Trade and Environment Programme Newsletter-May 2016

Trade and Environment Programme

© Zhang Ke

Trade and Environment Programme News - May 2016

This quarterly newsletter gives an update of the International Trade Centre’s (ITC) Trade and

Environment Programme’s (TEP) activities in capacity building and market analysis.

In 2015, sustainability was high on the development agenda. This is likely to intensify as the

Paris Agreement set a framework for countries to mitigate emissions and adapt to climate

change. Climate change is having a negative impact on productivity and trade from developing

countries. The climate risks that farmers in developing countries face continue to grow.

Extreme weather events now clearly have an impact on Aid for Trade projects, including those

implemented by ITC. In response, the Trade and Environment Programme has designed and

rolled out training for ITC staff on mainstreaming sustainability issues into programming. This

training builds on the findings of a survey published in 2015 of exporters’ perceptions of climate

change and their technical assistance requirements. The in-house training, to be published

externally in the first half of 2016, will help ensure that climate change and other environmental

risks like pollution are minimized whilst project clients benefit from export opportunities to the

green economy.

Biodiversity loss is also a priority of the development agenda. Trade has a role to play in

supporting the sustainable use of flora and fauna. ITC is working with CITES Parties on various

initiatives. This newsletter highlights our work in Viet Nam, in particular to strengthen

sustainability in the python skin supply chain and to analyse the economics of demand for

animal products used in traditional Asian medicine. This work will assist CITES Parties in their

decision-making about CITES listings in the run-up to the Conference of Parties in

Johannesburg in September.

In Peru, the TEP continues to support cocoa exporters with capacity building on key market

requirements like voluntary standards, packaging and branding, and quality management as

well as linking to European markets. This has resulted in new contracts for companies and

cooperatives. In Madagascar, training workshops for women’s associations producing raffia in

the buffer zones of Makira Park – organized by the TEP and the Wildlife Conservation Society

(WCS) – are helping to build climate resilience, improve sustainability practices and raise

incomes in communities reliant on raffia for their livelihoods.

ITC was able to implement these projects thanks to funding from the Governments of Denmark,

Germany and Norway during 2015 and to its cooperation partners for our ongoing collaboration.

Partnerships are key to ITC’s strategy for delivering both impact and sustainability in support of

the Global Goals.

For the remainder of 2016 and into our 2017-20 programming period, we look to build on these

partnerships to ensure the delivery of ITC’s mission of ‘trade impact for good’.

Alexander Kasterine

Head, ITC Trade and Environment Programme

Connecting Peruvian cocoa and chocolate

producers to international markets

ITC support to Peruvian SMEs producing fine cocoa and derivatives translates into real trade opportunities.

International trade in fine or flavour cocoa and

chocolate enhances growth opportunities for

Peruvian SMEs. The International Trade Centre

(ITC), together with Promperú (Peru Export and

Tourism Promotion agency), supported the

Peruvian exhibition stand at the Salon du

Chocolat Paris, in October 2015, presenting

products of 12 Peruvian SMEs manufacturing

fine or flavour cocoa as well as bean to bar

chocolate.

The Salon du Chocolat welcomed 100,000

visitors together with international cocoa buyers

and chocolate distributors. The participation of

Peruvian SMEs in the event opened business

opportunities for the industry of native

biodiversity-based products and derivatives.

Through business meetings organized by ITC,

the Peruvian suppliers have established export

links with international buyers. The sector of

SMEs producing fine native cocoa and bean to

bar chocolate sold US$ 1,080,000 during the

Salon du Chocolat while exports resulting from

the show are expected to amount to more than

US$ 9 million in the next 12 months according to

Ministry of Foreign Trade and Tourism of Peru.

Connecting SMEs producing biodiversity-based

products with international value chains is one of

the pillars of ITC’s work in Peru. In the country,

ITC implements training activities and provides

market intelligence services that enable domestic

producers to meet international requirements and

access foreign markets. "The Salon du Chocolat

serves as a platform for communication between

SMEs and potential buyers." said Gisella

Chumpén, the representative of PromPerú at the

Salon du Chocolat Paris.

