Industry 4.0 Technologies and Value-Added Services: Opportunities and challenges for LDCs

This session explored the challenges and opportunities of integrating industry 4.0 technologies in LDCs’ value-added services, and discussed ways to help them reap the fruits of the digital age for increased integration in global value chains. Services inputs play an increasingly important role in global manufacturing by contributing to the value -added of all sectors. The COVID-19 pandemic showed the critical role that ICT and computer services play in facilitating global trade, and revealed that the integration of technologies and innovation in financial, transport and logistical services will be key to economic recovery and enhanced production capacity.

The session started by highlighting the importance of the services sector and value-added services for LDC economies. For Cambodia, Services may be considered the “next step in structural transformation” as they represented 36% of Cambodia’s GDP and employed 37% of the country’s total workforce before COVID-19. Hence, services are at the core of Cambodia’s various development strategies, including supporting digital services with high export potential, especially IT-enabled, fintech and animation services, but also enhancing input services’ readiness for technological advancements and Industry 4.0. One of the critical challenges affecting service providers’ ability to adopt new technologies, such as Artificial Intelligence, Robotics and Automation, the Internet of Things and others, is the need for workforce skills development. This is confirmed by the “Frontiers Technologies Readiness Index” prepared by UNCTAD and also other studies.

The discussions also reflected that while studies are showing that critical sectors in LDCs, such as agriculture and tourism, are using Industry 4.0 technologies, it is often on an experimental or pilot basis, using non-sustainable donor funds. Panellists agreed that developed countries and the donor community can play a broader and more profound role in supporting LDC integration in Industry 4.0 and its Global Value Chains, by supporting in-depth national studies to bridge the data gap, integrating industry 4.0 in regional trade agreements (RTAs) to promote LDC integration in value chains and responding to LDC demands for support and providing the necessary aid to promote the technological ramp-up of services in sectors of interest.

At the end, panellists shared a common view that adopting Industry 4.0 technologies in LDCs has to be gradual. They emphasised the importance that LDCs develop national strategies for Industry 4.0 integration and technological ramp-up. This was supported by a presentation by CUTS International on the driving considerations for adopting emerging technologies for firms and businesses. The presentation showed the results of recent studies by international organisations and academia on how Industry 4.0 technologies have different maturity time and diffusion speed which affects businesses’ decision and ability to adopt them. Finally the session concluded with a road map towards LDCs integration into Industry 4.0. Key elements of the road map included: i) conduct Industry 4.0 readiness assessments at macro and micro levels, ii) identify sectors of interest for technological ramp-up, iii) make Industry 4.0 accessible to SMEs through Public Private Partnerships (PPP), Investments, negotiated RTAs and facilitating access to finance, iv) digital upskilling programmes for youth and workforce, v) the development of national strategies for Industry 4.0 integration per sector and support it with the required regulatory reform and development and vi) consider education reform to support innovation.

On the panel were Rashid S. Kaukab, Executive Director, CUTS International, Geneva; Long Kemvichet, Ambassador and Permanent Representative to the WTO, Permanent Mission of the Kingdom of Cambodia to the World Trade Organization (WTO) and other International Organizations; Shamika N. Sirimanne, Director of the Division on Technology and Logistics, United Nations Conference on Trade and Development (UNCTAD); Jeremy Green, Deputy Permanent Representative, Permanent Mission of Australia to the World Trade Organization (WTO); Yasmin Ismail, Programme Officer, CUTS International Geneva.

Climate Negotiations and Action

Sharm El-Sheikh Climate Change Conference (COP27)

From 6 to 18 November 2022, the coastal city of Egypt, Sharm El-Sheikh, hosted the 27th Conference of the Parties (COP27) as the Egyptian Government assumed the COP presidency. Regarded as the “Climate Implementation Summit”, COP27 aimed to be the moment of “shifting from pledging to implementation at scale and on time”.

Competition Policy

World Competition Day 2022: Competition Policy and Climate Change

This year, CUTS International Geneva, the WTO Secretariat, and UNCTAD’s Competition and Consumer Policies Branch invited the Geneva community to celebrate the World Competition Day (WCD) on 5th December by exploring the interaction between climate change action and competition policy.

Climate change is one of the key disruptors of economies, and most competition policies and laws are flexible enough to be part of the solution provided they are appropriately designed and effectively implemented. “We need a “whole of all governments” approach to deal with the present crisis of climate change with competition policy tools” said Pradeep S Mehta, Secretary General of CUTS International while opening the discussions. His stress was on the global community to act together

“On 5th of December 1980 the United Nations adopted the UN Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, which to date remains the only multilaterally agreed instrument on Competition Policy”, he recalled, as today’s event celebrated World Competition Day in commemoration of this date.

