Written by Lance Thompson, Article No. 102 [UNCTAD Transport and Trade Facilitation Newsletter N°97 - First Quarter 2023]
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Quality infrastructure as the next major area in the international supply chain
When we think of trade and transport facilitation, we think of, for example, streamlining physical supply chains, optimizing transport hubs, expediting border crossings or reducing administrative burdens. There are additional links within this chain though which are often times overlooked. Before goods are packaged and shipped, they need to be verified for conformity to safety regulations which is a key element of quality infrastructure.
The increasing role of quality infrastructure
Reading the term “quality infrastructure,” many will immediately think of the physical infrastructure linked to transportation. However, in this context, quality infrastructure is comprised of regulations, structures and bodies (such as accreditation, market surveillance, metrology, standards development bodies) that exist in a country/economy for supporting trade on a fair market to promote safe products and services in a sustainable society.
Many countries – and indeed consumers – around the world want to make sure that the products that are put on the market are not only safe for consumption (the traditional role of market surveillance), but that they are also sustainably and socially responsible. International standards and technical regulations can respond to this by integrating these concepts into the product design. This in turn creates new requirements to test the products for these aspects even before they leave the factory.
The mainstreaming of the United Nations’ Sustainable Development Goals (SDGs) creates increasing awareness that certain aspects of environment, social and governance (ESG) indicators can be integrated directly into product design from the outset. For example, the conception of a product can integrate aspects of how the product will be used after its intended, initial use. Using biodegradable fibers for bags ensures that once the intended purpose of transporting items is completed and that the bag is discarded, it will not pose a threat to the environment. Similarly, designing electronic products that can be easily disassembled can allow for potential reuse of the components and eventually ensuring longer life spans with product repairing possibilities.
Other concepts such as gender mainstreaming can also be integrated into product design, ensuring that the resulting products are equally relevant to men and to women. For example, many household cleaning products test the chemicals against the male biological system whereas the components may affect women differently. By integrating tests against the female biological system, the products become safer for all.
Standardization, metrology, market surveillance, conformity assessment… the key elements of quality infrastructure for trade are vectors for assisting in the implementation of the SDGs. As we live in a consumer driven society, integrating the SDG targets directly into product design will provide momentum to the 2030 Agenda.
The invisible link on the supply chain
This supply chain link of product compliance is progressively moving to the forefront. In facilitating trade and transport, we have concentrated on the main links of the supply chain which is visible during the movement of the goods. In the future, we may need to start to look at what comes before this movement during the product conception phase.
The next areas of technical barriers to trade may potentially come from the integration of more requirements for ESG criteria into product designs which may result in products with slightly more complicated design and compliance procedures. This may ensure that products are safe for the environment and take into consideration the needs of all humans and thus contribute to leaving no one behind. But at the same time, this may deepen the gap between developed economies and developing / transitioning economies.
The cost of compliance for ESG criteria may adversely affect producers in developing and transitional economies. They will need to conform with slightly more complicated designs and compliance criteria. Producers in developed economies may have a slight advantage as many have embraced the principles of ESG for many years, especially since this is in high demand by consumers in their markets.
This may become an indirect method to favour nationally produced goods over imported goods, even if it would apply the World Trade Organization principle of national treatment (i.e. imported and locally produced goods should be treated equally). Moving forward, governments will need to ensure a proper balance between the justifiable need to ensure ESG criteria into product design in order to attain the SDGs and the potential adverse effects this may have on producers in lesser developed countries.
The UNECE Working Party on Regulatory Cooperation and Standardization Policies (WP.6) is working on these themes. Interested experts are welcome to join. Please contact the secretariat at firstname.lastname@example.org
Lance Thompson, Secretary to UNECE Working Party on Regulatory Cooperation and Standardization Polices (WP.6), email@example.com