Strengthening the value chain of fine

cocoa

"Peru continues to prove to be among the best in

the world at producing fine or flavour cocoa.” For

instance, this year Peru was one of countries to

receive an award in the International Cocoa

Awards competition for a cocoa variety from the

region of Tumbes. “By making use of its genetic

diversity the country adds value to finished

products such as bean to bar chocolate." said

Carmen Rosa Chavez, the representative of the

Ministry of Agriculture and Irrigation of Peru

(Minagri) at the Salon du Chocolat Paris.

Peru is recognized by the International Cocoa

Organization as one of the few countries in the

world, producing fine or flavour cocoa. Peru has

a great variety of native cocoa trees that grow in

different regions such as the coastal area of

Tumbes and Piura; the Amazon region of San

Martin, Amazonas and Ucayali and other areas of

rainforest in Cajamarca, Huanuco, Junin,

Ayacucho and Cusco. Smallholder agriculture

accounts for most of the production of native

Peruvian cocoa and is the main source of income

for the rural population. "Behind every cocoa

tree there are people, history, and culture"

said Carmen Rosa Chavez.

In addition to the positive commercial outcomes

resulting from the participation of SMEs in the

trade fair, SMEs gained more visibility of their

brands and products within the international

market. "Here you realize the wide range of

opportunities that exist for the chocolate sector.

Many people attend this fair because it brings

together key chocolate industry actors." said Lizi

Montoya, chocolatier and owner of Shattell

Chocolate.

"The fair has also helped us to form a large

network. All the main chocolatiers from all over

the world come here. Having that network of

contacts helps us grow as a company as it

improves our visibility." said Francesca Valvidia,

chocolatier and owner of Q'uma Chocolate.

SMEs producing bean to bar chocolate are not

the only ones to benefit from the participation in

the trade fair. Agricultural cooperatives producing

fine or flavour cocoa established new market

linkages and promoted the Peruvian cocoa as a

biodiversity-based product in the international

market.

"The importance of participating in this fair is that

it opens up new opportunities to find customers

and introduce our products to international

markets. Thus it also enables us to improve the

life quality of smallholder farmers who belong to

our association." said Carlos Julio Noriega

García, the representative of the Regional

Association of Cocoa Producers Tumbes.

"We obtain first-hand information about the global

cocoa market situation and trends, and what we

can do to meet the international market

requirements. The other goal, slightly more

technical, is to be aware of research novelties in

cocoa industry such as in production, processing

of cocoa, fermentation etc." said José Rojas

Hernández, the representative of the Norandino

cooperative (Cooperativa Agraria Norandino).

Promotion and training of SMEs

for the international market

To promote fine or flavour Peruvian cocoa, ITC

together with Minagri, Promperú, APPCacao

(Peruvian Association of Cocoa Producers) and

CBI organized a sensory analysis of Peruvian

cocoa that took place at the Salon du Chocolat

Paris. International cocoa tasters and the

representatives of the French chocolate industry,

invited by ITC, attended the event led by the

chocolate and cocoa researcher Ed Seguine.

New sensory profiles of cocoa varieties from San

Martin and Junin were presented during the

analysis.

One of the main objectives achieved at the Salon

du Chocolat Paris was to provide information

about the international markets to SMEs. The

Workshop l'Art du Chocolat organized by ITC

created an opportunity for Peruvian SMEs

producing chocolate to learn about European

market trends, high-quality chocolate products,

and chocolate manufacturing techniques.

ITC event at the COP 21 in Paris on climate

change and the role of trade

High-level meeting with ITC, UNCTAD and WTO during UNFCCC COP 21 addressed the role of markets and

trade to leverage co-benefits for climate change mitigation and adaptation.

The development agenda is an increasingly

important component of climate change policies

as recognized by the Intergovernmental Panel on

Climate Change under the term co-benefits –

complementary benefits.

Trade, along with finance and technology, has an

important role to play in leveraging the various

complementary benefits. At the same time,

climate policies can and do influence trade

among countries, promoting more sustainable

emission patterns and greater resilience for

enterprises, in particular for small businesses.

