Voluntary Sustainability Standards, Public Procurement, and Trade Policy: Trends, challenges, and development implications

This joint IISD-UNIGE webinar explores what the growing field of voluntary sustainability standards (VSSs) could mean for public procurement and trade policy, especially in developing and least developed countries.

This webinar asks how these standards, which can be seen across commodities ranging from coffee to cotton, might be integrated into trade agreements, market access regulations, export promotion measures, and procurement policy. Presenters also explore the development considerations and implications, looking at what the integration of these standards into trade policy could mean for developing and least developed countries.

The event includes an in-depth presentation on the new report from the UN Forum on Sustainability Standards, entitled Scaling up VSS through Sustainable Public Procurement and Trade Policy, by the report’s authors, Santiago Fernandez de Cordoba of the UN Forum on Sustainability Standards and Axel Marx from KU Leuven. The webinar then explores in further detail issues of market access regulation, trade, and public procurement.

The presentations are followed by a Q&A with the audience. 

Moderator

  • Cristina Larrea, Lead, Sustainability Standards, IISD

Panellists

  • Santiago Fernandez de Cordoba, Senior Economist, UN Forum on Sustainability Standards Coordinator, United Nations Conference on Trade and Development
  • Axel Marx, Deputy Director at the Leuven Centre for Global Governance Studies, KU Leuven
  • Nathalie Bernasconi-Osterwalder, Executive Director, IISD Europe, and Senior Director, Economic Law and Policy, IISD
  • Liesbeth Casier, Policy Advisor, IISD
  • Makane Moïse Mbengue, Professor of International Law, University of Geneva, Faculty of Law

Questions and answers from authors of the UNFSS report

The audience asked the panellists several questions that could not be answered within the session’s allotted time. The panellists have responded to some of these questions below.

Will this VSS expand to China?

Yes. Several VSSs are already operational in China. For several export-oriented companies, they are needed to access export markets and sometimes in business-to-business transactions.

There are also some Chinese VSSs which are specifically developed in China for Chinese companies. The country is very active on the national standardization process. Many are developed by government-related institutions like the Standards Administration of China (SAC). Please note that China’s Standards agency develops many standards which are voluntary and not mandatory, and many follow sustainability concerns.

Is it possible that consolidation is slowing down the growth in the number of VSSs?

We don’t really know what drives the stagnation in the rise of VSSs. Consolidation might be one valid explanation which might be applicable to some commodities. This consolidation can take different forms: (1) one or two VSSs might become dominant and grow, (2) there can be mergers. Another possible explanation is slowing demand for VSSs which discourage the establishment of new standards. But there might also be other explanations. We actually observe the stagnation of global rule-making initiatives with regard to other global governance instruments such as public–private partnerships.

How do you envisage monitoring, transparent reporting, and dynamic evolution of VSSs? If VSSs are part of legality or legal permits they are not voluntary anymore?

In case of the integration in legality verification schemes they do indeed become mandatory for those economic operators who want to export to territories which require such compliance. We don’t expect many changes to the current models of monitoring.

To what extent are VSS’s being incorporated in trade policies? Are we getting to any impactful levels? Expected timelines?

As outlined in the webinar there are currently three main ways in which they are used in trade policy: (1) references in FTAs, (2) import restriction and (3) export promotion. With regards to 1 we do not expect much impact in the short term since the inclusion of VSSs in FTAs is promotional and does not really give incentives for adoption. For 2 and 3, the impact can be more significant but only for a very small group of commodities since these policies are commodity specific.

It is important to analyze VSSs in trade policy instruments while always considering the implications for developing countries’ export, growth, and poverty reduction opportunities. VSS in trade policy should not become a barrier or create discriminatory effects marginalizing SMEs.

In 2021, are you planning to analyze the setback on VSS implementation as a result of COVID-19 lockdown in many producer countries? It has been a challenge for auditors to travel to perform audits or verification, the risk is to ease VSS achievement.

The UNFSS has already started looking into the implications of COVID-19 on sustainable value chains, including certification. They are in the process of publishing a report on “Post-Pandemic Provisions for Sustainable Agri-Food Supply Chain in Developing Countries.” The study looks at how the COVID-19 crisis has increased the challenges faced by producers in developing countries operating in food supply chains.

Global supply chains have been a boon to developing countries, but food systems have been affecting the planet’s climate. Furthermore, food system activities affect large sectors of employment in developing countries. Therefore, sustainable supply chains are linked to increased economic value, reduced environmental impacts, improved continuity of supply, while focusing on the well-being of stakeholders.