Academic literature on the topic 'Private food standards'

Private food safety standards have become an important governance mechanism in contemporary food supply chains. While much has been written about private standards from the perspectives of different academic fields, there has never been a dedicated literature review to examine their interaction with global food supply chains. In this systematic review, 45 peer reviewed articles on private food standards, selected through extensive searches in four academic databases are critically appraised. Our analysis reveals that the most studied European private food safety standards are owned by retail conglomerates and therefore place the retail sector in a position of influence in the supply chain. These standards influence supply chain structures, market access, and the efficiency of food safety management systems. They also challenge the traditional relationship shared by actors in the supply chain with public authorities and the World Trade Organization. In the recent years, their scope has expanded to include topical issues such as environmental sustainability, worker safety, and animal welfare. Overall, the review suggests that European private food safety standards alter the operations of modern agri-food supply chains to accommodate consumer wishes while allowing the retail sector to exert its influence without taking on additional legal and economic liability.

AbstractPrivate standards have increasingly become a contentious issue in the multilateral trading system. The ever increasing number of sector-specific standards developed by businesses, in particular in the food market, may have significant implications for developing countries in terms of market access. Some countries see private food standards as a particular form of non-tariff barriers. The World Trade Organization (WTO) deals with non-tariff barriers in the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement) and in the Agreement on Technical Barriers to Trade (TBT Agreement). This paper examines to what extent these agreements cover private standards, as they were originally intended to regulate standard-setting by public authorities. We find that there is an important difference between the SPS Agreement and the TBT Agreement in that the drafters of the latter realized the importance of the private sector in standard-setting. Finally, we discuss whether a ‘Code of Good Practice for the Preparation, Adoption and Application of Standards’, similar to that under the TBT Agreement, could be adopted under the SPS Agreement.

<p>Private agri-food standards have emerged in response to the constraints imposed on the role of the state under the influence of neoliberalism. These standards reflect the ongoing ‘value wars’ between the money code of value and the life code of value (McMurtry 2002). While some private agri-food standards operate within the money code of value (e.g., Red Tractor or CanadaGap), others can be more fruitfully situated within the life code of value because they ‘remove the veil’ (Hudson and Hudson 2003) from food commodities to reveal the exploitative social, economic and environmental relations inherent in today’s “feral capitalism” (Harvey 2011). This paper will use these codes of value to interpret three cases – organics, fair trade and Local Food Plus – with the aim of informing discussion regarding the emergence of standards as a form of governance. It will argue that conceptualizing standards as a commons will help us to better analyze the threats and opportunities posed by the rise of private agri-food standards and will open up the possibility that they can provide a form of life-protective governance that benefits what has come to be known as ‘the 99 percent.’</p>

The proliferation of private voluntary standards (private standards) in international food trade has precipitated a surge of inter-disciplinary discourse on the topic. Conceptual premises have been diverse, but a common thread through the discourse has been their practical impact on developing-country producers (particularly small to medium scale ones). The present paper contributes to legal analyses of private standards. It builds upon existing discourse on rules-based responses to private standards, from the conceptual premise of the rule of law. The perspective of the paper is that private standards are creating conditions wherein the rule of law in international food trade is being placed under strain. With that, the utility of the rules-based system of international food governance has begun to diminish. The viewpoint in this paper is that, from the perspective of the WTO, responses to private standards should be underlain by considerations of safeguarding the rule of law. Underscoring this is that a rule of law approach is the most ideal, in the long-term, for the WTO system and for low income Members themselves. The paper concludes that this will entail a necessarily multipronged strategy towards the challenges presented by private standards – one which incorporates rules-based responses, other interventions from within the WTO, and responses from outside of the WTO.
Dissertation (LLM)--University of Pretoria, 2012.
Centre for Human Rights
unrestricted

