DEPUTY DIRECTOR-GENERAL ALAN WM. WOLFF
Video Message for the Economic Times Packaging Virtual Summit 2020 :
“Amplifying Trade: Thinking Packaging, Product and Planet”
17 September 2020
My thanks to the Economic Times for inviting me to bring the WTO's work and the international trade perspective to the Packaging Virtual Summit 2020.
The focus of my remarks is on “Amplifying Trade: Thinking Packaging, Product and Planet”.(1)
International trade has contracted — when will we recover to pre-crisis levels?
Envisioning trade as part of the economic recovery trade, may appear optimistic, but the early evidence is promising.
In April, we were looking at world trade contracting in 2020 due to the pandemic and the efforts to fight it; the prediction was for a sharp decline, from between 13% in the best case to an even more appalling 32% in the worst-case scenario. By the end of June, the numbers available confirmed that trade had indeed contracted in the first half of the year with merchandise trade dropping by 18.5%. So, we appear to have at present avoided the worst-case scenario.
As the pandemic has disrupted human activity across the globe, it is important to recall that people still need essential supplies — pharmaceuticals, medical equipment, and food. All these and other (non-essential!) products are still being packaged and traded, albeit with disruptions, within and across borders.
Moreover, digital commerce has become far more important during these last six months, and much of that commerce resulted in the flow of physical products, things that people still want to buy. The news is far less good for services, which often call for personal interactions.
Indian businesses, and the packaging industry, need to remain prepared and play its part in shaping the new normal.
International trade is needed for Covid-19 recovery
International trade and co-operation are needed now more than ever for the recovery. In the short-term, a prime focus has naturally been on securing essential supplies. In the medium to longer term, however, our attention must be on how to foster trade in a post-pandemic world.
Here the packaging industry has an important role to play. End users of products are understandably concerned about health, hygiene and safety. Packaging can add more value than surface appeal, or protection against damage to the product on its way to market. Consumers are no longer only concerned about the product itself and its attributes. They are increasingly seeking reassurance on whether or not the product is safe.
If there is a trend towards more packaging and not less, you can and should expect more or at least different regulations and requirements to take account of health (Covid-19), environmental and other concerns. This poses both challenges and opportunities.
Keeping informed on evolving regulatory requirements is important. Import duties or tariffs can raise the cost of a product and can be a significant barrier, but it will not stop trade altogether. On the other hand — an import or export ban — or the inability to meet or demonstrate conformity with existing regulatory requirements (on the product or its packaging) may shut the product out from the market altogether.
So, how can WTO work support the private sector and the packaging industry?
There are WTO rules and transparency tools that can be very helpful. There will also be a number of environmental considerations, including recent work in Geneva on plastic pollution, trade and the circular economy.
WTO rules, transparency tools for products and packaging
The WTO provides industry with the means to keep track of the fast-evolving regulatory landscape.
In the WTO rule book, the WTO Technical Barriers to Trade (“TBT”) Agreement addresses regulatory interventions — standards, regulations, and conformity assessment procedures — that can and often do affect trade.
When it comes to packaging, the TBT Agreement is relevant because regulations are not exclusively about the product itself but often deal with the way products are packed or how they are labelled. Packaging is explicitly mentioned in the definitions of two key terms of the TBT Agreement: (mandatory) technical regulations; and (voluntary) standards.(2)
TBT disciplines are unique. They balance government’s right to regulate and pursue public policy objectives such as protection of the environment, human health and safety while requiring that regulations avoid discriminatory or unnecessary obstacles to trade.
Let me give you a few examples of regulations with an impact on packaging: it is increasingly common for packaged food and beverages to have nutritional labelling requirements. In India, the Maximum Retail Price (MRP) is also printed for consumer information along with the usual expiration or “best to use before” date.
Across many countries, regulators have applied stringent statutory warnings on the packaging of tobacco products — with textual health warnings, supplemented by pictures depicting health risks. In some jurisdictions, plain packaging is mandatory.
In the areas of animal, plant, human life or health and food safety, Sanitary or Phytosanitary (SPS) measures may also be applied and these should be issued and implemented in accordance with the WTO SPS Agreement.