Examples of such co-benefits include economic

growth and development, poverty reduction, and

improved air quality, health, energy security, job

creation, biological diversity and water

management.

For the occasion of the UNFCCC COP21 Paris

summit in December 2015, ITC, UNCTAD and

WTO jointly organized the event “Climate change

and the role of markets and trade: leveraging co-

benefits”.

Speakers included Arancha González, Executive

Director, ITC; Joakim Reiter, Deputy Secretary-

General, UNCTAD; Karl Brauner, Deputy Director

General, WTO; Tim Groser, Minister of Trade

and Climate Change, New Zealand; Luis Enrique

Berrizbeitia, Executive Vice President, the

Development Bank of Latin America (CAF);

Margarita Astralaga, Director of the Environment

and Climate Division (IFAD); and Henry Neufeldt,

Head of the Climate Change Unit at the World

Agroforestry Centre (ICRAF).

The event brought into focus the role of markets

and trade in leveraging the various co-benefits in

the implementation period, starting from 2016

onwards.

ITC’s outlook on climate change

ITC Executive Director, Arancha González,

discussed the ways international trade can work

to support climate-smart solutions to developing

economies. Trade and climate policies can be

mutually supportive. For instance, strong

regulation on limiting greenhouse gas emissions

will set incentives for entrepreneurs, including

those from developing countries, to supply the

world with the goods and services needed for a

low carbon future. The interface of trade and

climate change should not only look at big

business, but also at SMEs, in particular in

building greater climate resilience and sharing

best practices.

ITC’s action on climate change is driven in

response to three main questions: 1) how can

trade organizations support the mitigation efforts

of SMEs?; 2) how can trade be used to create

new opportunities that are climate sensitive?; 3)

how can multilateral cooperation support public

policies and development objectives with specific

attention to SMEs and women, in particular in the

agricultural sector, as the sector most affected by

climate change?

ITC shares expertise in sustainable use at

CITES event

CITES side events reinforced ITC’s position as the leading organization advancing the sustainable use model of

conservation.

CITES (also known as the Convention on

International Trade in Endangered Species of

Wild Fauna and Flora) is an international

agreement to protect trade in endangered plants

and animals. ITC and CITES signed a letter of

agreement in January 2014 outlining a

collaboration to enhance the livelihood benefits of

rural communities involved in global wildlife trade.

ITC and CITES agreed that a particular focus will

be placed on market analysis and capacity

building.

The CITES-ITC collaboration combines the

expertise of two United Nations bodies to

increase the understanding of international

markets for products such as exotic skins,

medicinal plants, natural fibres and precious

timber, among others. The collaboration works to

bridge the information gap between harvesters,

producers, regulators, retailers and consumers

by mapping and preparing in-depth analyses of

the dynamics of value chains for selected

endangered flora and fauna. The collaboration

also strengthens ITC’s efforts to build models of

trade that incentivize communities and small and

medium-sized enterprises to sustainably trade

biodiversity products and services. ITC and

CITES will continue to focus on supporting

analysis and capacity building leading up to the

next busy meeting, the17th meeting of the

Conference of the Parties to CITES (COP17),

which will be held in South Africa in September

and October this year.

At the annual CITES Standing Committee

meeting attended by around 300 delegates, ITC

presented results from its work at three separate

side events.

Early Rhino-Demand Results

A side event organized by ITC in partnership with

CITES Management Authority of Viet Nam, the

Durrell Institute of Conservation and Ecology

(DICE) and IUCN presented the early results of a

consumer preference survey on trends in the

demand for Traditional Asian Medicine containing

animal derivatives. Demand was particularly high,

with the room overflowing with attendees.

The international demand for animal and plant

derivatives listed under CITES used in traditional

medicine, luxury foods and curios especially in

Asia remains strong and rising In order to

understand more about consumer preferences

for sustainably sourced wildlife products and to

inform policymakers about the prospects for

reducing demand for endangered species, ITC is

carrying out a consumer preference survey on

trends in the demand for Traditional Asian

Medicine containing animal derivatives. The

choice experiment and interviews were

conducted in Viet Nam in November and

December 2015 and will be completed in March

2016.