L’argomento scelto riguarda l’adozione di standard privati da parte di imprese agro-alimentari e le loro conseguenze sulla gestione globale dell’azienda. In particolare, lo scopo di questo lavoro è quello di valutare le implicazioni dovute all’adozione del BRC Global Standard for Food Safety da parte delle imprese agro-alimentari italiane. La valutazione di tale impatto è basata sulle percezioni dei responsabili aziendali in merito ad aspetti economici, gestionali, commerciali, qualitativi, organizzativi. La ricerca ha seguito due passaggi fondamentali: innanzitutto sono state condotte 7 interviste in profondità con i Responsabili Qualità (RQ) di aziende agro-alimentari italiane certificate BRC Food. Le variabili estrapolate dall’analisi qualitativa del contenuto delle interviste sono state inserite, insieme a quelle rilevate in letteratura, nel questionario creato per la successiva survey. Il questionario è stato inviato tramite e-mail e con supporto telefonico ad un campione di aziende selezionato tramite campionamento random. Dopo un periodo di rilevazione prestabilito, sono stati compilati 192 questionari. L’analisi descrittiva dei dati mostra che i RQ sono in buona parte d’accordo con le affermazioni riguardanti gli elementi d’impatto. Le affermazioni maggiormente condivise riguardano: efficienza del sistema HACCP, efficienza del sistema di rintracciabilità, procedure di controllo, formazione del personale, miglior gestione delle urgenze e non conformità, miglior implementazione e comprensione di altri sistemi di gestione certificati. Attraverso l’analisi ANOVA fra variabili qualitative e quantitative e relativo test F emerge che alcune caratteristiche delle aziende, come l’area geografica, la dimensione aziendale, la categoria di appartenenza e il tipo di situazione nei confronti della ISO 9001 possono influenzare differentemente le opinioni degli intervistati. Successivamente attraverso un’analisi fattoriale sono stati estratti 8 fattori partendo da un numero iniziale di 28 variabili. Sulla base dei fattori è stata applicata la cluster analysis di tipo gerarchico che ha portato alla segmentazione del campione in 5 gruppi diversi. Ogni gruppo è stato interpretato sulla base di un profilo determinato dal posizionamento nei confronti dei vari fattori. I risultati oltre ad essere stati validati attraverso focus group effettuati con ricercatori ed operatori del settore, sono stati supportati anche da una successiva indagine qualitativa condotta presso 4 grandi retailer inglesi. Lo scopo di questa successiva indagine è stato quello di valutare l’esistenza di opinioni divergenti nei confronti dei fornitori che andasse quindi a sostenere l’ipotesi di un problema di asimmetria informativa che nonostante la presenza di standard privati ancora sussiste nelle principali relazioni contrattuali. Ulteriori percorsi di ricerca potrebbero stimare se la valutazione dell’impatto del BRC può aiutare le aziende di trasformazione nell’implementazione di altri standard di qualità e valutare quali variabili possono influenzare invece le percezioni in termini di costi dell’adozione dello standard.

La tesi di dottorato fornisce una ricostruzione, sotto il profilo civilistico, del ruolo di standard e certificazioni nel mercato agro-alimentare europeo. Nel primo capitolo viene ricostruita la natura delle certificazioni e la loro evoluzione da strumento di competitività delle imprese a mezzo per colmare le asimmetrie informative presenti nel mercato. Nel secondo capitolo viene analizzato il “Sistema Qualità”, nel quale sono coinvolti quattro attori fondamentali: l’ente di normazione, l’ente di accreditamento, il certificatore e, infine, l’impresa che richiede la certificazione, e sono analizzate le varie problematiche sottese al suo funzionamento. Nella terza parte si è indagata la natura giuridica del contratto di certificazione di qualità e la rilevanza delle certificazioni di qualità sotto il profilo civilistico. Infine, nella quarta parte, si sono analizzate le conseguenze giuridiche scaturenti da una certificazione non veritiera, con particolare riguardo alla possibilità o meno di configurare una responsabilità extra-contrattuale del certificatore per i danni causati a consumatori e terzi in generale a seguito del rilascio di una certificazione non veritiera.
The dissertation examines the role of certification marks in the european food- sector. The first chapter analyses the function of certification and their development from instruments of competitive advantages within firms to a tool for fulfilling the information asymmetry between business and consumer. The second chapter deals with the “Quality System”: a system which involves four players: the standardization body, the accreditation body, the certification body and, finally, the producer seeking the certification. The third chapter analyses the certification activity and the obligations of the parties of the contract. The last chapter deals with the tort liability of certification bodies.

