Private Standards and the ‘Rules of Trade’

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Private Standards and the ‘Rules of Trade’

Question:

Has the adoption of process standards (such as on environment, labour, and/or on quality assurance) by companies through codes of conduct and/or through ISO standards effectively improved corporate social responsibility practice and led to better governance of trade relationships with distant suppliers? Discuss and present your views on this statement illustrating through relevant case studies.

Course Description:

The objective of this course is to analyse current issues, policy debates and theories relating to interactions between public and private global institutions and global trade rules, and the consequences that arise from this for development processes in the Global South. In today’s highly integrated world economy, national governments no longer have full control over their strategies for development and industrialisation. At the same time we are confronted with new and emergent challenges, from meeting international labour standards to addressing climate change, which require global responses. International institutions like the World Trade Organization, International Monetary Fund and the World Bank, as well as private corporations and non-governmental organisations increasingly play important roles in shaping the ‘rules’ of trade and thus the developmental experiences of developing countries. The emphasis of this course is on the challenges and opportunities that these international actors and new global trading rules bring to development policy and outcomes.

The first part of the course focuses on ‘public’ global institutions and their impacts on trade rules and development. The second part of the course turns to the influence of ‘private’ institutions. The third part will consider the role of the Rising Powers (the likes of China, India and Brazil) in shaping the dynamics of new trade rules, and its consequences for global governance. Thus, the course will focus on: the role of government in industrial development in a globalised world economy; structural adjustment programmes of World Bank and IMF and their impacts on development policy;  the role of MNCs in technology and knowledge transfers, and the effect of outsourcing by global buyers and integration into global production networks on export strategies in developing countries; new trading issues in the WTO and EU and their impact on developing countries; the role of global standards, especially labour standards, fair trade, in local patterns of development and global production networks. The lectures will draw on most recent developments and debates, the regional and country experiences, and theoretical grounds of the subjects.

Private Standards and the ‘Rules of Trade’

Introduction

A key feature of globalisation has been the need for greater co-ordination of complex transactions. There is now an increasing importance placed on conformance to international standards and the emergence of company specific codes of conduct as well as sector specific labels. There are various reasons for this. The rapid pace of globalisation, and with it the concomitant movements of finished and intermediate goods as well as services across vast distances has spurred on the need for greater harmonisation of weights, measures, sizes, and other qualities which include concerns for labour and environmental conditions. Such harmonisation reflects a very basic level of standardisation.  Greater flows across global value chains have also led to an increased need for harmonisation of quality assurance systems for diverse and dispersed suppliers and their global buyers.  At the same time, consumer preferences, particularly in the West, have undergone a significant shift, with growing concerns on ethical, social, and environmental issues.  Many of these concerns have been translated into new forms of private and voluntary standards, codes and norms, for example Fairtrade.

Private standards and codes, including corporate social responsibility initiatives point to new forms of governance in the rules of trade and the organisation of global value chains. They also challenge existing public regulatory initiatives and raise questions about the shifting nature of global governance in international trade and production arrangements. This session focuses on this issue, considering how private standards have emerged, how they are linked to global value chains and the evolving trajectories for such private and public-private standards. It will also consider what the governance implications are of these standards, and what they imply in terms of the ‘rules of trade’.