1. ECE Working Party on Regulatory Cooperation and Standardization Policies Geneva, 3-4 November 2008 Presented by: Ulrich HOFFMANN UNCTAD secretariat

2. 2222 Market Importance of V SS 2 VSS are of key importance for Market ENTRY and sustainable developmt Unless pro-actively addressed SS can become a serious market entry hurdle. Real developmental opportunities exist in the light of strong dynamics in markets for sustainably produced products, which generally expand much faster than conventional agricultural markets. Average Annual Rate of Growth of Key SS Markets (2004-2006) Conventional Food Markets 2-3 % 3-4 %

3. 3 1. SMEs and small farmers whom governments and donors most want to help are those who may be the least able to manage the changes required to meet the requirements of voluntary sustainability standards (VSS) 2. VSS are seen by most key policy makers as a technicality, not a strategic policy issue of: -cost internalization -promotion of sustainable production and consumption -sustainable competitiveness in lucrative markets 3.Fear that sustainable governance related to VSS might undermine the hard-won improvements in market access through the TBT & SPS Agreements (e.g. food-miles) Three Key Paradoxes

4. 444 Some Key Concerns 4 Quite often, several VSS are required for effective market entry (e.g. organic, fairtrade, GlobalGAP) -- disproportionate costs, marginalization of SMEs Lack of interoperability of VSS; harmonization/equivalence are concepts rather than practically applied tools (exceptional example – ITF equivalence tools) The higher the level of harmonization/equivalence, the higher the incentive to break away, creating new standards or using “standards +…..” approaches Private VSS often used as part of market differentiation and competitiveness instrument – may have implications on standard governance and market domination Governments might support the objectives and even the application of VSS, but often there is policy incoherence (e.g. perverse subsidies, land tenure/ownership system, fiscal measures, extension services etc.) Due recognition of the fact: Many producers do not lack the will but the capacity to use and comply with VSS

5. 5555 In East and South-East Asia, ¾ of horticultural export is intra-regional trade Regional cooperation on harmonization and equivalence of SS is thus very important Another Example: East African Organic Products Standard (EAOS) - Kenya, Tanzania and Uganda, later joined by Burundi and Rwanda or the Pacific Organic Standard. Sub-regional cooperation in building infrastructure for accreditation and certification, testing (e.g. laboratories) Regional Issues

6. 66 Importance of Direction of Trade and VSS 66 Share of FFV exports from / to EU-15AsiaUS & Canada Latin America Africa Asia (Malaysia, Thailand, Vietnam) 107010 Latin America (Brazil, Argentina, Costa Rica) 483020 Africa 6922 For Asia, intra-Asian trade is the most important export market. In Latin America, exports to the EU and North America are important. Intra-LA trade is only important for Argentina (almost 50% of total exports). Export dependency is highest in Argentina and Costa Rica. Domestic- market concerns play a more important role in the other countries.

7. 777 Role of Governments on Private Voluntary Sustainability Standards 77 Surveillance, Supportive and Facilitating Role Govern. / St-setting Facilitating Investment Devising flanking/support policies Assuring policy coherence Facilitating stakeholder dialogue - Transparency, Inclusiveness, legitimacy, trade restrictiveness - Anti-trust - Assuring coherence between mand & PVS - Facilitating interoperability between PVS - in physical infrastructure - in SMTQ systems & institutions - directing donor funding accordingly - awareness raising/ training - financial support - Info instruments/ independent evalt of PVS - SME supprt - among gov agencies dealing with PVS - between public & priv requirements (e.g. perverse incentives) - towards donors - facilitating and engaging in stakeholder dialogue on development & impl of PVS Capacity Weaknesses

8. 88888 For more detail on governmental role: Conclusions and Recommendations of the Workshop on Making Sustainability Standards Work for Small-scale Farmers www.unctad.org/trade%5Fenv/meeting.asp?MeetingID=249 UNCTAD Consultative Task Force on Environmental Requirements and Market Access for Developing Countries (CTF): Analysis of trade and developmental impact of VSS www.unctad.org/trade_env