Focussed on the intersection of transnational private regulation, international horticulture value chains, this research seeks to understand why support provided by various actors for functional upgrading (upgrading whereby producers or groups of producers develop capacity in higher-value production techniques to capture more of the product's value) within value chains works in some contexts, yet not in others. This study was stimulated by the observation that significant effort is expended by various supply chain actors to help horticulture producers in the Global South upgrade their practices to meet the requirements of transnational private regulation, as a means to improve livelihood outcomes for farmers in the Global South. This was typically, but not exclusively, augmented by support from the relevant local and national governments and the private sector. Despite the magnitude of this support, the outcomes of functional upgrading projects are highly variable. While some of these projects have been successful in supporting horticulture producers to meet certification requirements, which usually leads to improved market outcomes for the farmers involved others have been criticised for delivering perverse outcomes to wealthy farmers, rather than directing supporting those who most need it. I argue that a key theory adopted to understand supply chains, global value chain analysis, should be enriched in its institutional component to understand the role institutions play in mediating and structuring supply chains which in turn, may guide a deeper understanding of the variation in project outcomes. I combine modes of analysis from sociological and historical institutionalism, which I then use to augment the institutional component of global value chain theory, and apply this to a case study of functional upgrading projects in Binh Thuan, south-central Viet Nam. By applying a novel conceptualisation of institutions to a global value chain study, the research findings show that farmers' decisions around functional upgrading are complex and rooted in their history, culture, social norms and values and, consequently, expectations about their own and other's behaviour. In doing so, I demonstrate that ensuring to undertake an analysis of these layers of complexity, and consideration of how these can and do impact the decisions made by farmers, could lead to more efficacious targeting of support for farmers, if meeting the requirements of transnational private regulation continues to be considered a mechanism for improving the livelihoods of farmers in the Global South. This thesis addresses two gaps in the current knowledge. First, this thesis responds to calls to combine different institutional analyses to develop more comprehensive institutional frameworks to demonstrate that global supply chains are affected by institutionally mediated incentives and constraints. This approach is applied for the first time, to the best of my knowledge, to dragon fruit supply chains in Viet Nam. Second, by combining sociological and historical institutionalism, and employing this for analysis against a backdrop of the institutional dimension of global value chains, this thesis contributes new knowledge to global value chain studies. Furthermore, on a practical level, this research adds to a burgeoning body of literature that suggests that, for development projects to have the best chance of success, they must be carefully tailored to the specific context, taking into consideration local particularities.

Private food standards are an increasingly important regulatory mechanism in the agri-food system. Driven by quality demands of consumers, high profile food scares, changes to the legislative requirements of retailers and increasing risk in global supply chains, retailers are frequently involved in the development of private food standards, and their enforcement along supply chains. This new role for retailers as de facto gate keepers for quality and production processes points to an increase in power of this group.

Regulation theory provides a useful perspective from which to contextualise the economic and regulatory changes that have created an environment in which retailers have both the incentive, and the ability, to impose their requirements throughout the supply chain. This theory suggests that the neo-liberal agendas pursued by many developed nations have not led to a deregulation of production but have created space for re -regulation which has been taken up by global organisations attempting to remain profitable and grow in a highly competitive operating environment. While there is a great deal of enquiry regarding the limitations and opportunities these private standards create for marginal farmers, little has been revealed about the ways in which those producers based in developed countries have been affected. The actor approach provides a framework for the consideration of producers, empowering them and positing that they are not passive recipients of the changes occurring around them.

This thesis examines how the development of GlobalGAP, a private food standard developed by a consortium of many of Europe's largest retailing chains, shaped the production relations of an Australian Citrus producers cooperative. The hypothesis at the heart of this study is that while GlobalGAP may be evidence for a strengthening of the market power of retailers, as well as a mechanism through which retailers can reassert this market power to downstream supply chain actors, producers will have nuanced and varying responses. This suggests that although some producers may be unwilling or unable to certify to the standard, others will successfully negotiate GlobalGAP and incorporate its' requirements in standard business practice. Those that do may benefit from doing so through, for example, increased market access or more streamlined business practices.

