Global Convergence Through European Union Value Chain Regulation and Voluntary Standards
22 Pages Posted: 7 Dec 2019 Last revised: 13 Dec 2019
Date Written: December 6, 2019
Private standards and corporations’ internal regulatory processes are increasingly used by rule-makers in the EU and its Member States in the transnational discipline of global value chains. The effects of this use could lead to convergence of global production practices with international law through the use of external norms. By harnessing the regulatory capacity of voluntary standards, the EU is capable of fostering compliance with international environmental and social obligation - including by businesses and producers established in extraterritorial jurisdictions. Convergence with international provisions, however, may in fact be too shallow. The presence of an additional layers of private regulators, combined with the interplay of private rules with those applicable in the countries of operation, may limit convergence of business conduct with international provisions. To ensure effective convergence, appropriate legal structures are likely to be necessary. Furthermore, convergence with social and environmental domains takes place in the simultaneous divergence with the spirit of international trade obligations. Through a use of private authority which mostly escapes review under WTO provisions, the EU and its Member States are capable of indirectly regulating the conduct of foreign business entities in a manner which would be otherwise be constrained, and possibly even sanctioned, by WTO rules.
Keywords: Transnational private regulation; Voluntary sustainability standards; Human rights due diligence; EU global value chains regulation; EU law; EU regulation; WTO law
JEL Classification: K0, K20, K32
Suggested Citation: Suggested Citation