Transparency is important. Early notice of draft measures helps prevent frictions between WTO Members and fosters co-operation. WTO notifications are publicly available. Globally, 8% of all measures notified to the TBT Committee concern packaging or labelling. Of India's 168 TBT notifications, 17% relate to packaging or labelling. All stakeholders, including the private sector, can in real time track products, sectors or markets of interest using tools such as the ePing alert system.(3)
The working practices of the WTO TBT Committee has also created space for addressing specific trade concerns (STCs). The private sector can — through their governments — use this and other mechanisms to channel concerns about transparency, discrimination or trade-restrictiveness of proposed and existing measures. About a half dozen STCs have been raised by India's trading partners on the topic of packaging or labelling. Recent examples include concerns from India's trading partners about its Draft Food Safety and Standards (Labelling and Display) Regulations. The stated concern dealt with front of pack nutritional labelling, without, it was said, giving trading partners adequate time to adapt or not relying on international standards.(4)
The use of international standards is an important pillar of the TBT Agreement. Regulations and standards (including those on packaging) should normally be based on international standards. By promoting coherence and regulatory harmonization, international standards can be of value to the private sector. The TBT Committee has adopted “six principles” (5) that encourage international standard-setting bodies to observe this set of procedures, all based on the use of international standards.
The private sector and the packaging industry can be a part of the solution helping raise standards and adopt new practices, in accordance with existing WTO rules and can take an active interest in helping to shape the rules through regular interaction with their governments which are active participants in WTO deliberations and, on occasion, dispute settlement.
Packaging: plastic, trade and the circular economy
For our Planet — and a better future — we need to think about new practices. It cannot be business as usual. It is not just governments that demand this, but consumers whose voices are increasingly heard.
When it comes to packaging, discussions inevitably turn to plastic waste. Plastic that has, in some ways, become the go-to material for industry. Plastic is versatile, durable and cheap; it is also, unfortunately, all too often slow to degrade which means plastic waste and pollution. The World Economic Forum(6), estimates that over 400 million tonnes of plastic is produced annually of which only about 14 to 18% is formally recycled.
There are, of course, alternatives available. In India, it is not uncommon to find packaging made of jute or natural fibres which can be both aesthetically pleasing and eco-friendly. Recycling is also common practice with, for instance, paper bags made from old newspapers.
In the WTO, members have begun raising the cross-border implications of plastics pollution in the WTO Committee on Trade and the Environment (CTE). Steps taken to address plastic pollution and facilitate the global plastics circular economy are being discussed. Some members are seeking support for a WTO plastics initiative at our next Ministerial (MC12), now scheduled for June 2021 in Kazakhstan.
Many countries have already introduced trade measures to address the scourge of plastic pollution. Between 2009 and 2018, WTO members notified 128 measures(7) affecting trade in plastics for environmental reasons, mostly under the TBT Agreement. These included technical requirements related to waste management, import licensing schemes to control trade flows, and bans on single-use plastic items or shopping bags(8). Eighty per cent of these measures were notified by developing or least-developed countries (LDCs).
Waste can generate new economic opportunities as well as challenges. There are a broad range of trade measures that could be directed to facilitate trade for circular economy: from reuse and repair, to remanufacturing, recycling and eco-design.
This will require a change in approach from multiple stakeholders, including policy makers and the private sector because trade and other economic activities have traditionally been conceived with a linear — rather than a circular — economy in mind.
The WTO's tools on transparency and policy dialogue may help this transition and improve our understanding of the overlap between trade policies and circular strategies. The CTE has been working to improve policy coherence and build mutual supportiveness. Transparency tools, such as the WTO Environmental Database (EDB), also help. To date, 470 trade measures have been recorded that relate to the circular economy. Initiatives, such as the Environmental Goods Agreement (EGA), could also contribute to the dissemination of technologies and alternatives.
To quote the late Steve Jobs, who as Apple CEO, knew a thing or two about packaging: “Packaging can be theater, it can create a story”. I do hope the packaging industry can play its role for a safer, better and cleaner planet. We all like a story with a pleasant ending.
- The theme/byline for this Packaging Virtual Summit is: “(…) Think Packaging: Think Product, People and Planet” (https://etunwired.et-edge.com/virtual/packaging/). back to text
- Annex 1.1 and 1.2 of the WTO Agreement on Technical Barriers to Trade (TBT). Terms and Definition of “Technical Regulation” and “Standard”: “(…) may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method”. back to text
- https://www.epingalert.org/ back to text
- G/TBT/N/IND/102, STC 613: raised only once in March 2020 and not subsequently at the May 2020 (written procedures) meeting. See http://tbtims.wto.org/. back to text
- G/TBT/1/Rev.9, Part I, Section III (pp. 10-12) and Annex B (pp. 37-39). back to text
- http://www3.weforum.org/docs/WEF_Plastics_the_Circular_Economy_and_Global_Trade_2020.pdf back to text
- WTO Environmental Database: www.wto.org/edb. back to text
- According to UNEP, 127 countries have adopted legislation to regulate and 61 countries have banned manufacture and/or imports of plastic bags. See https://www.unenvironment.org/resources/report/single-use-plastics-roadmap-sustainability . back to text