Contract for work in international construction projects (Summary) The present master thesis analyses the contemporary practice in the field of making contracts for work in international construction projects. Its goal is to answer the following research question: is it possible to use the new Czech trust concept as a payment instrument under the most used FIDIC standard form of contract - Conditions of Contract for Construction First Edition 1999 (better known as "Red Book")? The thesis is divided into three chapters, each of them dealing with different aspects of the new trust concept: from construction projects through construction contracts for work to payment conditions. The opening part of Chapter One focuses on construction projects. It defines their characteristic features and describes the main types of their management, organization and contractual relationships. Next, the chapter discusses the international character of construction projects and concentrates on situations involving a conflict of laws. Party autonomy and the choice of law rule, that empowers parties to designate the applicable law to their contractual relationship, are assumed to be fundamental principles of contract formation in international construction projects. This part of the chapter is concluded by the proposition that...

A vast new world of transnational standards has emerged, covering issues from human rights to sustainability to food safety. This chapter develops a framework for making sense of this new global order. It is tempting to imagine that global rules can and should bypass corrupt, incapacitated, or illegitimate governments in poor and middle-income countries. This assumption must be rejected if we want to understand the consequences of global rules and the prospects for improvement. After showing how a combination of social movements, global production networks, and neoliberalism gave rise to transnational private regulation, the chapter builds the foundations for the comparative approach of this book. The book’s comparative analysis of land and labor in Indonesia and China sheds light on two key fields of transnational governance, their implications in democratic and authoritarian settings, and the problems of governing the global economy through private regulation.

Despite India’s three decades of economic liberalization, access to quality education, well-paying jobs, and high standards of living align with prior class and caste advantages, leaving many poor and working-class people stuck in place and obligated to seek handouts from the rich. The study draws on ten years of ethnographic fieldwork at three private golf clubs in Bangalore, India’s Silicon Valley, to explore the ties of dependence wealthy club members generate with the poor lower-caste golf caddies who carry their bags, and in a manner that reproduces their positions of privilege and authority. The caddies are not employees, and yet neither do they have complete control over their rates and schedules. Making $3–5 for a five- or six-hour round, caddies deploy acts servility and deference to yield additional money for healthcare, children’s school fees, and other household expenses. While a rare few caddies win sufficient support to put them and their families on a path of social mobility, most struggle to make ends meet, living in less-than-secure housing, going without food in some cases, and sending their children to low-quality schools that all but guarantee they will take up similar work as their fathers. The necessity but ultimate limitation of such relationships between the rich and poor underscores the failure of India’s development strategy, which favors private over public interests, and has yet to establish well-funded healthcare, education, and basic social services that would improve chances of social mobility and independence among the poor.

Setting macroeconomic policy is especially difficult in fragile states. Political legitimacy concerns are heightened, raising issues such as who the policymakers are, what incentives move them, and how the process of policymaking is likely to work under limited legitimacy and high uncertainty both about the macroeconomic environment and about policy effectiveness. In addition, fragility expands the range of policy objectives in ways that may constrain the attainment of standard macroeconomic objectives. Specifically, in the context of fragility policymakers also need to focus on measures to mitigate fragility itself—namely, they need to address issues such as regional and ethnic economic disparities, youth unemployment, and food price inflation. Socio-political developments around the world have thus pushed policymakers to broaden their toolkit to improve the effectiveness of macroeconomic management in the face of these constraints. The chapters in this book address these issues, both by giving an analytical context from which policymakers can build to answer the questions they face in fragile situations as well as by providing lessons drawn from empirical analyses and case studies. The first section of the volume discusses the interactions between political economy considerations and macroeconomic policymaking. The second section covers the private sector environment in fragile states. The third section focuses on macroeconomic policy, especially fiscal policy, monetary policy, exchange rate policy, external flows, and aid effectiveness. The last section explains the role of the IMF in fragile states and concludes by presenting case studies from the Middle East and from Sub-Saharan Africa. The contributors to the volume are economists and political scientists from academia as well as policymakers from international organizations and from countries affected by fragility.

