Compliance with regulations and standards plays a central role in global trade competitiveness, in particular in the context of global value chains. What are the implications of these instruments for the achievement of the Sustainable Development Goals? There has been an important shift in the purview of trade barriers to market entry in the high income economies, from the nation-state to the corporation and transnational agencies. Insofar as governments control import restrictions, there is a reduced emphasis on prices and a growing role for regulations which are generally mandatory for market entry. The lead firms dominating importation into high income economies employ a battery of standards to achieve multiple objectives. Directly and indirectly, standards and regulations not only determine the terms of market entry but also the extent to which different producers position themselves in global value chains (GVCs) in a manner that provides for socially and environmentally sustainable income growth. International trade, driven by GVC dynamics, is intensely competitive. This requires producers to continuously improve skills and dynamic capabilities, because otherwise firms are unable to protect or upgrade their role in the international division of labour. Economic upgrading is hence crucial to achieving sustainability goals and may well be...
Written by Raphael Kaplinsky, Mike Morris