UNFSS Academic Advisory Council Webinar

Roundtable: Sustainability Standards and Economic Concerns

Virtual Webinar

17 June 2021, 2:00pm – 3:30pm (CET)

Register at Evidensia

Programme

14:00 – 14:05

Opening Introduction by

Rita Mendez, Senior Coordinator, Impacts and Evidence at Evidensia, ISEAL
14:05 – 14:15

Setting-the-Scene by

  • Santiago Fernandez de Cordoba, Senior Economist and UNFSS Coordinator, UNCTAD
  • Bernard Hoekman, Director, Global Economics at the Robert Schuman Centre for Advanced Studies, European University Institute (EUI)
14:10 – 14:55

Impulse givers:

  • Stefano Ponte, Professor, Centre for Business and Development Studies (CBDS), Copenhagen Business School
  • Mercedes Aráoz Fernández, Professor of Economics, Universidad del Pacifico, and Former Second Vice President of Peru
  • Thomas Dietz, Professor, University of Muenster

Moderated by Siti Rubiah Lambert, UNFSS Secretariat, UNCTAD
14:55 – 15:25

Commentators and Q&A

  • Vera Thorstensen, Professor, Head of the Centre for Global Trade and Investment Studies, Getulio Vargas Foundation (FGV) Brazil
15:25 – 15:30

Concluding Remarks by

Vidya Rangan, Senior Manager, Impacts and Evidence, ISEAL

Context

The expansion of international trade and the complexity of global value chains (GVCs) have brought welfare benefits across the globe; however, it may fail to address the adverse environmental, social and economic impacts. This implies the necessity to transform towards a more sustainable value chain. Voluntary sustainability standards (VSS) could be considered as tools and instruments that contribute to this transformation. VSS specify requirements that cover a wide range of environmental and social, and economic issues. They allow producers of environmentally safe and socially and economically responsible goods to credibly convey this information to consumers who care about how products are made.

From the economic perspective, there are different channels through which VSS can potentially affect the market structure and GVCs participation.[1] First, by converting products to markets with higher demand; where consumers are willing to pay a premium price for items produced under sustainable conditions. Second, by changing the relations of participants with other chain actors, policymakers, and other organizations. And third, by altering the rules of value chain involvement and participation and the distribution of authority to make these rules.[2]

The ongoing discussions on the economic impacts of VSS are mostly around:

  • Their effect on trade, GVCs participation, and market access and structure.
  • Their impact on employment creation, wages and poverty alleviation.
  • Their impact on the level of productivity and product quality.
  • Their impact on transferring knowledge and creating innovation and better practices.
  • Their legal status in the WTO

VSS can be catalysts or barriers to market access and trade. While standards could lead to increased exports, the expansion and increased influence of VSS have become an increasing concern for suppliers, particularly those in low-income countries. The chief argument for voluntary standards having a deleterious impact on market access and international trade is the burden of compliance costs.[3]

On the other hand, it is argued that the use of VSS could improve workers’ well-being, and employment conditions.[4] VSS are also claimed to positively impact productivity, product quality,[5] transferring knowledge, and creating innovation and better practices. And facilitate smallholders access to finance.[6]

[1] https://unfss.org/wp-content/uploads/2018/09/UNFSS-3rd-Flagship-Report-FINAL-for-upload-1.pdf

[2] https://www.iisd.org/system/files/publications/voluntary_sustainability_standards_gov.pdf

[3] https://ageconsearch.umn.edu/record/90586/

[4] https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1467-9701.2012.01463.x?casa_token=RyJL3FmboPsAAAAA:yDLL-Cjlq2UP2PS_S3pjg5l1dAObO4rGzOGP-QaCa5xZVxG6TnbokmYWJF9AGjXWRsczfxIr9qUWPZc1

[5] https://www.oneplanetnetwork.org/sites/default/files/vss-systemic-impacts-white-paper_final-oct-2018.pdf

[6] https://www.iisd.org/system/files/publications/financial-service-providers-agricultural-producers.pdf

The Dialogue

Through this roundtable discussion, The UNFSS’s Academic Advisory Council (AAC) members are brought together to foster the debate on sustainability standards and economic concerns. The meeting will cover the means of maximizing VSS economic benefits while minimizing their risks. This roundtable discussion will help provide inputs and develop a common foundation upon which further research and discussion in this area could be conducted. This dialogue is compounded with questions such as:

  • What is the role of VSS in transforming the GVCs structure and participation?
  • From a developing and least developed countries perspective, what are the determinants of VSS being catalysts or barriers to trade? And how to enhance their favorable impact on trade?
  • On which economic dimensions would VSS be a challenge to address, and which of these dimensions can VSS make a difference and/or should prioritize?
  • What are some of the main knowledge gaps and where we need more research/type of research?

UNFSS is an initiative of 5 UN agencies: UN Conference on Trade and Development (UNCTAD), International Trade Centre (ITC), UN Industrial Development Organization (UNIDO), UN Food and Agricultural Organization (FAO) and UN Environment. UNFSS addresses the sustainable development value of Sustainability Standards by pooling resources, synchronizing efforts, and assuring policy coherence through a multi-stakeholder approach.