WORLD TRADE  
ORGANIZATION  G/SPS/GEN/967 
20 October 2009 
 
 (09-5168) 
Committee on Sanitary a nd Phytosanitary Measures Original:   English 
  
 
VOLUNTARY STANDARDS 
 
Submission by Switzerland
 
  
 The following communication, received on 16 Octo ber 2009, is being circulated at the request 
of the delegation of Switzerland
. 
 
_______________ 
  
1. The purpose of this submission is to outline th e Swiss Government’s strategy for ensuring 
that private voluntary standards contribute positivel y to sustainable development and for ensuring that 
they do not operate as unnecessary barriers to trade. 
1. Context 
2. Members of the SPS Committee have repeatedly  expressed concerns over the growth of 
private voluntary standards, particularly as they relate to SPS matters.  In  its June 2007 regular 
meeting, the SPS Committee agreed to undertake consultations with Members on how to best address 
the issue of private voluntary standards.  In its October 2008 meeting, Committee members agreed to 
undertake a research process as outlin ed in document G/SPS/W/230, with the objective of better 
understanding the impacts of private voluntary sta ndards and their relationship with national and 
international standards.  
3. In accordance with the SPS Committee's deci sion to undertake a comparative study on the 
effects of private SPS standards, the SPS Secretar iat circulated a report summarizing the responses of 
22 Members to a questionnaire on SPS-related pr ivate standards in June 2009 (G/SPS/GEN/932 ).  The 
Swiss Government believes that private voluntary sta ndards are currently playing, and will continue 
to play, a key role in determining the nature and te rms of international trade, and therefore, that the 
appropriate design and application of such meas ures is critical to determining the long-term 
sustainability of global trade.  Recognizing this , the Swiss Government has adopted a proactive 
approach toward private voluntary standards in orde r to ensure that they fulfil their potential as 
positive stimulus to sustainable development.  
2. Background 
4. Over the past two decades, growth in internationa l trade, catalyzed in la rge part by the work 
and success of the WTO, has given rise to a growing need for common systems for managing performance across a range of businesses and economic ac tors.  These needs have resulted in the rapid 
growth in the number and size of private voluntary standards designed to manage product-related and 
non product-related processing and production methods and whic h include standards on quality 
management, health and safety management, as well as social and environmental management related 
to product, processing and production characteristics. G/SPS/GEN/967 
Page 2  
 
  5. In addition to the diversity of objectives captured by private voluntary standards, there is also 
a growing diversity of models by which such st andards are developed and implemented.  Private 
voluntary standards can range from individual firm developed standards
1 to business coalition 
standards,2 to global multi-stakeholder standards systems.3  The impact and scope of any private 
voluntary standard, as well as the stakeholders involve d, varies with the objectives and structure of the 
standard system.  Given this variety, it is exceedingl y difficult to generalize with respect to the market 
trends or impacts of such systems. 
6. Nevertheless, it is worth noting that the bac kbone of private voluntary standards consists 
primarily of tools for improving communication and coordination along supply chains.  To the extent 
that they are able to do so successfully, privat e voluntary standards have the potential to improve 
market efficiency and thus global social welfare.  In principle, therefore, the growth of private 
voluntary standards has the potential to not only be in accordance  with the objectives of the WTO, 
but to proactively promote those objectives, particul arly, those of "raising living standards, ensuring 
full employment ... while allowing for optimal use of the world’s resources in accordance with the 
objective of sustainable development".  Moreover,  the Swiss Government believes that private 
voluntary standards hold particular potential as in struments for stimulating sustainable economic 
development across emerging a nd least developed economies. 
3. Legal Status of Private Voluntary Standards under the WTO 
7. Over the course of the discussions many developing country Members have observed that 
private voluntary standards might be used as inst ruments for protectionist purposes, raising questions 
whether such systems should be covered by more r obust rules under the WTO.  At the outset we wish 
to remind Members that private voluntary standard s, where developed and implemented independent 
of government intervention, are a reflection of market  forces and therefore do not fall directly within 
the scope of current WTO rules 
8. Of course, government’s often do legitimately support or promot e the development of private 
voluntary standards.  The Swiss Government believes that such support should be limited to cases that 
forward the objectives of economic efficiency and sustainable development and which are in 
accordance with the principles of  non-discrimination and "special and differential treatment" as per 
WTO obligations.  We would like to emphasize, howe ver, that the WTO’s authority with respect to 
private voluntary standards only extends to the actions of WTO Member Governments with respect to such standards - not the actions of the private voluntary standards themselves.  WTO law does not, 
and indeed should not, apply to the actions of priv ate voluntary standards that operate independently 
and without government support or intervention. 
4. Standards as a Stimulus for Sustainable Development 
9. There are now literally thousands of private voluntary standards on the market.  The number 
and market share of these standards has been growi ng at a rapid rate over the past decade.  Depending 
on the standard and the market, annual market gr owth commonly ranges between 20 per cent and 100 
per cent.   Some examples of this growth across different segments include:  
• GLOBALGAP has grown from 18,000 certificate holders in 2004 to more than 90,000 
certificate holders in 2009
4; 
                                                      