The side event shared early results from the

survey which aims to:

Assess the drivers of demand for derivatives from endangered species for use in traditional medicine

Evaluate substitution effects (e.g. between wild caught and captive-bred wildlife products)

Assess prospects for demand reduction in Asia, among other proposed policy responses

Evaluate the impact of various trade policies on demand (such as trade bans, quotas)

Showing Results of the Python

Conservation Partnership

In 2013, three organizations — ITC, IUCN and

Kering ― formed the Python Conservation

Partnership (PCP) to address conservation

issues in fashion supply chains. One of the

functions of this public-private partnership is to

conduct publicly available research and capacity

building to strengthen sustainability in the supply

chain for python skins. The PCP, including ITC’s

Executive Director Arancha Gonzalez, presented

results from its research on three areas of the

supply chain: livelihoods from python farming;

sustainability and animal welfare of wild harvest

and captive breeding and appropriate technology

to improve traceability. These results will be

published in early 2016, and will guide capacity

building for python range states and inform

CITES Parties and decision-making particularly in

the CITES Working Group on Pythons.

Helping Launch the Sustainable

Livelihoods Handbook

Finally, the Head of the Trade and Environment

Programme, Alexander Kasterine, participated on

a panel for the launch of a new handbook on

CITES and livelihoods, released jointly by CITES

and the Organization of American States (OAS).

Mr. Kasterine highlighted programmatic work

under the agreement between CITES and ITC.

The event underlined ITC’s support to the

sustainable use model of wildlife conservation

through the use of economic analysis and

capacity building.

New ITC-TRAFFIC publication

promotes sustainability for Chinese

medicinal plants

International standards could contribute to better harvesting and trade practices

Substantial market opportunities exist around the

world for certified medicinal and aromatic plants

from China such as ginseng and frankincense. A

new ITC publication points to how these

opportunities can be captured in an

environmentally responsible manner, contributing

to improved biodiversity conservation and higher

household incomes in the rural communities

engaged in the collection of such plants in the

wild.

‘Sustainable Sourcing: Markets for Certified

Chinese Medicinal and Aromatic Plants’,

prepared in partnership with TRAFFIC, the

wildlife trade monitoring network, reviews the

potential global market for sustainably wild-

collected botanical ingredients originating from

China. The analysis provides an overview of

current trade in wild-collected and cultivated

botanical, algal and fungal ingredients. These

include tea leaf, medicinal plants like ginseng,

and aromatics such as ginger, herbal extracts,

essential oils, natural gums, and seaweeds. It

also describes market dynamics for certified

ingredients.

The report provides a clear picture of how

international sustainability standards and

certification schemes relate to wild-harvested

plant ingredients from China, and encourages the

uptake of best practices in sustainable wild-

harvesting and equitable trade. In so doing, it

contributes to the pursuit of the Convention on

Biological Diversity’s Aichi Biodiversity Targets,

which provide a framework on biodiversity for all

partners engaged in biodiversity management

and policy for the decade up to 2020. The report

also supports key objectives of the Global

Strategy for Plant Conservation (GSPC) and the

Convention on International Trade in Endangered

Species (CITES).

China is the biggest source and centre of

production for many medicinal and aromatic plant

materials used in traditional Chinese medicine. It

produces a wide variety of plant-based herbal

medicines and ingredients that are consumed

within China and worldwide. However, wild plant

resources in China, as in other parts of the world,

are under threat, in large part because of

overharvesting to meet high demand for

© Zhang Ke © Li Jiangliang

traditional medicines and herbal products.

Sustainable sourcing is therefore essential for the

conservation of the species.

Moreover, sustainability certification can improve

China’s share in the fast-growing market for

sustainably sourced products. Fair Trade USA

(FTUSA) reported a 23% increase in the quantity

of fair trade certified herbs and spices imported

by the United States in 2013 compared with the

previous year. Globally, Fairtrade International

(FLO) estimated a 182% growth rate for fair trade

certified herbs, herbal teas and spices in 2013

compared with 2012.

The paper is part of a series entitled

Sustainability Market Guides produced by the

ITC Trade and Environment Programme.

*This article is available online.

