Products carrying the Fairtrade label are traded according to international standards set by Fairtrade Labelling Organizations (FLO) International. These standards are divided into three major sections: social issues, trade, and the environment.

The international network is made up of various labelling initiatives (Max Havelaar, TransFair, Fairtrade, etc.) and has been able to open up a wide range of markets through its promotion of a common label.

FLO Standards

Social

• Working conditions (ILO conventions)
• Organised farmers and workers
• Transparency
• Community projects

Trade

• Guaranteed minimum prices
• Fairtrade premium
• Long-term trading relations
• Pre-financing

Environment

• List of banned substances
• Environmentally friendly production techniques
• Promotion of organic agriculture

Producers commit themselves to respect working conditions (ILO conventions) and environmental criteria. The use of genetically modified seeds is banned, as is the use of pesticides that present a known health risk. In return, Fairtrade producers benefit from a fixed minimum price and a Fairtrade premium for social projects. Producers, independent experts, traders, and representatives of national labelling initiatives and civil society develop new standards and periodically review existing ones.

The Fairtrade cotton standards define working conditions not only in cotton production but also for the whole processing chain in accordance with recognised social criteria. This is true of every step in processing the cotton including ginning, spinning, dyeing, knitting or weaving, and garment making.
 

You can find further information about the standards by visiting:

http://www.fairtrade.net/product_standards.html

http://www.fairtrade.net/trade_standards.html