FUND FOR RESEARCH INTO INDUSTRIAL DEVELOPMENT, GROWTH & EQUITY

Global Review of Eco-Labels: Implications for South Africa

PHASE ONE REPORT

7. The Way Forward - Aims and Objectives of Phase II of the Study

The main objective of the second phase of this study is to provide clear strategic directions for consideration by DTI regarding the trade implications of eco-labelling initiatives world wide for South Africa. The second report will be developed on the basis of the initial work that has been undertaken in developing Report I (this report), as well as on the outcome of discussions with the FRIDGE Counterpart Group.

The second phase of the study is based on the assumption that the overriding objective of any eco-labelling initiative in South Africa is to facilitate access to foreign markets. On this basis, and building on the findings of Report I, the principal focus of Report II is on identifying the implications of facilitating certification in terms of foreign schemes (focussing on the EU), rather than on developing a uniquely South African labelling initiative. With regard to using product labels as a means of stimulating improved environmental performance in the domestic market, the study will briefly examine the potential and implications of further developing the environmental component within the Proudly South African campaign.

In achieving the above objectives, it has been agreed that that Phase Two of the study will:

• Provide a general review of the key issues relating to international trade and environmental labelling. This review will include a general assessment of recent developments in the international trade regime, a brief overview of the trade and environment debate, and an overview of the key issues relating to trade and eco-labelling
• Describe the make-up of South Africa's trade by beneficiation over the past five years, noting how South Africa has moved away from exporting mainly raw products to exporting mainly manufactured & semi-manufactured products, and identifying the general implications of this development in terms of eco-labelling.
• Identify the manufacturing sectors and products where eco-labelling would be of greatest potential value in South Africa in terms of increasing market competitiveness. As the EU constitutes South Africa's principal trading partner, as well as being the trade partner where eco-labelling has the greatest level of adoption, this study will focus exclusively on the implications of the EU Flower, noting the existing and currently anticipated product sectors covered by the Flower. The study will analyse trade flows between South Africa and its five most important EU trade partners by HS Section. In a separate appendix, the trade categories will be assessed down to HS 2-digit level for the top five countries. The outcome of the FRIDGE study on non-tariff barriers will serve as a significant point of reference into this part of the study.
• Assess the implications of creating an enabling environment to access foreign eco-labels. This would include an analysis of the relevant labelling criteria for the EU Flower, and an assessment of the implications that this may have for local producers / manufacturers, focussing in particular on the data that companies may need to collect to ensure compliance.
• Provide a brief review of product-based policy options aimed at reducing the environmental impact of production and consumption patterns. This will not be a detailed analysis, but rather an overview of available policy options. It will include in particular an assessment of the potential and implications of further developing the environmental component within the Proudly South African campaign.
• Identify areas for future research.