1 For example, Starbuck’s Café Practices. 
2 For example, GLOBALGAP. 
3 For example, ISO 22000. 
4 GLOBALGAP.  GLOBALGAP "Facts and Figures",  2009.  G/SPS/GEN/967 
 Page 3 
 
 
  • Organic certification has grown from $11 billion in  1997 to more than $46 billion in 2007 
currently accounting for approximately .008 per cent of global agricultural production 
with forecasted consumption growth of between 15 per cent and 20 per cent across developed country markets
5;  and 
• Starbuck’s Café Practices has been expanding at a rate of more than 25 per cent per 
annum over the past five years and now accounts for more than 75 per cent of total coffee 
purchases.6 
10. These figures provide a small glimpse into the size of the market opportunity associated with 
private voluntary standards.  Standards-based markets, as newly developing  markets, represent a 
unique opportunity for less developed economies to expand their share of global markets and global 
profits.  But the potential of private voluntary standards as instruments for catalyzing growth, prosperity and sustainable development acro ss developing economies extends far beyond the 
opportunities presented by market growth alone.  
Productivity, Efficiency and Competitiveness 
11. The implementation of private voluntary sta ndards usually requires the adoption of new 
supply chain and firm management  practices.  By bringing different actors together through 
standardized, more predictable relationships, pr ivate standards can reduce transaction costs and 
increase competitiveness at the national and sector levels.
7  By requiring users to adopt better 
management practices at the firm level, private volun tary standards can lead to increases in firm level 
productivity, quality and overall profitability.8 
Strategic Planning, Stability and Risk Management 
12. Private voluntary standards revolve around im proved communication of information related 
to product quality, production and processing met hods.  Within the context of private voluntary 
standards, supply chain relationships are therefore often characterized by better, and more frequent, 
information exchange.  Improved information can pr ovide a better understanding of the operation of 
local and global markets, thereby facilitating the ability of producers and manufacturers to foresee, 
adapt and profit from changing conditions within markets. 
13. Management systems associated with private vol untary standards often have positive spinoff 
effects on reducing risk related to improved and more transparent supply chain management.  By 
improving management capacity at the firm level,  private voluntary standards can lead to better 
planning around risk and lead to enhanced stab ility - a key challenge for developing country 
                                                      
5 IFOAM. IFOAM Statistical Yearbook , 2009. 
6 Data from Starbucks, September, 2009. 
7 A recent study of 10 sub-Saharan countries reveals significant gains in national export levels and 
overall profitability of fresh produce following GLOBALGA P certification.  See Henson, Spencer etc al. "Do 
Fresh Produce Exporters in Sub-Saharan Africa Bene fit from GLOBALGAP Certification?" IFERG Working 
Paper No. 2  FT University of Guelph, 2009. 
8 A 2005 study by IFAD observed productivity increases ranging from 10 per cent to 75 per cent over 
traditional agricultural methods for Indian and Chines e farmers having recently transitioned to organic 
agriculture.  The gains were largely a result of improved management practices associated with the organic standard system.  See Giovannucci, Da niele.  "Organic Agriculture and Poverty Reduction in Asia: China and 
India Focus" IFAD Office of Evaluation: Rome, 2005.  Quality improvements, and increased margins are also 
commonly associated with the adoption of private standards.  Grape producers in India, have experienced higher 
margins and profitability associated w ith GLOBALGAP certificati on.  See Meeta, Punjabi "Grape Exports with 
GLOBALGAP Certification:  Case Study of Mahind ra and Mahindra Initiative in India" FAO, 2008. G/SPS/GEN/967 
Page 4  
 
