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Delivering Solutions – R esponding to market realities in developing countries

Delivering Solutions – R esponding to market realities in developing countries. WTO Symposium, Geneva, 16 June 2003 Ritu Kumar Sustainable Trade and Innovation Centre. The sustainable trade trajectory. The integration of trade and sustainability factors is a structural trend

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Delivering Solutions – R esponding to market realities in developing countries

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  1. Delivering Solutions –Responding to market realities in developing countries WTO Symposium, Geneva, 16 June 2003 Ritu Kumar Sustainable Trade and Innovation Centre

  2. The sustainable trade trajectory • The integration of trade and sustainability factors is a structural trend • Market initiatives moving further, faster than regulation • Critical to go beyond “green protectionism” and “green trade opportunities” stereotypes • Time for the South to ‘take control’ of the agenda • STIC a developing country-led initiative

  3. Presentation • Market Realities • Case Study: Clothing • Sustainable Trade and Innovation Centre

  4. Market Realities

  5. Market realities • Sustainability factors are being mainstreamed in key international supply chains • Brand reputation rather than consumer demand or regulation is the major driving force • Dynamics differ between sectors and markets • Producers are price and standard-takers

  6. Business voices from the South “In five years from now, there will be no access to international markets for companies that do not show respect for the environment. It is becoming fundamental to international trade” Rafael Wong, Executive Vice President, Favorita Fruit Company, Ecuador

  7. Pressures for change • Regulatory(WEEE) • Civil Society (bans, boycotts) • Consumer demand (organics) • Supply chain management (codes of conduct) • Pioneering producers (Beximco)

  8. The Sustainable Trade Iceberg Regulation Ecolabels Certification Codes

  9. A breakdown of trust • Developing countries excluded from the process of standard setting (voluntary and mandatory) • Lack of transparency on changing requirements in export markets • Limited management and innovation capacity • High costs of labelling, certification and compliance • Inadequate understanding of Southern capacities in the developed world

  10. Clothing

  11. Clothing • Convergence of trade reform and business outsourcing generating savage price deflation • Rapid expansion producing environmental ‘hot spots’ (Tirupur…) • Health, social and environmental conditions becoming a basic ‘entry ticket’ to EU/US • Driven by risk and reputation not consumer demand -- so few price premia • MFA phase out is bringing new competitive challenges

  12. Responding to the challenge • International dialogue between Asian suppliers and EC retailers: January 2002 • Need for a uniform code developed in partnership with Southern suppliers • Information dissemination is essential • Training and capacity building for compliance and certification

  13. Lessons • Value added requires a dedication to innovation and connection to market trends • Globally excellent companies are emerging as market leaders • But industry wide initiatives are critical to exploit opportunities • Dialogue with buyers to implement sustainability measures is essential

  14. The Sustainable Trade and Innovation Centre

  15. STIC - Goals • Launched at WSSD • Goal: to assist developing countries to respond to, anticipate and ultimately shape the agenda • Objectives: 1.Exchanging information 2.Building capacity 3. Co-designing codes of conduct

  16. STIC - Governance • Chaired by Minster of Science, Technology, Arts, Culture, South Africa • International advisory board • Broad-based membership

  17. STIC - Activities • Regional consultations • Pilot projects: information dissemination, innovation • Dialogues

  18. STIC network partners Core Secretariat Information exchange/awareness creation Objectives Co-evolution of Voluntary Codes Innovation & Skills Development Producers in developing countries, buyers/importers, government agencies, NGOs Producers in developing countries, Scientific and Industrial Research Institutes, Companies of Developed and Developing Countries 1) Producers, traders,official agencies, NGOs in developing countries 2) Retailers, importers, official agencies in industrialised countries Beneficiaries Target Audience STICPossible products and services R&D B2BB2G Facilitation Facilitate Certificationfor SMEs - Textile- Electronics- Food- Forestry- Tourism SME’s access to New Financial Tools

  19. Websitewww.oneworldmarket.nl

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