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UNCTAD: Multinational Corporations Are Monopolising Green Markets

The United Nations Conference on Trade and Development (UNCTAD) says multinational corporations are monopolising the green markets of the world.

UNCTAD Deputy Secretary-General,Isabelle Durant, said at a meeting on green markets at the World Trade Organisation (WTO) in Geneva, Switzerland early this July: ‘’Today’s green markets are monopolised by large-scale farms and multinational corporations.’’

Markets for sustainably produced goods- green markets- are booming as more consumers across the globe reach for products that pay producers a fair price or are made in an environmentally friendly manner.

In the United States, for example, sales of such products grew by 3.5% between 2014 and 2018, compared to one percent for products without a sustainability label, according to the data and measurement firm Nielsen.

Such shifts in consumer preferences offer opportunities for biodiversity-rich developing countries to boost their economies while protecting the environment and reducing inequalities. But the price of certification is often out of reach for small producers.

In Vanuatu, for instance, annual audit costs for organic certification can range between $2,000 and $10,000, a steep fee in a country where the monthly minimum wage is only $290.

UNCTAD organised the meeting with the Fair Trade Advocacy Office, the government of Ecuador and the European Commission as part of the 2019 review of the WTO Aid for Trade initiative.

‘’Producers are often asked by their buyers to adhere to sustainability standards but the certification costs can be too high for smaller producers and micro, small and medium-sized enterprises’’, Durant said.

Speakers called on governments and donor agencies to give more attention to aid for trade projects to help small producers meet voluntary sustainability standards and access green markets.

A project implemented by UNCTAD’s BioTrade programme and the Swiss State Secretariat for Economic Affairs is one such initiative.

The two organisations worked together in 2006 to help the non-profit organisation PhytoTrade Africa comply with the European Union’s novel food legislation, which enabled it to sell baobab fruit powder in EU markets. The process took two years and cost more than $250,000.

Such costs and time associated with market compliance are onerous to many producers in developing countries.

‘’Meeting organic, fair trade and other sustainability standards for them is a stumbling block rather than a tool to enter the green market’’, said Eric Beantanana, a delegate from Madagascar, of producers in his country.

Bertrand Jolas of the European Commission said they are addressing the issue through a range of policy instruments, including preferential market access, to reduce the costs for small producers.

Executive Director of the Brussels-based Fair Trade Advocacy Office, Sergi Corbalán, said such instruments are needed to ensure green markets are also ‘’fair’’ markets, adding, ‘’green markets should be about value chains that are more equitable, where small producers and workers can bargain and receive better and fairer terms of trade.’’

Donors and government representatives such as Diego Aulestia, Ecuador’s Ambassador to the WTO and other economic organisations in Geneva, called on UNCTAD to continue helping small producers and businesses in developing countries to access green markets.

UNCTAD does so through programmes such as the BioTrade programme, as well as National Green Export Reviews and the Fostering Green Exports through Voluntary Sustainability Standards project.

This work is however, funded by the Swiss State Secretariat for Economic Affairs, the United Nations Development Account, the European Union, and the Islamic Development Bank.

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