  economies dependent on volatile intern ational markets.  Risk can also  be reduced through closer and 
better-synchronized relationships  with supply chain partners.
9 
14. Compliance with established standards provid es assurances that products meet minimum 
quality requirements, which, in turn, can lead  to longer-term supply arrangements and other 
preferential relationships that can protect against market volatility.  Where standards succeed in 
reducing firm level risk, they pr ovide a stepping-stone to increased confidence and innovation in the 
marketplace.10 
Social and Environmental Sustainability 
15. A growing number of private voluntary standards include criteria related to the protection of 
social and environmental sustainability.  Where voluntary standards include independent monitoring 
and enforcement mechanisms, they can offer a r obust support system for local law enforcement and 
meeting local social and environmental objectives.  As market driven processes, private voluntary 
sustainability standards have the capacity to stimulate commercial i nvestment to support local social 
and environmental objectives.  As producers move to  comply with sustainability-oriented standards, 
workers and local communities, not to mention th e global community, all have the potential to 
experience improved wellbeing.   
5. Challenges Facing Developing Country Producers 
16. Based on the above, we believe that there are very real and growing opportunities for 
developing country producers to take advantage of the growth of private voluntary standards 
initiatives by proactively engaging and investing in such processes.  Government’s that have actively 
engaged in dialogue with businesses around standard s development and implementation, and invested 
in standards compliance infrastructure, have s hown the most progress in extracting the potential 
benefits from private voluntary standards.11  However, we are also cognizant of the fact that the 
potential benefits of private voluntary standards are no t always realized and that the growth of private 
voluntary standards also poses a considerable number of very real challenges to developing country 
producers.  Among these, we count as of first order priority the following. 
                                                      
9 See Potts, Jason "Alternative Trade Initiatives and Income Predictability:  Theory and Evidence from 
the Coffee Sector" IISD: 2007 for a lis ting of specific ways in which management practices associated with 
private voluntary standards have been observed to redu ce risk for coffee producers.   See also, Meeta, supra 
note 8 for a listing of ways in which GLOBALGAP certified grape farmers have experienced reduced risk in 
India. 
10 Compliance with international standards is a sour ce of pride for many firms.  See, for example, 
Lawrence Busch et al "The Relationship of Third Party Certification to Sanitary and Phytosanitary Measures 
and the International Agrifood Trade" (Raise SPS Global Analy tical Report #9) USAID: 2008. 
11 The development of national standards compatible with private voluntary standards, and a 
corresponding national support infrastructure to assist in standard compliance has been a key factor to the 
success of countries like Kenya (horticulture) and Peru (a sparagus) in enhancing agricultural profitability at the 
national level.  See Jaffee, Steve; Spencer Henson, "Standards and Agrifood Exports from Developing 
Countries: Rebalancing the Debate" Volume 3348 of Po licy Research Working Papers, World Bank, 2004.  See 
also O’brien, Tim and Alejandra Diaz Rodriguez, "Improving Competitivene ss and Market Access for 
Agricultural Exports through the Development and Appli cation of Food Safety and Quality Standards: The 
Example of Peruvian Asparagus", InterAmerican Institute for Cooperation in Agriculture, 2004.  G/SPS/GEN/967 
 Page 5 
 
 
  Compliance Costs 
17. Producers wishing to enter standards-based ma rkets have to pay costs associated with 
attaining compliance, verification and othe r fees related to system management.12  As the number of 
distinct standards grows, producers are faced with gr owing costs in order to maintain market access.  
Per unit compliance costs are higher for smaller producers and therefore represent a particularly 
serious barrier to market access for them.13  In order to ensure that compliance costs are compensated 
by market gains, and that smaller producers are not unfairly disadvantaged, governments, standards 
setters and implementers need to: 
• Promote harmonization across individual standards systems including the establishment of 
mutual recognition and equivalence schemes and shared auditing procedures; 
• Facilitate the organization of SM Es and smaller producers into trading groups and producer 
organizations to enable economies of scale asso ciated with standards-related requirements; 
• Simplify and adapt requirements associated with standards systems to the national context in 
the form of national standards and related systems;  and 
• Provide financial support for smaller producers to make necessary investments for 
compliance with private voluntary standards of key strategic importance. 
Governance 
18. Private voluntary standards set rules for production and trade.  Although private voluntary 
standards can provide new avenues for developing co untry participation in supply chain management, 
Northern stakeholders dominate mo st standards systems currently in  operation.  Although this reflects 
the fact that consumers are often driving the pro cess towards standardization,  there is a risk that 
developing country interests are not sufficiently ta ken into account in the st andard development and 
implementation process.  There is, therefore, a need for:  
• Standard-setting bodies to ensure robust and credible participation of developing country 
stakeholders within standards developmen t processes by sponsoring participation of 
developing country stakeholders in key m eetings and managing an open, web-based 
consultation process in releva nt stakeholder languages. 
• Standard-setting bodies to work with nationa l enquiry points to facilitate maximum 
participation in standards development pro cesses by responding to information requests on 
private voluntary standards being developed nati onally and internationally,  and by collecting 
national perspectives for input into releva nt private voluntary standards processes.14 
                                                      
