Reducing Deforestation and Enhancing Forest Conservation Through International Trade Policy

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This webinar explored ways to reduce deforestation and enhance forest conservation through international trade policy, with a focus on the cocoa, palm oil, soybean, and timber sectors. It took place on March 24, 2021, at 10 a.m. EST / 3 p.m. CET.

Topics discussed:

• The characteristics, effectiveness, and scalability of voluntary sustainability standards (VSSs) as tools for reducing deforestation and enhancing forest conservation.
• Novel and existing approaches included in international trade agreements to reduce deforestation and conserve forests.
• Potential synergies between measures embedded in international trade agreements and VSSs for tackling deforestation and enhancing forest conservation at a large scale in forest-risk commodity sectors.

Moderator:

• Nathalie Bernasconi-Osterwalder, Executive Director, IISD Europe, and Senior Director, Economic Law and Policy, IISD

Speakers: 

• Verina Ingram, Assistant Professor, Forest and Nature Conservation Policy Group, and Senior Researcher, Wageningen Economic Research
• Mary Kinyua, Board Chair, Fairtrade Africa, and Director of Administration and Human Resources, Oserian Development Company
• Soledad Leal Campos, Lead, Sustainable Trade, IISD
• Joanna Nowakowska, Deputy Director of Technology and Information Unit, FSC International
• Charlotte Sieber-Gasser, Senior Researcher and Lecturer, University of Lucerne
• Vivek Voora, Sustainability Standards Advisor, IISD

Questions and answers:

The audience asked the panelists several questions that could not be answered within the session’s allotted time. The panelists have responded to some of these questions below. More will be coming soon.

What are the unintended consequences of embedding VSSs into international trade agreements when it is usually the more wealthy producers that can join these agreements?

This is an important issue to consider as small-scale farmers and SMEs may experience difficulties getting certified and maintaining the certification. There are, however, different measures that can be established to mitigate/minimize these potential discriminatory effects. These include conducting ex-ante impact assessments prior to the signature of the agreement to identify actions that enable small-scale producers and SMEs to comply with VSSs and access markets (such as capacity building and financial support). The use of new technology by VSSs can also reduce audit and certification costs and make certification more accessible. The technological progress that FSC and other VSSs are making in that regard is promising.

Read more about this topic in our article on VSSs, procurement and trade policy.

In terms of setting the standards, how do we incorporate the views of consumers and producers?  What kind of evidence should be used as a basis for standards?

Each VSS has its own policy for incorporating producers’ views during the establishment of the standard. Benchmarking exercises have also been carried out to inform how VSSs are incorporating producers’ views. For more information, see:

• The Sustainability Standards Comparison Tool,
• IISD’s State of Sustainability Review 2010: Sustainability and Transparency,
• ITC’ Standards Map.

With regards to the incorporation of consumers’ views, some VSSs open the revision/update of their standard to public consultation, which is conducted in several phases. Recent examples include the Rainforest Alliance’s consultations before launching its revised standard in 2020, and what Global G.A.P. is currently doing.

“Many of these provisions about VSSs in RTAs are rather hortatory (for example, in the EFTA-Indonesia Art. 8.10: “the parties commit to support the dissemination and use of sustainability standards, practices and guidelines for sustainably produced vegetable oils”). Is there any indication on how they are being implemented by the parties?”

The EFTA-Indonesia CEPA is still in its early days (it was approved by Switzerland in a referendum held in March 2021). For this reason, we could not talk about implementation experiences yet. Nevertheless, it is worth noting that, for instance, through its Cooperation Programme and the Sustainable Trade Initiative (IDH), Switzerland supports the Indonesian Government in “promoting greater sustainability” in palm oil production. According to SECO, “IDH is active in six provinces to promote sustainable economic development at the regional level. This with a focus on sustainable production, forest conservation and social inclusion of indigenous populations. Direct beneficiaries are especially smallholder oil palm farmers and their families, who are trained in better and more sustainable production methods.”

“How do the trade agreement provisions relate to potential consumer country mandatory due diligence requirements?”

This question touches upon very relevant policy issues currently under discussion in several countries. Examples of this include the European Commission’s 2021 work plan and the European Green Deal, as well as the consultation held in the UK on the “introduction of due diligence on forest risk commodities.” Some trade observers consider that these developments will lead to the introduction of more sustainability clauses in the negotiation of future trade agreements. A more fundamental question would be how such requirements would interact with existing trade agreements.

Referenced resources:

• Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Stepping up EU Action to Protect and Restore the World’s Forests. 
• FAO (2020). Global Forest Resources Assessment 2020. (FRA 2020).
• FAO and UNEP (2020). The State of the World’s Forests 2020. Forests, biodiversity and people. Rome. 
• Ingram, V., Behagel, J., Mammadova, A., Verschuur, X. (2020). Summary Discussion Paper. The outcomes of deforestation-free commodity value chain approaches. Forest and Nature Conservation Policy Group, Wageningen University and Research. Wageningen. The Netherlands.
• Round Table for Responsible Soy. RTRS Soy. Website resource. 
• Sieber-Gassier, C. (2021) Is the Future of Preferential Trade in Sustainable Production Only? Blog article from the Trade Experettes.