UN Agencies To Examine International Standards, Potential Value For Developing Countries

Five United Nations agencies are joining efforts to tackle the rising issue of private standards which they say are affecting developing countries’ exports by creating market entry hurdles for those countries. A new forum will be launched this week, and will establish priority issues.

The United Nations Forum on Sustainability Standards (UNFSS) will be launched during a two-day conference, from 21-22 March in Geneva. The UNFSS is co-sponsored by the UN Food and Agriculture Organization (FAO), the International Trade Centre (ITC), the UN Conference on Trade and Development (UNCTAD), the UN Environment Programme (UNEP), and the UN Industrial Development Organization (UNIDO).

Voluntary sustainability standards (VSS) are developed by commercial and non-commercial private entities and apply in particular to the areas of health, safety, environment, social welfare, and animal welfare.

The multiplicity of those standards, which are not in nature mandatory but can set too high a threshold for small producers, can be of key importance for market entry, according to the UNFSS. The platform proposes to be an information and analysis of VSS platform with a particular focus on the potential value of VSS as a development tools for developing countries.

VSS, also called private standards, come with a set of challenge, according to a UNFSS presentation, such as “the risk of being used as anti-competitive instruments for achieving vested commercial interests,” their lack of interoperability leading to substantive compliance costs, and the complexity of some standards which can increase the marginalisation of smallholders and less developed countries.

There are also concerns about VSS undermining the World Trade Organization Technical Barriers to Trade (TBT) agreement and sanitary and phytosanitary (SPS) measures, according to the UNFSS. The forum was introduced at a TBT Committee meeting held on 5-7 March during which the issue of standards was discussed, with the International Organization for Standardization (ISO) describing efforts to develop international standards in line with WTO principles.

According to the UNFSS website, with a lack of consensus in the TBT and SPS, “to systematically discuss developing country concerns on private standards, developing countries urged UNCTAD for more engagement, information and analysis.”

All five agencies have longstanding mandates on private standards, Ulrich Hoffmann, senior trade policy adviser in the UNCTAD Division on International Trade and Commodities, told Intellectual Property Watch. But the UNFSS is “throwing everything into one bowl” to have a consistent approach to VSS, he said.

Market-Shaping Tools with an IP Flavour

Standards are very effective market-shaping tools, and they improve the position of some players in the market, Hoffman said. The more complex the standards, the less producers can meet them, he said, and dominant market players, equipped with quality management departments, tend to create more and more complex standards.

Certain use of standards can be compared to trademarks or patents, he said, in terms of market access, and they can create an anti-competitive behaviour. Large international retailers through standards can have “enormous power over producers,” said Hoffamn.

According to the UNFSS presentation, VSS should be scrutinised so that they are proportionate to the risk they claim to address, that they are scientifically-based, and that the burden of compliance is distributed fairly. They should not, the document says, “undermine or weaken rules of TBT and SPS agreements.”

Most standards are private, according to several sources, and most of them are proprietary, said Hoffman. According to the ISO, standards are strategic tools for business “that reduce costs by minimising waste and errors and increasing productivity. … They help companies to access new markets, level the playing field for developing countries and facilitate free and fair global trade.”

ISO standards are protected by copyright and belong to ISO, Rob Steele, secretary general of the organisation, told Intellectual Property Watch last year (IPW, Access to knowledge, 18 May 2012).

The copyright protection, “helps us to promulgate the standard so people know that there is a clear copyright associated” with our standards. And more importantly, he said at the time, “it also allows us to update our standards because in many cases technologies are moving along and our standards need to be reviewed and updated. We review and update our standards at least every five to seven years and we must have the opportunity and the right to do that.”

The preliminary agenda for the launching conference, which is open for registration, is here.