Quantity and Quality. Assessment of sustainability impacts of trade agreements

The breadth and depth of today’s trade agreements and the wide range of their effects pose a real challenge for assessing their potential impacts. Yet precisely their comprehensiveness makes assessment all the more necessary. A number of methodologies for assessment exist, and State practice is evolving as recognition grows of the need to respond to distributional, sustainability and social impacts of trade and as new tools and approaches emerge for assessing impacts of trade on a range of policies. Criticisms have also been leveled at the ex ante impact assessments (IAs) carried out so far. They have frequently been carried out too late to influence negotiations. Some have been framed too narrowly and others too broadly. Stakeholder participation tends to be sub-optimal. And in many cases, the IA findings are not taken into account in the final trade agreement. This session aimed to demonstrate that it is possible to improve our understanding of likely impacts of trade agreements on a range of sustainability and social objectives. Presenters discussed different methodological approaches to ex ante sustainability1 assessments of trade agreements and how these may be combined in order to get optimal results. The session addressed how conventional economic modelling tools work, and gave some examples of how they can be developed to better reflect social issues. The presentations included illustrations from ex ante assessments of the planned trade agreement between the European Free Trade Association (EFTA) and Mercosur (EMFTA). Panelists and participants agreed that (ex ante) impact assessment should ideally include qualitative and quantitative aspects, and that governments should improve their communication about the objectives and planned contents of trade agreements

Drawing the line between sustainable and unsustainable fish: product differentiation that supports sustainable development through trade measures

Background: Unsustainable production practices and increased demand for fish have aggravated negative social, ecological, and environmental impacts in fisheries and aquaculture. Measures to correct bad practices have mainly been introduced by private actors. However, there is increased demand for state intervention, particularly regarding trade regulations for fish and other agricultural products. Building on discussions about product differentiation through trade measures that favour sustainable products, this study looked at how sustainable and unsustainable fish has been distinguished in Switzerland. In interviewing experts in the fish trade and sales business in Switzerland, the research aimed at understanding the actors and forces that shape the concept of sustainable fish in the country. Results: Three ways of product differentiation for sustainable fish by private actors were identified in Switzerland: ecolabels, “Swiss produce”, and recommendations in the form of a “consumer guide for fish”. Currently, price is the main constraint on consumption of sustainable products in the country. Defining “sustainable fish” is challenging and subject to interpretation. All existing measures to differentiate sustainable from unsustainable fish products in Switzerland have shortcomings, particularly in terms of discrimination and inclusiveness. Fish ecolabels play a key role in product differentiation, but experts believe that they fail to accommodate all aspects of sustainability. Conclusion: Our findings imply that the Swiss state should play a more important role if it aims to fulfil the promise of article 104a of the Swiss Constitution, which seeks to foster sustainable production and cross-border trade relations that contribute towards this goal. Preferred trade treatment for sustainable fish products is a potential option to increase the production and consumption of sustainable fish. When designing measures for product differentiation, a careful choice is paramount to address sustainability in a holistic, inclusive, and transparent way and in order not to violate existing trade obligations. Due to similarities between the Swiss and other fish markets, we assume that governments in general and members of the European Union in particular must play an active role in shaping the definition and trade of sustainable fish products if they seek to comply with their sustainability commitments

(Un)sustainability in the Swiss fish market

Sustainability of fish as a food is a highly complex issue, especially in a global market with wildly varying measures and priorities in fish production and harvesting. Urs Baumgartner, environmental scientist, and Dr Elisabeth Bürgi Bonanomi, legal scientist and expert in sustainable trade regulation, tried to get a clearer picture of sustainability in the fish market of Switzerland, which imports almost all its fish. They discovered an urgent need for quality assurance by the state, provided for by nuanced frameworks for public procurement and trade

Illicit Financial Flows: Concepts and Definition

This article reviews and challenges some key tenets of the debate on illicit financial flows (IFFs), and articulates some lines of legal reasoning that can help to define the boundaries of what constitutes illicit flows (or not). The analysis challenges the ‘narrow’ definition of IFFs, arguing that it mis-characterises the legal terrain. It then brings much-needed clarity to the ‘broad’ definition of IFFs, by anchoring it in legal concepts, rather than ethics. The analysis tackles two further contested areas in the debate: the tension between ‘development’ and ‘legal’ approaches to IFFs, and aggregate versus disaggregate approaches under the IFF agenda. In these areas, the analysis briefly rehearses the state of the debate, questions some entrenched assumptions, and presents ideas that help to reconcile conflicting views. It bridges development and legal perspectives by firmly embedding the legal discourse in the Sustainable Development Agenda and the SDGs. It concludes with some summary observations

Countering Commodity Trade Mispricing in Low-Income Countries: A Prescriptive Approach

Commodity trade mispricing, especially the undervaluation of commodity exports, disproportionately harms low-income countries that depend on commodity exports for most of their export earnings. Such countries should (re)consider adopting rule-based pricing methods as a prescriptive alternative to transaction-based valuation systems. This article firmly grounds rule-based pricing in market parameters. It calls for a hybrid form of market-based price regulation in the framework of public–private models of supply chain governance, also integrating advice from independent experts. This article addresses this policy option within the parameters set by international law, considering state regulatory scope under international trade and tax law. It challenges the popular objection that prescriptive pricing methods breach international trade and tax rules. Instead, it emphasizes the complexity of any such legal assessment under international economic law

EU trade agreements and their impacts on human rights: study commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ)

The European Union’s (EU) trade policy has a strong influence on economic development and the human rights situation in the EU’s partner countries, particularly in developing countries. The present study was commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ) as a contribution to further developing appropriate methodologies for assessing human rights risks in development-related policies, an objective set in the BMZ’s 2011 strategy on human rights. The study offers guidance for stakeholders seeking to improve their knowledge of how to assess, both ex ante and ex post, the impact of Economic Partnership Agreements on poverty reduction and the right to food in ACP countries. Currently, human rights impacts are not yet systematically addressed in the trade sustainability impact assessments (trade SIAs) that the European Commission conducts when negotiating trade agreements. Nor do they focus specifically on disadvantaged groups or include other benchmarks relevant to human rights impact assessments (HRIAs). The EU itself has identified a need for action in this regard. In June 2012 it presented an Action Plan on Human Rights and Democracy that calls for the inclusion of human rights in all impact assessments and in this context explicitly refers to trade agreements. Since then, the EU has begun to slightly adapt its SIA methodology and is working to define more adequate human rights–consistent procedures. It is hoped that readers of this study will find inspiration to help contribute to this process and help improve human rights consistency of future trade options