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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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Introduction Trends in Global Trade (1): Unilateral reduction of tariffs in developing countries
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Introduction Trends in Global Trade (2): Emergence of Global Supply Chains
Source: Baldwin (2012)
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Introduction Trends in Global Trade (2): Emergence of Global Supply Chains
Source: Foundation for Economic Education (2012)
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Introduction Trends in Global Trade (3): Emergence of standards
Source: ITC Standards Maps
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Introduction Trends in Global Trade (3): Emergence of standards
Example: Growth of Sustainability Standards in Coffee by Volume (2005-07)
Source: Giovannucci (2009)
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Introduction Trends in Global Trade (4): Increased use of non-tariff measures (NTMs)
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
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?
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(1) Legal status of environmental standards in the multilateral framework
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.”
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(1) Legal status of environmental standards in the multilateral framework
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 [..]”
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(1) Legal status of environmental standards in the multilateral framework
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(2) What is the empirical evidence?
Empirical Papers
i. Eco-labels
ii. ISO 14001
iii. TBT and SPS notifications
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(2) What is the empirical evidence?
i. Eco-Labels
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(2) What is the empirical evidence?
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(2) What is the empirical evidence?
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(2) What is the empirical evidence?
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(2) What is the empirical evidence?
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(2) What is the empirical evidence?
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.
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Environmental Standards and Trade
(2) What is the empirical evidence?
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
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
STANDARDIZATION AND THE INTERNATIONAL TRANSFER OF SUSTAINABLE TECHNOLOGIES WORKSHOP
Thank you very much for you attention!
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