Is there a sweet spot in ethical trade? A critical appraisal of the potential for aligning buyer, supplier and worker interests in global production networks

Abstract

P. Lund-Thomsen), adli.marktg@cbs.dk (A. Lindgreen). Highlights• We critically appraise the so-called 'sweet spot' in ethical trade.• We contrast the perspectives of buyers/brands, suppliers, and workers.• We theorize the circumstances in which their interests intersect.• The prospects for identifying a sweet spot are highly constrained. AbstractWe undertake a critical appraisal of the existence of the so-called 'sweet spot' in ethical trade at which the interests of buyers, suppliers, and workers intersect to enable benefits for commercial buyers and suppliers and improvements in the conditions of workers at the base of global production networks. In turn, we take the perspectives of three central actors typically involved in ethical trade: buyers/brands, suppliers in the Global South, and workers at the base of these networks. By applying all three perspectives, we theorize about the circumstances in which the sweet spot in ethical trade might emerge, reflecting an amended 2 version of Gereffi et al. 's (2005) theory of value chain governance. We conclude that the possibility of identifying a sweet spot in ethical trade improves as we move from marketbased transactions toward hierarchical governance in global production networks. Global production networksGPNs also are contested fields -in which actors struggle over the construction of economic relationships, governance structures, institutional rules and norms, and discursive frames‖ (Levy, 2008, p. 944). The resulting power relations in GPNs are neither unidirectional nor structurally determined; they involve both -cooperation and collaboration‖ and -conflict and competition‖ across the actors, brands, suppliers, and workers (Coe et al., 2008). Moreover, the outcomes of value chain struggles are determined jointly by vertical and horizontal network relations. The former refer to power relations between buyers and suppliers in GPNs; the latter reflect the influences of different institutional levels, from economic, labor, and environmental laws to the informal norms embraced by private-sector firms, international organizations, trade unions, or NGOs, all of which operate at various geographical scales (Lund-Thomsen and Coe, 2015; Nielson and Pritchard, 2010).This outline of the basic contours of the GPN approach provides a central organizing device for critically appraising the prospects for and hindrances to finding an optimum point in ethical trade, from the perspectives of buyers, suppliers, and workers. We start our analysis with the buyer perspective. Buyer PerspectivesIf we look at ethical trade literature from the perspective of international buyers, two dominant approaches emerge that offer very different implications for the notion of finding a common point at which the interests of buyers, suppliers, and workers intersect (Locke, 2013). The first refers to a compliance model or strategy, in which buyers develop a code of conduct, require first-tier suppliers to abide by this code, monitor whether it is being implemented (e.g., first-, second-, or th...

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Moveable Production Systems for Sustainable Development and Trade: Limitations, Opportunities and Barriers

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“…Conflict and cooperation can involve vertical and horizontal network relations. The outcomes of GPN interactions are determined jointly by vertical network relations between suppliers and buyers, together with horizontal relations between different bodies concerned with labor and the environment [38,39].…”

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