Integrating Voluntary Sustainability Standards in Trade Agreements: Charting a path for sustainable trade

Before 2018, only 17 free trade agreements (FTAs) had referenced voluntary sustainability standards (VSSs). By 2023, that figure had more than doubled. What is driving this trend? Will it lead to more sustainable trade?

IISD and ISEAL hosted a webinar for different actors engaged in trade policy to learn about the ways that VSSs have been integrated into trade policy to advance sustainability. Focusing on the specific example of FTAs, IISD experts presented recent research and discussed with panellists why more and more FTAs are referencing VSSs and how this integration has played out in practice.

Speakers

  • Mario Abreu, Head of Corporate Social Responsibility and Sustainability, Ferrero
  • Steffany Bermúdez, Policy Advisor, IISD
  • Manuel Chacón, Director of Commercial Relations, Ministry of Commerce, Industry and Tourism, Colombia
  • Dominik Ledergerber, Advisor, Free Trade Agreements/European Free Trade Association (EFTA) Division, Switzerland’s State Secretariat for Economic Affairs (SECO)
  • Seul Lee, Associate Economic Affairs Officer, UN Trade and Development (UNCTAD)
  • Lauro Locks, Counsellor, Trade and Environment Division, World Trade Organization (WTO)
  • Cameron Plese, Head of Government Affairs (North America and Europe), Roundtable on Sustainable Palm Oil (RSPO)
  • Florencia Sarmiento, Policy Advisor, IISD
  • Alice Tipping, Director, Trade and Sustainable Development, IISD
  • Joshua Wickerham, Manager, Outreach and Engagement, ISEAL

Key Takeaways

Governments are actively supporting certification to meet market demands, enhancing sustainability practices through targeted initiatives and direct support.
The incorporation of VSSs into FTAs highlights the increasing importance of standards in ensuring sustainable production and market access, despite challenges in enforcement and implementation.

Historically, VSSs have been developed by the private sector in the absence of government regulation to drive sustainability. In the context of increased policies and regulations to advance sustainability, VSSs have evolved from addressing regulatory gaps to becoming tools for compliance with emerging regulations.

In the jurisdictions that still lack these policies and regulations, VSSs may continue to help addressing this gap.

There was a strong emphasis on the importance of credibility of VSSs and the practicality of their implementation, highlighting the need to use recognized VSSs as evidence of compliance.

It is crucial to prioritize the needs of producers and communities in implementing sustainability initiatives to achieve meaningful impacts.

At the WTO, the discussion on standards is taking place within the Technical Barriers to Trade (TBT) Committee, where governments following transparency requirements under the agreement need to notify provisions related to standards. Moreover, governments are proposing the agenda for the next three years of work. Proposals include a focus on traceability systems in certification to support sustainable agriculture and collaboration across WTO committees in particular regarding sustainability specifications for green procurement.

At UNFSS, there is a strong focus on collaboration and the need to bring the different actors involved. UNFSS supports national multistakeholder platforms in countries like India, China, and Indonesia involving the private sector, government bodies, and VSSs. UNFSS also provides a platform for international dialogues bringing together diverse stakeholders for effective information exchange and cooperation.