Empowering Madagascan women with

environmental know-how

Support for women’s associations in Madagascar to enhance raffia production is also helping the conservation of

biodiversity in the country

It is somewhat ironic that with more than 3 billion

people, the rural poor, who have very little in the

way of personal resources, constitute the largest

group of natural resource managers. Within this

group, women have a key role in sourcing natural

resources as farmers and household providers.

They are responsible for harvesting, collecting of

fuel and water and cultivating subsistence crops.

Despite providing in large measure for their

family needs, women are often denied natural

resource governance functions within their

communities. By contrast, men are dominating

governing roles such as commercializing land,

water, plants and animals and thus generating

income for their community.

Due to degradation of natural resources caused

by climate change and biodiversity loss, women

are dedicating an increasing amount of time to

sourcing natural resources, such as walking

longer distances for collecting fuelwood and

water and harvesting wild plants.

However, women can act as effective agents of

change in relation to the conservation of

biodiversity as well as climate change mitigation

and adaptation. Their role as stewards of natural

and household resources positions them well to

advocate climate-smart strategies to build

resilient communities.

Madagascar makes a good example. According

to the World Bank, two-thirds of the country’s

population is living in rural areas. With more than

40 protected areas accounting for around 2

million hectares of land, the livelihoods of the

majority of rural people depend on sourcing

natural resources from the buffer zones

surrounding those areas.

Biodiversity Hotspots

Madagascar’s forests are biodiversity hotspots,

home to species found nowhere else. At the

same time, the country faces stern development

challenges: high poverty rates, population growth

and slow economic development. Its unique

forest habitats face grave threats from slash-and-

burn agriculture and illegal logging, exacerbating

the fallout from changing temperature and rainfall

patterns.

Fibres from raffia palms have long been used for

making traditional handicrafts, twine, rope and

clothing. More recently, woven hats and bags

made from raffia have started to find favour in the

international fashion industry. However, this has

not yet translated into a payoff for the women’s

cooperatives that typically process raffia and sell

it on to traders as raffia yields have been battered

by deforestation and climate change.

Climate Resilience

The International Trade Centre (ITC) is working

with the Wildlife Conservation Society (WCS) to

build climate resilience, improve sustainability

practices and raise incomes in communities

reliant on raffia for their livelihoods.

As yields decline the women’s associations must

improve harvesting practices and upgrade

processing and quality to meet the exacting

standards of international buyers. To maximize

the prices they receive, they need to complement

increased productivity with improved product

design and direct sales to international buyers.

In areas surrounding the WCS-managed Makira

National Park, ITC is training women’s

associations on climate-change adaptation and

climate-smart raffia harvesting and processing

techniques as well as organizational

management.

By increasing incomes for households near the

park, one of the country’s largest remaining mid-

elevation tropical forests, the programme aims to

reduce dependence on unsustainable

exploitation of natural resources while engaging

local communities as collaborative managers in

the 372,000-hectare park’s conservation

activities.

ITC and WCS conducted training workshops in

2015 for around 200 women from six women’s

associations in the Makira area, on raffia

harvesting, sorting, drying, tanning, quality

improvements, product design and planting

aimed at ensuring climate resilience and long-

term profitability.

This capacity building was implemented in two

stages. First, 24 women representing six

individual federations in total were equipped to

train fellow association members in the long run.

Next, week-long training workshops were held in

multiple villages for some 180 women from the

six associations.

‘During the training, we learnt a lot about raffia

and we are now crafting betterquality items,’ said

Florine Zafijery, a member of one of the

associations benefitting from the project.

As a result of the workshops the women in the

buffer zones of Makira Park are now following

more sustainable techniques of raffia sourcing.

For instance, they learned to source raffia leaves

only during the dry season. Furthermore, the

associations learned to harvest leaves of a

minimum length of 120 centimetres to reach the

maximum length. They were also trained in

reforestation techniques to ensure long-term

raffia sustainability.

The programme’s training activities will expand in

2016 to cover eight additional women’s

associations in the Makira Park area, bringing the

total number of beneficiaries to 450. Furthermore,

two women from each of the participating groups

will receive intensive training on product design

and manufacture for the international market,

enabling them to train their peers with the goal of

better equipping the associations to sell value-

added products.

