The EU wants to have a positive impact on social development and environmental protection in other countries. In the Lisbon Treaty, it undertakes to promote social progress and environmental protection via foreign relations. Trade policy can make an important contribution to such efforts.

At their summit in July 2017, the governments of the G20 were able to agree not only on a joint statement in favour of free trade and against protectionism but also on important announcements about sustainable global supply chains.

Within the framework of the United Nations’ Agenda 2030, 17 goals for global sustainable development were established under the name “Sustainable Development Goals” (SDGs) in 2015. The novelty is that this global agenda has been drawn up not just for developing and emerging countries but rather for all members of the United Nations. For the first time, industry has a major role in the implementation process of the SDGs.

The implementation of the Paris climate agreement will be significantly more difficult after the United States announced its withdrawal. But many other countries are determined to achieve progress on this matter. Successful companies are the main prerequisite for effective climate protection.

Germany is a winner of globalisation. Open borders offer opportunities for other countries, too – not only for greater prosperity, but also for a more sustainable development. Globalisation and sustainability are not opposites. But designing a framework for the global economy remains a global governance challenge.

German Industry is and has been committed to the principle of sustainability and the values of the “honourable merchant”. Voluntary international sustainability standards are of high importance for German companies. Preserving German industry’s competitiveness is a prerequisite to act in the endeavour of advancing sustainability worldwide.

Effective sustainability chapters are not yet a common standard in today’s trade agreements. Negotiating partners often take a sceptical view of sustainability clauses, or even treat them as trade barriers. The European Union and the United States, on the other hand, remain committed to raising international social and environmental standards through their free trade agreements. German industry welcomes binding rules to promote sustainability.

The European Union is introducing measures to restrict trade in so-called conflict resources. In March 2014, the EU-Commission published a first draft. In June 2016, after six months of intense negotiations, the Commission, the European Parliament, and the European Council agreed on a basic framework for the regulation. However, the regulation needs a much clearer definition of conflict-affected and high-risk areas.

The UN’s sustainable development goals will transform national and international development cooperation. The prominent role assigned to the private sector represents a significant innovation.

The multi-stakeholder Partnership for Sustainable Textiles seeks to improve social and ecological conditions in the international garment industry. Its 188 members recently agreed to cease using 100 chemicals.

Textile production in Europe meets the highest global standards. Importing clothing, especially from South-East Asia, is a different matter. Here we certainly have to be very careful.

German companies have a strong interest in fair international economic relations and comparable anti-corruption rules worldwide. Corruption does not only have a direct negative economic impact. It also harms the reputation of companies and of industry as a whole.

Workforce integrity is the backbone of any company. The most important lever for implementation is management’s resolve and leadership training.

The German government is working on an action plan to implement the UN’s guidance on business and human rights. Is there a risk of legal liability arising for human rights violations occurring anywhere along the value chain?

By adopting Sustainable Development Goals, the United Nations introduce a compass for sustainable policy action. They apply equally to industrialised and developing countries. German industry can make a major contribution to the implementation of the SDGs. A political framework that avoids weakening competitiveness is required.

German companies are increasingly integrated in global supply chains. As a consequence, the expectations on companies to comply with social and environmental standards have also risen.

Existing export control systems safeguard competitiveness and protect Germany’s elementary security interests. But current proposals to reform the EC Dual-Use Regulation threaten to upset the balance. There is no guarantee that the proposed measures will improve human rights protections.

The new G20 Strategy for Global Trade Growth emphasizes the contribution of sustainability as trade and investment can make substantially to achieving the Sustainable Development Goals (SDGs).

What does due diligence in international supply chains mean in practice? The OECD is working on guidance to improve clarity for business. But the increasing complexity of supply chains means that companies’ influence has limitations.

With the Vision Zero Fund, the G7 nations aim at improving working conditions in the producing countries. To this end, local governments have to be supported through capacity-building. Companies can complement these efforts.