Exploring links between trade, standards, and the sustainable development goals

The World Bank
Cecile Fruman

Nestle put into place quality and food management systems and processes for offices and manufacturing facilities to ensure food safety, regulatory and quality compliance across the value chain. Photo Credit: Nestle, Flickr

Trade has a critical role in achieving the sustainable development goals. The movement of goods and services across borders, as well as flows of technology, ideas and people, all enable progress toward ending poverty, improving economic growth and job opportunities, and reducing global inequality.

Some of the sustainable development goals directly mention trade as a key component, but trade’s relevance does not stop there. In fact, one of the more interesting ways trade can contribute to achieving the SDGs is through goal number 12 – promoting responsible consumption and production. This is where international standards can have a big impact.

Globalization, and increased in participation in trade by developing countries, has created the need for a far wider number of firms to adopt accepted international standards. The International Organization for Standardization (ISO), through its multi-stakeholder technical committees, has developed and published many sets of standards that guide companies in areas such as product quality, energy efficiency, and environmental responsibilities. These standards can influence how companies produce goods, what makes it into the hands of consumers, and how industry as a whole affects our global climate and the future of sustainable development.

These issues were on top of the agenda at the recent ISO Week in China. I participated in a number of discussions there, including speaking with the ISO Development Committee about the role standards and trade play in achieving the SDGs.

In many ways, standards, such as the ones developed by ISO, can help ensure that trade makes the greatest possible contribution to achieving the SDGs. Standards build confidence in the quality and safety of traded products (especially those from developing countries) by proving that they adhere to certain requirements, level the playing field on environmental issues, help protect consumers from harmful practices, and help small and medium enterprises compete internationally by spreading technology and best practices.

However, the capacity to meet standards can be a challenge in developing countries encouraging their firms to trade more. This is because the majority of firms in developing countries are small and medium enterprises with limited management capacity, knowledge, or financing available to meet established international standards. Standards that are poorly documented or misaligned with international requirements complicate matters. Testing and certification of products can be costly and burdensome. All of these factors can make it harder for small businesses to compete – or contribute to global progress toward the SDGs.

This is why the World Bank Group supports governments in their efforts to modernize and upgrade their National Quality Infrastructure (NQI) programs, which focus on developing solid legal and regulatory frameworks around standardization. One example of this is an ongoing project with the Government of Egypt that seeks to develop an energy-efficiency standards and labeling program for electric motors. We also work around the world to build the capacity of SMEs and enhance their linkages with foreign direct investors so that these small firms can meet established standards and participate in global value chains.

The equation is simple. Standards are integral to international trade, and trade is a critical component of achieving the sustainable development goals. Then it follows that progress must be made on international standards in order for trade to contribute to the SDGs. Partnerships - and closer cooperation and support, especially for developing countries - will be needed to maximize the opportunities that exist.