12 Initial compliance costs with private voluntary st andards represents one of the most important 
barriers to integration for developing country producers within standards-based markets.  See Henson supra  
note 7 and Giovannucci supra  note 8.   
13 See Disdier, Anne Celia; Belay Fekadu; Carlos Murillo; Sara Wong, "Trade Effects of SPS and TBT 
Measures on Tropical and Diversification Products", ICTSD: 2009 for results from surveys in Ecuador, Costa 
Rica, Ethiopia and Kenya where smaller producers were consistently observed to have higher SPS and TBT compliance costs across a vari ety of agricultural sectors ;  See also Potts, Jason; Michael Opitz and Chris 
Wunderlich ,"Closing the Gaps in GAPS:  A Preliminary Appraisal of the Measures and Costs Associated with 
Adopting Commonly Recognized "Good Agricultural Practices" in Three Coffee Growing Regions", USAID, 2007 where the costs of conforming with private voluntar y standards were found to be as much as 35 times 
higher for small coffee producers. 
14 Through prior arrangement with private volunt ary standard setting initiatives, National enquiry 
points could serve as entry points for ensuring "national" representation in private voluntary standards 
processes. G/SPS/GEN/967 
Page 6  
 
  • Governments and donor agencies to facilitate a nd support developing coun try participation in 
standards development processes by sponsoring tr avel, research and coordination related to 
the integration of develo ping country interests in standard setting processes. 
Information 
19. Despite the fact that standards usually open new information channels, they often fail to 
provide, or document, informati on related to the impacts they themselves have on producers, 
communities or markets.  Information on the impacts of standards is a key starting point for monitoring and managing the sustainability of such  systems for developing country stakeholders.  
There is, therefore, a need for:  
• Standard-setting bodies to comply with the TBT Code of Good Practice; 
• Governments and donor agencies to support pro cesses that facilitate compliance with the TBT 
Code of Good Practice among private standard-setting bodies; 
• Governments and donor agencies to support pr ocesses that objectively assess the impacts of 
private voluntary standards on markets, trade flows and community and firm level conditions; 
• Standard-setting bodies to gather and report more robust information related to social, 
economic and environmental impacts:  and 
• A global database on private voluntary standards bringing together descriptive and analytic 
data on requirements, procedures, trade and field level impacts 
Capacity  
20. Compliance with private voluntary standards re quires a certain degree of organizational and 
management capacity.  Developing country businesses and producers, particularly the smaller ones, 
are often disadvantaged when compared with others  from the developed world.  Where this is the 
case, requirements for compliance with standards can provide more developed stakeholders with an 
unfair advantage.  In order to avoid this,  
• Governments, donors and standard-setting bodi es need to build management capacity for 
compliance with standards and better business ma nagement practices at the national and firm 
levels; 
• Standard-setting bodies need to proactively fac ilitate access to technical assistance for smaller 
clients located in the developing world
15;  and 
• UN agencies should consolidate learning and e xperiences with respect to private voluntary 
standards across developing countries through th e establishment of a "UN Forum" on private 
voluntary standards. 
Finance 
21. Access to finance is a key ingredient to business and economic development.  Without 
adequate finance, producers are often unable to secure necessary inputs for production, trade finance 
and risk management.  By requiring producers to  make additional investments for standards 
compliance, this situation can be aggravated by  private voluntary standards thereby increasing the 
                                                      
