In­ter­na­tional trade strength­ens sus­tain­able de­vel­op­ment

The for­mer UN Sec­re­tary Gen­eral Kofi Annan recog­nised the im­por­tance of in­ter­na­tional trade for sus­tain­able de­vel­op­ment: He was con­vinced that the cause of poverty and un­der­de­vel­op­ment was not too much trade, but too lit­tle. A com­pre­hen­sive analy­sis by economiesu­isse sup­ports this view. The lat­est dossier not only pre­sents the rel­e­vant re­search find­ings, but also high­lights the pos­i­tive con­tri­bu­tion of Swiss com­pa­nies to sus­tain­able de­vel­op­ment abroad.

Sus­tain­abil­ity is three-di­men­sional 

The UN sus­tain­abil­ity goals recog­nise global eco­nomic in­te­gra­tion as an im­por­tant motor for the en­vi­ron­men­tally, so­cially and eco­nom­i­cally sus­tain­able de­vel­op­ment of our planet. Thus, trade and in­vest­ment have led to enor­mous wel­fare gains world­wide. More than one bil­lion peo­ple have been lifted out of ex­treme poverty since 1990. At the same time, life ex­pectancy in the world's poor­est coun­tries in­creased by 13 years thanks to in­ter­na­tional trade and in­vest­ment.

Open mar­kets, trade and for­eign di­rect in­vest­ment not only strengthen the eco­nomic and so­cial di­men­sions of sus­tain­abil­ity, but also have pos­i­tive long-term ef­fects on en­vi­ron­men­tal sus­tain­abil­ity. Es­tab­lished new tech­nolo­gies and chang­ing con­sumer be­hav­iour lead to more re­source-ef­fi­cient pro­duc­tion and stronger de­mand for en­vi­ron­men­tally sus­tain­able prod­ucts.

Swiss trade and in­vest­ments strengthen sus­tain­abil­ity

Swiss com­pa­nies con­tribute sig­nif­i­cantly to sus­tain­able de­vel­op­ment in the world and to achiev­ing the UN sus­tain­abil­ity goals. Their prod­ucts and ser­vices are in­no­v­a­tive and of high qual­ity. Not only do they ex­port their prod­ucts but also their com­par­a­tively high sus­tain­abil­ity stan­dards. This is achieved in par­tic­u­lar through Swiss di­rect in­vest­ments abroad.

There­fore, open ac­cess to world mar­kets is key not only for Swiss com­pa­nies but also for sus­tain­able de­vel­op­ment. How­ever, the chances of suc­cess for sus­tain­able de­vel­op­ment de­pend to a large ex­tent on the struc­ture of the eco­nomic and po­lit­i­cal in­sti­tu­tions in the re­spec­tive coun­try. Ap­pro­pri­ate in­sti­tu­tional re­forms must come from within, in other words they must be sought and de­manded po­lit­i­cally by the peo­ple and de­ci­sion-mak­ers in the re­spec­tive coun­try.

Co­her­ent pol­icy in­stru­ments

Trade and free trade agree­ments alone do not cre­ate a bal­ance in the sus­tain­abil­ity tri­an­gle. How­ever, trade gains can and should be used to strengthen the three di­men­sions of sus­tain­abil­ity (eco­nomic, en­vi­ron­men­tal and so­cial) and bring them more closely into line. Pro­mot­ing sus­tain­abil­ity there­fore re­quires holis­tic so­lu­tions and a strong in­volve­ment of busi­ness as a key actor to­wards more sus­tain­abil­ity.

Re­spon­si­ble Busi­ness Ini­tia­tive (RBI) would have com­pro­mised sus­tain­able de­vel­op­ment

In No­vem­ber 2020, Switzer­land re­jected the RBI in a pop­u­lar vote. If ap­proved, the RBI would have man­dated the gov­ern­ment to pro­pose a bill with the pos­si­bil­ity to sue multi­na­tional com­pa­nies at their place of busi­ness for vi­o­la­tion of en­vi­ron­men­tal reg­u­la­tions and human rights abroad. The li­a­bil­ity pro­vi­sions fore­seen by the RBI would have forced Swiss com­pa­nies with high human and en­vi­ron­men­tal risks to re­view their for­eign in­vest­ments in de­vel­op­ing coun­tries or even sub­stan­tially re­duce their busi­ness ac­tiv­i­ties there, thus com­pro­mis­ing the suc­cess­ful model of Swiss de­vel­op­ment co­op­er­a­tion.
In­stead, the Swiss Par­lia­ment adopted changes to the com­pany law which are far going, how­ever in­ter­na­tion­ally aligned and com­bine the world's most ad­vanced cor­po­rate re­spon­si­bil­ity in­stru­ments. While avoid­ing a reg­u­la­tory stand-alone ap­proach, the new reg­u­la­tory frame­work puts Switzer­land in the class of the most pro­gres­sive coun­tries re­gard­ing CSR reg­u­la­tion world­wide. 

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