ANSI/NCSL Z540.3-2006 and ISO/IEC 17025:2005 are voluntary consensus standards which prescribe requirements for the calibration of measuring and test equipment and for the technical competency of the performing laboratories. Many agencies in the U.S. which are part of, or regulated by, the Federal Government are required to use instruments which have been calibrated in accordance with one or both of these standards. The National Technology Transfer and Advancement Act (NTTAA) of 1995 compels all federal agencies to use technical standards that are developed by consensus standards bodies, in lieu of "government-unique" standards. ISO 17025 and ANSI Z540.3 have evolved over a half-century of metrological advancement, drawing upon expertise in the public and private sector. They are now supported by a mature infrastructure that facilitates mutual recognition and global trade, ensuring calibrations are accepted worldwide. However, some federal agencies and regulatory bodies in the U.S. have not yet adopted these standards. Calibrations are routinely performed on instruments, utilized in some government-regulated industries, which may not conform to these requirements. This paper discusses risks imparted to products and services produced in such environments. Particular focus is given to the Food and Drug Administration's (FDA) regulation of calibration requirements in the Quality System Regulation (QSR) found in Title 21 of the Code of Federal Regulations (CFR). Currently, a paucity of official guidance exists with respect to what constitutes an acceptable calibration program in medical device and pharmaceutical industries. Ambiguities persist due to lack of agreement upon voluntary consensus standards such as ISO 17025 and ANSI Z540.3. Fundamental requirements such as traceability, measurement uncertainty, measurement decision-rules, as well as basic metrological definitions are ill-defined in the CFR. The objective of this paper is to provide relevant background information and to encourage constructive dialogue between government agencies, standards writing committees, industry partners, and third party assessment/accreditation bodies. Cooperation of this type is consistent with public law and White House policy objectives. Ultimately, such dialogue may foster agreement on the use of these voluntary consensus standards for calibration in regulated industries, resulting in improved quality and reduced risk to consumers and patients.

"Contract catering industry is concerned with the production of ready-to-eat meals for schools, hospitals and private companies. The structure of this market is highly competitive, and customers are rarely willing to pay a high price for this catering service. A single production sites may be demanded up to 10.000 meals per day and these operations can hardly be managed via rule of thumbs without any quantitative decision support tool. This situation is common at several stages of a food supply chain and the methodologies presented in this paper are addressed to any food batch production system with similar complexity and trade-offs. This paper proposes an original KPI dashboard, designed to control costs, time and quality efficiency and helping managers to identify criticalities. Special emphasis is given on food safety control which is the management’s main concern and must be carefully monitored in each stage of the production. To calculate the value of KPIs a Montecarlo simulation approach is used to deal with production complexity and uncertainty. A case study showcases the potential of simulation in this complex industrial field. The case study illustrates an application of the methodology on an Italian company suffering local recipe contamination. The company aims at defining the best standard for production, identifying cycles being sustainable from an economic and environmental point of view."

