Private Standards and Market Access: A Mapping Exercise in the Textiles and Apparel Sector NORAD/UNIDO Project on Private Standards ECONOMIC COMMISSION FOR EUROPE COMMITTEE ON TRADE Working Party on Regulatory Cooperation and Standardization Policies Seventeenth session, Panel Session 3 Geneva, 3-4 November 2008 Müge Dolun

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth Where do we stand? Private sector was always the driving force behind standardization But there is still a number of definitions used for what a private standard is Literature survey identifies two main strings: on food sector (not just FSMS); “green” and “blue” standards Less information on other sectors, market prevalence of schemes, what they entail Still less information on how to implement – proprietary information for commercial use

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth Rationale Lessons learned from technical assistance projects Emerging needs of developing country exporters for practical information

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth The private sector is in the driving seat… Private standards dictated by TNCs and international supply chains are becoming important barriers to trade. The relationship between private-sector standards developers and the public sector has been strengthening. Private standards allow TNCs and major retailers to differentiate themselves in the marketplace, and control/rationalise their suppliers, gaining a competitive advantage. They cannot be easily tackled as part of multilateral trade negotiations in the present setting. In terms of technical cooperation for capacity building, working with lead firms in international supply chains is critical but remains a challenge

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth A practical ‘guidebook’ to emerging private standards to help developing country manufacturers and suppliers to respond to the growing importance of compliance with private standards in export markets. An assessment of implications of emerging private standards vis-à-vis other barriers to trade Identification of venues of more effective cooperation with leading private sector firms and more focused formulation of technical assistance projects Objective

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth Market access and standards Mandatory requirements/ Technical regulations Voluntary standards: - International Standards - Consortia/Association standards - NGO standards - Company standards/codes of conduct Quality specifications Test methods Social Accountability Environmental Management Management System

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth Components of the methodology ComponentConcern Mapping/scoping through publicly available information and certification companies Information availability and transparency Readiness of certification companies to contribute Product/process/management system standards, only consortia and NGO standards, only environmental/social/sustainable development/organic? Sectoral case studiesRegional representation Methodology – inventory, comparing market prevalence of schemes, implementation issues/differences? Buyer surveysHow to convince big buyers to take part? Concentrate on only big retailers or also middlemen? Value-chain approach

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth H&M Two sets of requirements: Labor Environmental (list of restricted substances Member of AFIRM Easy access to the documents that are available in 21 languages No indication on how to apply to the scheme. Declared program to promote and increase the use of organic cotton Source: UNIDO background paper (Pierre Hauselmann, Pi Consulting 2008)

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth Oeko tex Oeko tex is a labelling scheme. The standards are set by scientific institutes related to the textile industry with apparently minimum stakeholder input. While intended to satisfy the European market, (mainly German speaking countries) it applies to suppliers globally. Application procedures and formats are available online. There are verification institutes in many countries. Source: UNIDO background paper (Pierre Hauselmann, Pi Consulting 2008)

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth The study will concentrate developing the methodology only in the textile sector, to be applied to other manufacturing sectors. At the moment this pilot survey among garment exporters in Turkey is being initiated. Substantive support of the Textile Exporters Association and the Chamber of Commerce is being discussed. While it is clear that the current project financed by Norad and implemented by UNIDO will result in a practical inventory, the development, dissemination and updating of such information will require strong partnerships with other organizations especially with ITC, TSWG, UNCTAD, UNECE, UNDP and ISEAL project, Sippo, CBI and the Federation of Norwegian Commercial and Service Enterprises (HSH). Way forward Conclusions of the 1 st EGM

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth Thank you! For questions and comments: Müge Dolun Associate Industrial Development Officer Trade Capacity Building Branch UNIDO Tel: Website: