Fair Trade USA increased its share of the market.

Explanation:

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