Meanwhile, in the U.S., ethical fashion would be more accurately described as an undercurrent.

The term “ethical fashion”–which encompasses but goes beyond the more familiar “eco” or “green” fashion catchphrases–is still not on the radar screen of most Americans. In addition to using eco-friendly or organic materials, ethical fashion denotes the end-product marketer’s commitment to ensuring humane labor standards and fair-trade wages for garment workers. That means wages that afford workers “a relatively comfortable quality of life within the context of their local area,” according to Fair Indigo, one of the pioneering U.S. brands.

“Europeans are definitely much more aware of these issues,” says Summer Rayne Oakes, founder of SRO, a brand strategist and market research firm focusing on socio-environmental sustainability, green marketing and environmental communications. International systems for certifying and labeling fair-trade agricultural products emerged in the ’80s in Europe, but didn’t begin to gain a foothold in the U.S. until the ’90s, she notes. And cotton certified as fair trade has been available in Europe since 2005, when Fairtrade Labeling Organizations International (FLO), the umbrella organization for labeling initiatives in more than 20 countries, established a certification/labeling process for that commodity.

In the agricultural arena, there has been substantial fair-trade progress here, as well as abroad. But fair trade in finished apparel has proved a more difficult nut to crack, even in Europe.

One big reason is that there is as yet no independent, industry-specific third-party certification/labeling process for fair-trade clothing. Whereas it’s easy to monitor the distribution chain for commodities like coffee, which have a straightforward model based on market price, “apparel poses extremely convoluted supply-chain issues,” points out Oakes.

TransFair USA, the only independent fair-trade certifier in the U.S., has focused on food certification. Last year, the organization conducted a feasibility study on creating fair-trade garment standards and shared the research with FLO and its European counterparts. Hoped-for next steps include certification pilots in a few garment factories, according to Levi Strauss & Company‘s Jill Sothard, senior manager for community affairs, corporate citizenship and the Levi Strauss Foundation, which helped fund last year’s study and continues to work with TransFair USA.

It’s clear that developing such standards will take years. But with all signs pointing to fair-trade issues having increasing impact on apparel going forward, pioneering brands are finding lucrative niches, and mainstream players are beginning to take note.

Sizable companies dedicated to fair-trade apparel, such as People Tree and Gossypium, are more common in Europe. But U.S.-based companies such as Fair Indigo, American Apparel (which uses only U.S. labor), NoSweatApparel and TeamX are getting more and more media coverage for their commitments to “sweatshop-free” practices, and they are growing by leaps and bounds.

Generally, such companies–as well as nonprofits like Mercado Global and Lotus by League of Artisans–partner with artisan cooperatives in developing countries to produce fair-trade products, sell them online and through stores, and reinvest substantial revenue back into the partner communities.

Big traditional brands “are waking up to fair trade as an issue that’s on the discussion table,” reports Oakes. “They’re beginning to realize that fashion can be a sustainable development tool that lifts people out of poverty. But fair trade isn’t necessarily their first priority. They’re focusing first on what their ‘green strategies’ will be.”

U.S. Brands Join Nonprofit Still, seeds of ethical fashion are being planted. Many types of U.S.-based companies–including apparel brands Eddie Bauer, Eileen Fisher, Donna Karan, Levi Strauss, Lilly Pulitzer, Liz Claiborne, Nike, Reebok, Perry Ellis and Phillips-Van Heusen, and retailers Nordstrom, Sears and Wal-Mart–are members of Business for Social Responsibility, a nonprofit that provides companies with practical assistance in “demonstrating respect for ethical values, people, communities and the environment.”

Levi Strauss is one example of a big brand spearheading ethical initiatives. The Levi Strauss Foundation provides grants to many U.S. and international organizations working to improve workers’ quality of life, including Mercado Global. Ten U.S. Levi Strauss stores have just begun testing a line of fair-trade scarves produced by Mercado licensees in three Latin American countries, reports Sothard.

Levi Strauss also pioneered a supplier code of conduct that sets specific fair employment standards for its suppliers, and monitors these through factory assessors worldwide. Thousands of other companies have modeled their own supplier “terms of engagement” on this system.

Oakes lauds companies’ individual efforts, but stresses that establishing formal fair-trade certification systems for apparel will take a lot of groundwork. “Before companies can transition from their normal modus operandi, they need to achieve transparency–meaning a real understanding of all of the people in the supply chain, or the ‘chain of custody’,” she says. “That’s particularly difficult in large corporations.”

The U.S. apparel industry is “trying to catch up” with Europe on fair trade, says Sothard, and “if TransFair USA can figure out how to establish certification standards, the impact will be huge.”

[image above: Summer Rayne models Judith Condor-Vidal fair trade fashion at the Ethical Fashion Show]