Macroeconomic summary Several factors contributed to an increase in projected inflation on the forecast horizon, keeping it above the target rate. These included inflation in December that surpassed expectations (5.62%), indexation to higher inflation rates for various baskets in the consumer price index (CPI), a significant real increase in the legal minimum wage, persistent external and domestic inflationary supply shocks, and heightened exchange rate pressures. The CPI for foods was affected by the persistence of external and domestic supply shocks and was the most significant contributor to unexpectedly high inflation in the fourth quarter. Price adjustments for fuels and certain utilities can explain the acceleration in inflation for regulated items, which was more significant than anticipated. Prices in the CPI for goods excluding food and regulated items also rose more than expected. This was partly due to a smaller effect on prices from the national government’s VAT-free day than anticipated by the technical staff and more persistent external pressures, including via peso depreciation. By contrast, the CPI for services excluding food and regulated items accelerated less than expected, partly reflecting strong competition in the communications sector. This was the only major CPI basket for which prices increased below the target inflation rate. The technical staff revised its inflation forecast upward in response to certain external shocks (prices, costs, and depreciation) and domestic shocks (e.g., on meat products) that were stronger and more persistent than anticipated in the previous report. Observed inflation and a real increase in the legal minimum wage also exceeded expectations, which would boost inflation by affecting price indexation, labor costs, and inflation expectations. The technical staff now expects year-end headline inflation of 4.3% in 2022 and 3.4% in 2023; core inflation is projected to be 4.5% and 3.6%, respectively. These forecasts consider the lapse of certain price relief measures associated with the COVID-19 health emergency, which would contribute to temporarily keeping inflation above the target on the forecast horizon. It is important to note that these estimates continue to contain a significant degree of uncertainty, mainly related to the development of external and domestic supply shocks and their ultimate effects on prices. Other contributing factors include high price volatility and measurement uncertainty related to the extension of Colombia’s health emergency and tax relief measures (such as the VAT-free days) associated with the Social Investment Law (Ley de Inversión Social). The as-yet uncertain magnitude of the effects of a recent real increase in the legal minimum wage (that was high by historical standards) and high observed and expected inflation, are additional factors weighing on the overall uncertainty of the estimates in this report. The size of excess productive capacity remaining in the economy and the degree to which it is closing are also uncertain, as the evolution of the pandemic continues to represent a significant forecast risk. margin, could be less dynamic than expected. And the normalization of monetary policy in the United States could come more quickly than projected in this report, which could negatively affect international financing costs. Finally, there remains a significant degree of uncertainty related to the duration of supply chocks and the degree to which macroeconomic and political conditions could negatively affect the recovery in investment. The technical staff revised its GDP growth projection for 2022 from 4.7% to 4.3% (Graph 1.3). This revision accounts for the likelihood that a larger portion of the recent positive dynamic in private consumption would be transitory than previously expected. This estimate also contemplates less dynamic investment behavior than forecast in the previous report amid less favorable financial conditions and a highly uncertain investment environment. Third-quarter GDP growth (12.9%), which was similar to projections from the October report, and the fourth-quarter growth forecast (8.7%) reflect a positive consumption trend, which has been revised upward. This dynamic has been driven by both public and private spending. Investment growth, meanwhile, has been weaker than forecast. Available fourth-quarter data suggest that consumption spending for the period would have exceeded estimates from October, thanks to three consecutive months that included VAT-free days, a relatively low COVID-19 caseload, and mobility indicators similar to their pre-pandemic levels. By contrast, the most recently available figures on new housing developments and machinery and equipment imports suggest that investment, while continuing to rise, is growing at a slower rate than anticipated in the previous report. The trade deficit is expected to have widened, as imports would have grown at a high level and outpaced exports. Given the above, the technical staff now expects fourth-quarter economic growth of 8.7%, with overall growth for 2021 of 9.9%. Several factors should continue to contribute to output recovery in 2022, though some of these may be less significant than previously forecast. International financial conditions are expected to be less favorable, though external demand should continue to recover and terms of trade continue to increase amid higher projected oil prices. Lower unemployment rates and subsequent positive effects on household income, despite increased inflation, would also boost output recovery, as would progress in the national vaccination campaign. The technical staff expects that the conditions that have favored recent high levels of consumption would be, in large part, transitory. Consumption spending is expected to grow at a slower rate in 2022. Gross fixed capital formation (GFCF) would continue to recover, approaching its pre-pandemic level, though at a slower rate than anticipated in the previous report. This would be due to lower observed GFCF levels and the potential impact of political and fiscal uncertainty. Meanwhile, the policy interest rate would be less expansionary as the process of monetary policy normalization