standardization and the international transfer of sustainable technologies workshop sustainability...

STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP

Sustainability and Technical Barriers to Trade

Environmental Standards as Technical Barrier to Trade?

Axel Mangelsdorf

BAM Federal Institute for Materials Research and Testing, Germanyand

Berlin Institute of Technology, Chair of Innovation Economics


Agenda

I. Introduction: Some trends in global trade.

(1) Tariffs

(2) Supply Chains

(3) Standards

(4) NTBs

II. Environmental Standards and Trade:

(1) What is the legal status?

(2) What is the empirical evidence?

III. Summary and Conclusion


Introduction Trends in Global Trade (1): Unilateral reduction of tariffs in developing countries


Introduction Trends in Global Trade (2): Emergence of Global Supply Chains

Source: Baldwin (2012)


Introduction Trends in Global Trade (2): Emergence of Global Supply Chains

Source: Foundation for Economic Education (2012)


Introduction Trends in Global Trade (3): Emergence of standards

Source: ITC Standards Maps


Introduction Trends in Global Trade (3): Emergence of standards

Example: Growth of Sustainability Standards in Coffee by Volume (2005-07)

Source: Giovannucci (2009)


Introduction Trends in Global Trade (4): Increased use of non-tariff measures (NTMs)


Introduction

Trends in Global Trade

(1) Reduction of tariffs

(2) Emergence of Global Supply Chains

(3) Emergence of standards

(4) Increased use of non-tariff measures (NTMs)

Are environmental standards legal instruments in the multilateral legal framework?

Is there evidence of ‘green protectionism’ through environmental standards?


Environmental Standards and Trade

(1) Legal status of environmental standards in the multilateral framework

Article XX GATT

TBT Agreement: Technical Regulations and Standards

SPS Agreement




Article XX GATT: General Exceptions

WTO Members have the right to adopt measures to protect the environment

Specific instances in which WTO Members may be exempted from GATT rules

Articles XX (b) and (g) are relevant for protection the environment:

(b) “[measures] necessary to protect human, animal or plant life or health”

(g) “[measures] relating to the conservation of exhaustible natural resources if such

measures are made effective in conjunction with restrictions on domestic

production or consumption.”




TBT Agreement: Technical Regulations and Standards

Article 2: Preparation, Adoption and Application of Technical Regulations by

Central Government Bodies

Article 2.2. “[..] technical regulations shall not be more trade-restrictive than

necessary to fulfil a legitimate objective [..]. Such legitimate objectives are, inter

alia: national security requirements; the prevention of deceptive practices;

protection of human health or safety, animal or plant life or health, or the

environment. [..].”

Article 2.4: “Where technical regulations are required and relevant international

standards exist or their completion is imminent, Members shall use them, or the

relevant parts of them, as a basis for their technical regulations [..]”




SPS Agreement: food safety, and human, animal and plant health and safety

regulations

SPS Agreement complements the TBT Agreement

Allows members to adopt SPS measures for environmental purposes

Measures must be based on a risk assessment

Measures should be non-discriminatory and transparent

Private Standards covered in WTO agreements? Non-governmental measures

Concerns about cost of (multiple) certifications which can be a problem, especially

for small-scale producers and particularly in developing countries




Empirical Papers

i. Eco-labels

ii. ISO 14001

iii. TBT and SPS notifications




i. Eco-Labels




i. Eco-Labels

Audits the organizations

Accreditation Bodies (AB)

Certification Bodies

International Accreditation Forum (IAF)

Accredits the Certification Bodies (CBs)

Peer Review by foreign Accreditation Body

Organization 1 Organization 2 Organization n




i. Eco-Labels

Eco-Labels and international trade:

Concerns: Lacks of checks in regard to proliferation of eco-labels and cost of

conformity assessment for developing countries and SMEs

Although not legal mandatory eco-labels often become economic impetrative

What is the empirical evidence?

Difficult to isolate the trade effect of labels




i. Eco-Labels: What is the empirical evidence?

German “Green Dot”: Domestic and foreign producers have to take back their

packaging and bear the costs of recycling

“Nordic Swan”: Low participation of developing countries in the scheme can only

marginally benefit from eco-labeling;

Trade distortion: un-labeled products (e.g. tropical timber) would be exported to

other markets

More and more exporters in developing countries are exposed to labels as more

and more products fall under the different schemes




iii. ISO 14001

Environmental Management Standard

Bellesi et al. (2005): Impact of ISO 14001 certifications on exports

Survey of 130 exporting

ISO 14001 evaluated as third most important factors determining selection of

suppliers (price, quality)

European customers rather require ISO 14001 certification compared to American

customers

ISO 14001 certification costs are not trivial but represents an advantage in

international markets




iii. ISO 14001

Massoud et al. (2010): ISO 14001 and challenges for developing countries

ISO 14001 often a requirement to do business in Europe

Developing country firms account for less than 3% of ISO 14001 certified

enterprises worldwide

Massive problems for firm from developing countries to achieve certification:

investments, lack of institutional capacity, skills, lack of local expertise, etc.




iii. TBT and SPS

Fontagne et al (2005): Impact of environmental TBT and SPS on trade

Focus on notifications of environmental-related regulations made to the WTO under

the TBT and SPS agreement

Gravity model with 114 exporting and 61 importing countries and 61 products

Results: positive impact for some products and negative for others

Positive: Medicaments, chemicals

Negative: Meat, vegetables


Summary and Conclusion

International Trade: Tariff reduction, global supply chains, proliferation of

standards, ethical trade, increased use of NTMs

WTO and environmental standards: GATT Article XX, TBT and SPS Agreement:

environmental standards can be used by member states when they are not

discriminatory, based on international standards, applied in a transparent manner

Evidence for green protectionism? Difficult to isolate the effect of environmental

standards but:

Eco-labels are a concerns for developing countries

ISO 14001 standards are often demanded in developed countries especially

by European countries

Environmental TBT and SPS: mixed impact, case sensitive


Thank you very much for you attention!

standardization and the international transfer of sustainable technologies workshop sustainability...

Documents

global trade

standards article

standards sps agreement

emergence of standards

emergence of standards

transparent private

itc standards maps

conclusion slide