Abuse of Sustainability Standards; An Attack on Free Trade, Competition and Economic Growth

September 2011 – A Study by World Growth

The case to enhance sustainability is now being used to justify trade barriers, constraints on competition, denial of consumer choice and slower economic growth. In different spheres, governments, large corporations and NGOs are taking action which will produce these perverse results across a common set of industries and products. These are industries which have been selected by the World Wildlife Fund (WWF) to advance its environmental ambitions. They include timber and paper, vegetable oils, seafood, beef and sugar. The European Commission and some of its leading members are actively advancing these ambitions in public policy. The World Bank has also become an active partner. In recent times, we have seen sustainability standards specified as a condition for allowing imports as a means of pressuring producers in exporting nations to adopt them. As well we have seen companies like Unilever encouraged or pressured by WWF or other environmental NGOs to demand that suppliers comply with similar standards; and action by companies to supply to retail markets only products which comply with those standards, thereby limiting consumer choice. These developments raise some serious questions. This report aims to review these developments and assess their consistency with the principles of open global markets and competitive domestic markets to which most governments subscribe.

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