15 Capacity building is the cornerstone of any su ccessful implementation of standards and therefore 
needs to be central to the standards development and management process.  Standard-setting bodies may not be able to bear the burden of providing capacity to all worthy recipients, and, in  such cases should look for ways to 
build capacity through established networks and institutions.    G/SPS/GEN/967 
 Page 7 
 
 
  financing gap often facing devel oping country producers already.  Although compliance with private 
voluntary standards often results in reduced risk  and greater productivity, these assets are still under-
recognized by many financial service providers.  The public and private financial sectors and donors 
need to:  
• Develop dedicated windows of financing aimed at  assisting producers in meeting compliance 
requirements; 
• Document the impacts of standards compliance on producer risk so that the benefits of 
working within standardized systems can be integrated within lending procedures;  and 
• Facilitate access to risk-mitigation instruments,  such as guarantees, for standards-compliant 
businesses as a basis for improving access to finance. 
6. Actions Undertaken by the Swiss Government in Support of the Sustainable Use of 
Private Voluntary Standards 
22. Although the Swiss Government fundamentally believes that private voluntary standards hold 
significant benefits for developing countries, we also  understand that this outco me cannot be taken for 
granted.  In order to ensure that private vol untary standards contribute positively to sustainable 
development and lead to meaningful improvements in the wellbeing of developing country partners, 
public and private actors must proactively invest in  processes to ensure that  the special needs of 
developing countries are met in the devel opment and implementation of standards. 
23. Private Voluntary Standards, per se, are market  instruments and therefore are not subject to 
the WTO rules.  However, government intervention and involvement will be necessary to ensure that 
such standards do not lead to unsustainable outcome s.  Public policy intervention in standards-based 
fields could render them subject to WTO rules (under the TBT Agreement or under the GATT).  As such, governments should take great care to ensure that the basic principles of origin neutrality and 
non-discrimination are maintained through the interven tions and support they provide.  In addition to 
ensuring that the basic principle of non-discrimin ation is respected, governments need to take 
proactive steps to ensure that developing countries can take advantage of the benefits promised by 
private voluntary standards - capacity building and fi nancing efforts need to be designed to directly 
address the specific challenges faced by the transiti on of mainstream markets to standards-based 
production and trade. 
24. In 2000, the Swiss Federal Council elaborated a strategy for sustainable development which 
comprises in its sixth measure the recognition and promotion of private voluntary standards and/or 
labels.  The strategy’s principle is that the Confed eration does take a subsidiary role as regards the 
promotion of private voluntary standards which are considered a private sector issue.  However, the 
Confederation can contribute to improve the fra mework conditions and remove dysfunctions.  
Moreover, it can support initiatives of the private se ctor with specific instruments (information and 
awareness raising, consulting, harmonization of stan dards, mutual recognition of governmental labels, 
certification, public procurement, financial suppor t of voluntary labels, improvement of framework 
conditions etc.).  Below is a short listing of some of the initiatives th e Swiss Government has 
undertaken to address these issues.  
(a) Supporting the establishment of organizations and initiatives promoting fair trade in 
the Swiss market and in the world markets in  general, with the aim of contributing to 
a better awareness of fair-trade products a nd stimulating the demand.  Examples are 
the support of fair trade carpets (STEP La bel), the national Max Havelaar Label and 
the strengthening of the Fair Trade La belling Organisation (FLO) as a global 
umbrella organization for fair trade. G/SPS/GEN/967 
Page 8  
 
  (b) Support to partner countries (e.g. India, Romania, Ukraine, and Bulgaria) in 
establishing national certification bodies fo r organic products so as to overcome 
market access difficulties – high certification fees and diverging certification requirements.  Efforts are also being made  at the international level to promote 
harmonization and equivalence of organic standards and certification procedures. 
(c) Co-financing of neutral platforms for multi-stakeholder processes involving 
producers, the private sector and NGOs for the elaboration of sustainability criteria for the mainstream market of selected co mmodities and biofuels (Common Code for 
the Coffee Community, Better Cotton In itiative, Sustainable Cocoa Economy, 
Tropical Timber, Responsible Soy, Alla nblackia, Sustainable Biofuel Initiative). 
(d) Promoting the efficiency of voluntary sustainability standards, their impact 
measurement as well as the harmonization of capacity building measures.  Examples are the COSA Program (the Committee on Su stainability Assessment) which aims to 
develop a rigorous assessment tool and to tr ain producers and other stakeholders to 
measure and understand the cost s and benefits of undertaking different sustainability 
initiatives.  Furthermore, SECO has been supporting the project "Harmonisation and 
Scaling Up of Voluntary Standards Systems" implemented by ISEAL and AccountAbility which addresses three vital and interconnected success factors – 
improving the strategic performance of sta ndard-setting bodies and scaling up the use 
of voluntary standards through their harm onization, and a holistic and integrated 
approach to developing country technical assistance. 
__________