continues. Given the above, growth in 2022 is forecast to decelerate to 4.3% (previously 4.7%). In 2023, that figure (3.1%) is projected to converge to levels closer to the potential growth rate. In this case, excess productive capacity would be expected to tighten at a similar rate as projected in the previous report. The trade deficit would tighten more than previously projected on the forecast horizon, due to expectations of an improved export dynamic and moderation in imports. The growth forecast for 2022 considers a low basis of comparison from the first half of 2021. However, there remain significant downside risks to this forecast. The current projection does not, for example, account for any additional effects on economic activity resulting from further waves of COVID-19. High private consumption levels, which have already surpassed pre-pandemic levels by a large margin, could be less dynamic than expected. And the normalization of monetary policy in the United States could come more quickly than projected in this report, which could negatively affect international financing costs. Finally, there remains a significant degree of uncertainty related to the duration of supply chocks and the degree to which macroeconomic and political conditions could negatively affect the recovery in investment. External demand for Colombian goods and services should continue to recover amid significant global inflation pressures, high oil prices, and less favorable international financial conditions than those estimated in October. Economic activity among Colombia’s major trade partners recovered in 2021 amid countries reopening and ample international liquidity. However, that growth has been somewhat restricted by global supply chain disruptions and new outbreaks of COVID-19. The technical staff has revised its growth forecast for Colombia’s main trade partners from 6.3% to 6.9% for 2021, and from 3.4% to 3.3% for 2022; trade partner economies are expected to grow 2.6% in 2023. Colombia’s annual terms of trade increased in 2021, largely on higher oil, coffee, and coal prices. This improvement came despite increased prices for goods and services imports. The expected oil price trajectory has been revised upward, partly to supply restrictions and lagging investment in the sector that would offset reduced growth forecasts in some major economies. Elevated freight and raw materials costs and supply chain disruptions continue to affect global goods production, and have led to increases in global prices. Coupled with the recovery in global demand, this has put upward pressure on external inflation. Several emerging market economies have continued to normalize monetary policy in this context. Meanwhile, in the United States, the Federal Reserve has anticipated an end to its asset buying program. U.S. inflation in December (7.0%) was again surprisingly high and market average inflation forecasts for 2022 have increased. The Fed is expected to increase its policy rate during the first quarter of 2022, with quarterly increases anticipated over the rest of the year. For its part, Colombia’s sovereign risk premium has increased and is forecast to remain on a higher path, to levels above the 15-year-average, on the forecast horizon. This would be partly due to the effects of a less expansionary monetary policy in the United States and the accumulation of macroeconomic imbalances in Colombia. Given the above, international financial conditions are projected to be less favorable than anticipated in the October report. The increase in Colombia’s external financing costs could be more significant if upward pressures on inflation in the United States persist and monetary policy is normalized more quickly than contemplated in this report. As detailed in Section 2.3, uncertainty surrounding international financial conditions continues to be unusually high. Along with other considerations, recent concerns over the potential effects of new COVID-19 variants, the persistence of global supply chain disruptions, energy crises in certain countries, growing geopolitical tensions, and a more significant deceleration in China are all factors underlying this uncertainty. The changing macroeconomic environment toward greater inflation and unanchoring risks on inflation expectations imply a reduction in the space available for monetary policy stimulus. Recovery in domestic demand and a reduction in excess productive capacity have come in line with the technical staff’s expectations from the October report. Some upside risks to inflation have materialized, while medium-term inflation expectations have increased and are above the 3% target. Monetary policy remains expansionary. Significant global inflationary pressures and the unexpected increase in the CPI in December point to more persistent effects from recent supply shocks. Core inflation is trending upward, but remains below the 3% target. Headline and core inflation projections have increased on the forecast horizon and are above the target rate through the end of 2023. Meanwhile, the expected dynamism of domestic demand would be in line with low levels of excess productive capacity. An accumulation of macroeconomic imbalances in Colombia and the increased likelihood of a faster normalization of monetary policy in the United States would put upward pressure on sovereign risk perceptions in a more persistent manner, with implications for the exchange rate and the natural rate of interest. Persistent disruptions to international supply chains, a high real increase in the legal minimum wage, and the indexation of various baskets in the CPI to higher inflation rates could affect price expectations and push inflation above the target more persistently. These factors suggest that the space to maintain monetary stimulus has continued to diminish, though monetary policy remains expansionary. 1.2 Monetary policy decision Banco de la República’s board of directors (BDBR) in its meetings in December 2021 and January 2022 voted to continue normalizing monetary policy. The BDBR voted by a majority in these two meetings to increase the benchmark interest rate by 50 and 100 basis points, respectively, bringing the policy rate to 4.0%.