For its part ITC will build on its market-

connecting work to create a network of potential

raffia purchasers. Together with WCS, ITC will

help the associations enhance their legal status

so they can more easily strike contracts with

international buyers. ITC will also assist the

associations in leveraging its Blue Number

initiative, a global online network and tracking

system for farms and agro-industry, to garner

increased visibility on the raffia value chain.

Bolstering Livelihoods

The raffia project is the first step in broader

collaboration between ITC and Madagascar’s

trade and environment ministries to promote

exports of sustainable natural resources to

bolster rural livelihoods and while conserving

biodiversity.

Empowering rural women with environmental

knowledge and market intelligence is the key to

giving them a voice in community based natural

resource management. It enables them to

source, manage and trade their produce locally

and internationally, thus generating additional

income for their communities and improving

livelihoods.

*This article is available online.

New ITC Environmental Mainstreaming

Policy lays path for green competitiveness

The Trade and Environment Programme held a series of Environment Mainstreaming workshops to help direct all

of ITCs projects towards sustainability

In early 2015, ITC trained its staff on

mainstreaming environmental concerns into

their projects. Over the course of four sessions,

more than 50 staff and consultants learned how

to use the Environment Mainstreaming Guide.

The training was well received, with more than

95% saying that they would recommend it to a

colleague.

The International Trade Centre is committed to

delivering trade impact for good. This means

working with small and medium sized

enterprises (SMEs), trade support institutions

and policymakers to strengthen developing

economies’ ability to trade. In recent years,

economists, business leaders and politicians

around the world have come to understand the

inexorable link between strong economic

development and robust protection of natural

resources.

It is clear that ITC could play a critical role for

our SME beneficiaries by helping them mitigate

environmental risks and taking advantage of

new environmental market opportunities. The

Environmental Mainstreaming Guide for project

managers is the culmination of that work.

Several developing country governments

expressed concern about the environmental

impact of trade at the recent WTO Ministerial

Conference in Nairobi, saying that it was

increasingly clear that poor environmental

management was a barrier to economic

development. The Guide will ensure that ITC is

addressing these concerns in our own project

work, breaking new ground for the aid-for-trade

community.

We have seen strong interest expressed by

ITC’s funders. Many funding governments and

organizations see SME export development as

a critical tool in a wider push for economic

development. Also central to that development

is ensuring sustainable use of natural

resources. ITC’s SME clients, especially those

in the agricultural sector, face increasing risks

from unpredictable and volatile climate change.

For instance, Cyclone Winston, with sustained

winds of 230 kilometers per hour, caused

serious damage to a number of ITC

beneficiaries on the island of Fiji. Even for those

who do not face such extreme events, climate

change is reducing yields and thus smallholder

incomes. While it will remain difficult to plan for

such extreme events, better awareness of the

risks brought by changing climate will help ITC

beneficiaries build resilient businesses.

Additionally, integrating environmental concerns

may unlock competitiveness benefits or revenue

streams that our SME partners may not know

exist. Practices that make efficient use of

natural resource inputs usually have the benefit

of also being economically efficient. Most

significantly, however, is the possibility of

opening new markets with certified products

that meet high environmental standards.

Increasingly, ITC will be helping support these

businesses gain access to certification, directly

and through trade-supporting institutions. These

products often fetch premium prices, helping

producers create and capture higher value form

their businesses. Increasingly such certifications

are not simply a premium, but a prerequisite for

selling to selective buyers from wealthy

markets. In short, mainstreaming will be critical

for ensuring that ITC continues to help shape

profitable and economically sustainable

businesses.

15

Contact person: Alexander Kasterine

Head, Trade and Environment Programme

Division of Market Development

E-mail: kasterine@intracen.org / environment@intracen.org

Street address: ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland

Postal address: ITC, Palais des Nations, 1211 Geneva 10, Switzerland

Internet: www.intracen.org/itc-environment-blog/

Facebook: www.facebook.com/ITCenvironment

Twitter: @ITCenvironment