Synergies between competition and climate policies can play an important role in greening the economy, including by incentivising for green innovation, curbing entry barriers to flow of environmentally benign goods and services, and empowering consumers to make informed decisions. Competition policy is also key to ensure efficient allocation of capital needed to reach environmental goals.

Yet, competition authorities may face challenges when undertaking competition assessments, such as determining which and to what extent environmental effects may be taken into account; how environmental efficiencies can benefit consumers; which timeframe for environmental effects to adopt; and how to balance environmental effects with other types of effects. Therefore, sensitising and building capacities of competition authorities on the interface between competition policy and climate change should be a priority.

In this regard, international organisations such as UNCTAD, World Bank and WTO can assist developing countries to create, develop and improve competition law and policy, consumers’ lives, and achieving sustainable development goals.

Discussing how competition law and policy can support sustainability, experts on the panel noted that, in certain cases, some horizontal agreements or cooperation between competitors may lead to greater benefits for consumers and the society. In fact, firms through such cooperation can leverage complementarities and achieve greater scale and productivity in reaching environmental objectives. Taking this into account may sometimes require clarifying the objectives of competition law, its definition of consumer welfare, incorporating considerations of sustainability in their competition assessments, and adjusting legislation accordingly.

As a case in point, it was noted that in 2021 Austria adopted the Cartel and Competition Law Amendment Act to allow for the consideration of sustainability goals, which was followed by the Austrian Competition authority “Sustainability Guidelines”, providing guidance for competition law exemptions of some environmental sustainability agreements.

The Dutch Competition Authority also published in 2021 “Guidelines on Sustainability Agreements”, providing guidance on the application of competition law to sustainability initiatives and to considering the rationale for adopting exemptions in this context. This had been supported by a 2021 technical report commissioned by the Dutch and the Greek competition authorities.

Such paradigm shifts in competition enforcement have been observed in the past, and can contribute to ensure the continued relevance of regulators’ actions in a changing world. For instance, the “wait and see” approach of competition authorities towards digital markets changed towards legal amendments, use of data analysis, tighter law enforcement and “ex-ante” regulation in recent years due to the rise of digital platforms and the increased weight of data in market power.

Experts however cautioned that sustainability approaches in competition law and enforcement remain new, and being experimented by a few advanced competition regimes so far. Before time is ripe for their adoption by smaller or younger competition authorities in developing countries, experience of practice will need to be further acquired and lessons shared through exchange of knowledge and cooperation. In conclusion, CUTS’ Secretary General Pradeep S. Mehta emphasised the need for better governance and increased policy coherence with some key policy issues related to competition and climate change, including by taking into consideration the role of intellectual property rights.

He added that even the UN Guidelines for Consumer Protection has a full chapter on sustainable consumption which has direct relation to curbing adverse climate change actions. Even the SDGs Agenda at Goal 12 deals with Sustainable Consumption and Production. “We have so many international instruments to deal with the issue of climate change and economic governance and thus we need a forward looking narrative for a better tomorrow, through all appropriate means”, he said.

On the panel were Pradeep S Mehta, Secretary General, CUTS International; Teresa Moreira, Head, Competition and Consumer Policies Branch, UNCTAD; Antony Taubman; Director, IP, Government Procurement and Competition Division, World Trade Organization. The discussion was moderated by Rashid S Kaukab, Executive Director, CUTS International Geneva.


World Trade Congress on Gender

The World Trade Congress on Gender is the first international research conference on trade and gender. The Congress’ objective was to release research work conducted by trade and gender experts, with innovative thinking will be at the heart of the Congress. About 30 researchers from all over the world presented their latest findings on trade and gender.

Trade Facilitations

Tanzania Consultations on “Prototyping a Better Trade Resilience Toolkit”

This workshop convened key stakeholders of trade and resilience, drawn from the government as well as relevant non-state actors. The objective was to present, discuss and gather stakeholder suggestions on a prototype of a prospective “Better Trade Resilience Toolkit” developed by CUTS International. The prototype conceptualises the substantive basis for the toolkit which would help governments diagnose and prioritise their policy efforts to leverage trade towards better resilience to shocks.

Trade Facilitations

Cambodia Consultations on “Prototyping a Better Trade Resilience Toolkit”

This workshop convened key stakeholders of trade and resilience, drawn from the government as well as relevant non-state actors. The objective was to present, discuss and gather stakeholder suggestions on a prototype of a prospective “Better Trade Resilience Toolkit” developed by CUTS International. The prototype conceptualises the substantive basis for the toolkit which would help governments diagnose and prioritise their policy efforts to leverage trade towards better resilience to shocks.