On Fairness and Freedom:
The WTO and Ethical Sourcing Initiatives

GEGI Working Paper Series

By Rachel Thrasher
May 2014

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Although the concepts of fair trade and free trade have little to do with one another, in the context of public procurement, the two come head to head. Proponents of free trade argue that governments should act like private market actors when purchasing; others hold that governments are obligated to promote justice and equality by way of procurement “linkages” to social policy like fair trade. An increased awareness of the importance of sustainability has re-opened the debate over whether governments should link their spending to social concerns. In Europe a sustainable approach to public procurement is commonplace and EU enthusiasm has reached the WTO. A Revised GPA seeks to encourage broader acceptance of the agreement by including exceptions for environmental and social policy linkages. The exceptions include a general exception in cases where derogation is “necessary to protect human, animal or plant life or health”, excludes public procurement in international development assistance from the scope of the agreement, and explicitly permits governments to apply technical specifications for environmental protection. A recent case against sustainable public procurement in the Netherlands demonstrates the space given countries in Europe to select and implement their own procurement practices. Countries vary widely in their government procurement. Although the EU maintains a region-wide consensus toward encouraging ethical sourcing and consumption, other regions have not created the same supportive structure. Within the WTO, it is even clearer that policies creating obstacles to liberalized trade would be less favorable than other policies, regardless of the reason for those obstacles. We conclude that while the Revised GPA has made more policy space for governments to prioritize development and environmental goals, it does not go far enough. Future revisions of the GPA should provide policy space for horizontal linkages, including those aimed at long-term sustainability.