Not Another Preachy Trade Story, With Paul Rice, Founder of Fair Trade USA

Flashback to the 1990s: Beanie Babies are all the rage, everyone’s doing the Macarena, and, chances are, you have at least one fanny pack. Al Gore is a prominent voice spreading awareness of the looming disaster of climate change, and consumer sentiment is shifting in favor of wanting to help save the planet. Stores such as Whole Foods are starting to experience exponential growth, introducing to climate-conscious customers organic foods and ethically sourced products. Fair Trade is becoming both a rallying cry and a stamp. 

Paul Rice is the founder of Fair Trade USA, which he launched as a nonprofit in 1998. It became a certification body for products that meet a set of sustainability and human rights qualifications in how they work with international suppliers on everything from coffee beans to fish to cotton.

 

But what’s changed since the ’90s is that customers are increasingly voting with their dollars. And companies have taken notice. That’s according to one founder who’s been at the heart of persuading companies to purchase sustainable products from abroad for decades.

“The data is clear in terms of consumer preferences, especially Gen-Z and Millennials, and their expectation is that brands will not harm,” Paul Rice tells co-host Christine Lagorio-Chafkin on this week’s From the Ground Up podcast. “I mean, no one wants to think that there’s sweatshop labor in their clothes or child labor in their chocolate.”

Rice would know. He created the Fair Trade Certified label and ran his nonprofit of the same name out of Oakland, California, for 26 years. He stepped down from his chief executive role in September of last year.

What he’s done since, he tells Christine, is think a lot about his organization’s legacy, work, and future. In April, he published the distillation of those thoughts in his first book, Every Purchase Matters: How Fair Trade Farmers, Companies, and Consumers Are Changing the World. In it, he explains how the 11 years he spent building a network of farms in Nicaragua inspired him to create Fair Trade USA to apply change on a bigger scale financially, by helping large international companies incorporate it into their supply chains.

“What we’ve seen over the last 20 years is real growth in this market and a chance for us to encourage companies to do more through our purchasing decisions,” he says.

There are few fiscal reasons not to, especially if brands are thinking long-term, Rice says. “I think smart entrepreneurs today are incorporating this thinking from the very beginning into how they develop their product lines and how they develop their supply chains,” he says. “And there are tons of resources. This is not hard anymore.”

Back to the question of tariffs, Christine asked Paul about the Trump administration’s rapidly shifting tariffs—and what they mean on the ground not just in the United States, but on farms and at suppliers around the world that engage in international and fair trade. It’s not good.

“Tariffs are bad for sustainability because if you’re a Mexican farm owner or a Mexican factory owner, and you now have a huge tariff placed on you, you’re going to have to cut costs to try and make your product more viable in the U.S. market,” Rice says. “What’s going to be on the chopping block, probably that new worker housing dorm that you are going to build or those energy-saving investments that you’re going to make. So sustainability investments are going to be impacted by the whole tariff issue.”

Additional research and information:

To read Inc.’s coverage on Paul Rice:Fair Trade Founder Paul Rice on What U.S. Businesses Lose in a Trump Trade War

Read Paul Rice’s Book: Every Purchase Matters

How Fair Trade Farmers, Companies, and Consumers Are Changing the World