Trade Standard DRAFT Version 2.0.0 Fair Trade USA Published: Effective: TBD Note on Translations DRAFT Version 2.0.0 This document is available free of charge in electronic format on the Fair Trade USA Standards website: https://www.FairTradeCertified.org/business/standards All rights reserved © 2018 Fair Trade USA No part of this publication may be copied, reproduced, distributed, published, or transmitted without full attribution to Fair Trade USA. Note on Translations Translation accuracy of any Fair Trade USA standard and policy document into languages other than English is not guaranteed nor implied. For any question related to the accuracy of the information contained in the translation, refer to the official English version. Any discrepancies or differences created in the translation are not binding and have no effect for auditing or certification purposes. Contact Fair Trade USA 1500 Broadway, Suite 400 Oakland, CA 94612 USA Phone: (510) 663-5260 Fax: (510) 663-5264 E-mail: [email protected] Website: www.FairTradeCertified.org Trade Standard September 2018 Page 2 of 54 Contact DRAFT Version 2.0.0 Contents INTRODUCTION .......................................................................................................................................................................................................................... 4 Fair Trade USA’s Mission and Vision ..................................................................................................................................................................................................................................................... 4 About this Document .............................................................................................................................................................................................................................................................................. 4 Using the Trade Standard ...................................................................................................................................................................................................................................................................... 6 Other Important Documents ................................................................................................................................................................................................................................................................... 8 Additional Information on Fair Trade USA’s Standards and Certification Process................................................................................................................................................................................ 9 MODULE 1: GENERAL REQUIREMENTS ................................................................................................................................................................................... 11 SUB-MODULE 1.1: Traders are Transparent with Fair Trade USA and Approved Conformity Assessment Bodies [TR-BR – Basic Requirements] ...................................................................... 11 SUB-MODULE 1.2: Product Sourcing .................................................................................................................................................................................................................................................. 13 SUB-MODULE 1.3: Use of Fair Trade Certified Seal and Claims ....................................................................................................................................................................................................... 15 NEW: SUB-MODULE 1.4: Labor Rights .............................................................................................................................................................................................................................................. 15 NEW: SUB-MODULE 1.5: Environmental Protection .......................................................................................................................................................................................................................... 16 MODULE 2: ECONOMIC DEVELOPMENT .................................................................................................................................................................................. 17 SUB-MODULE 2.1 Fair Trade Price Requirements [PR] ..................................................................................................................................................................................................................... 17 SUB-MODULE 2.2: Fair Trade Premium Requirements [FTP] ............................................................................................................................................................................................................ 21 SUB-MODULE 2.3: Transparent Trade Relationships and Purchase Agreements [Contracts (CT)] ................................................................................................................................................. 24 SUB-MODULE 2.4: Pre-Finance [PF] .................................................................................................................................................................................................................................................. 31 SUB-MODULE 2.5: Sustaining Trade [ST] .......................................................................................................................................................................................................................................... 33 MODULE 3: PRODUCT TRACEABILITY ..................................................................................................................................................................................... 36 SUB-MODULE 3.1: Traceability through Documentation [TD] ............................................................................................................................................................................................................ 37 SUB-MODULE 3.2: Physical Product Traceability [PT] ....................................................................................................................................................................................................................... 40 NEW: SUB-MODULE 3.3: Identity Preserved Traceability ................................................................................................................................................................................................................. 41 SUB-MODULE 3.4: Mass Balance Traceability ................................................................................................................................................................................................................................... 43 SUB-MODULE 3.5: Retro-certification ................................................................................................................................................................................................................................................. 45 NEW: SUB-MODULE 3.6: Consignment .............................................................................................................................................................................................................................................. 47 NEW: ANNEX A: CALCULATING PRICE FOR PRODUCTS WITH A FAIR TRADE MINIMUM PRICE OR DEFINED RELEVANT MARKET PRICE REFERENCE 50 Section A.1: Adjusting Fair Trade Minimum Price and Relevant Market Price .................................................................................................................................................................................. 50 Section A.2: Other Deductions ............................................................................................................................................................................................................................................................. 52 Section A.3: Government Price References ........................................................................................................................................................................................................................................ 52 NEW: ANNEX B: INCLUSION OF DIFFERENTIALS IN PRICE CALCULATION FOR COFFEE ..................................................................................................... 53 Section B.1: Calculation of Fair Trade Price ........................................................................................................................................................................................................................................ 53 Section B.2: Determining Prevailing Differentials ................................................................................................................................................................................................................................ 54 Trade Standard September 2018 Page 3 of 54 Fair Trade USA’s Mission and Vision DRAFT Version 2.0.0 Introduction Fair Trade USA’s Mission and Vision Fair Trade USA is the leading third-party certifier of Fair Trade products in the United States. 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