Will the Inclusion of Voluntary Standards in Trade Agreements Lead to More Sustainable Trade?

This report by the International Institute for Sustainable Development (IISD) examines the increasing integration of voluntary sustainability standards (VSSs) into free trade agreements (FTAs). It analyzes the growth, types, and potential benefits of these references, while highlighting critical challenges regarding enforcement, terminology, and the risk of creating trade barriers for small-scale producers.

• The inclusion of voluntary sustainability standards (VSSs) in free trade agreements (FTAs) has grown significantly over the last five years. While only 17 FTAs referred to VSSs before 2018, 29 out of 61 agreements concluded between 2018 and 2023 included such references, peaking at 60% of analyzed treaties in 2018.
• VSSs are referenced in FTAs through five primary rationales: cooperation (exchanging information), promotion (facilitating trade in certified goods), recognition (acknowledging their contribution to environmental protection), guidelines (encouraging the private sector to develop credible mechanisms), and support (using VSSs to implement the agreement).
• The EFTA–Indonesia CEPA represents an innovative use of VSSs by linking them to preferential tariff treatment. Specifically, Switzerland's domestic legislation requires that Indonesian palm oil and derivatives comply with the RSPO, ISCC Plus, or POIG standards to receive these tariffs.
• Several challenges hinder the effectiveness of VSSs in trade policy, including ambiguous terminology (with up to 37 variations used), a lack of enforceable requirements, and the risk that VSSs become 'de facto' market access barriers for small and medium-sized enterprises in developing countries.
• Integrating VSSs into FTAs offers three main benefits: they act as complementary tools to reinforce public regulations and identify sustainability targets; they drive innovative trade policy (such as binding sustainability preferences); and they foster cooperation between policy-makers and VSS organizations to improve system design and credibility.
• The report concludes that while the trend of including VSSs in FTAs is promising, the actual impact on sustainable trade remains uncertain. Further analysis is needed to determine how these provisions are implemented in practice and their concrete effects on the ground.

APA

Bermúdez, S., & Sarmiento, F. (2024). Will the Inclusion of Voluntary Standards in Trade Agreements Lead to More Sustainable Trade? International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-04/ssi-voluntary-standards-agreements-sustainable-trade.pdf

Chicago

Bermúdez, Steffany, and Florencia Sarmiento. Will the Inclusion of Voluntary Standards in Trade Agreements Lead to More Sustainable Trade? International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-04/ssi-voluntary-standards-agreements-sustainable-trade.pdf.

Wikipedia

{{cite report |last1=Bermúdez |first1=Steffany |last2=Sarmiento |first2=Florencia |title=Will the Inclusion of Voluntary Standards in Trade Agreements Lead to More Sustainable Trade? |publisher=International Institute for Sustainable Development |date=April 2024 |url=https://www.iisd.org/system/files/2024-04/ssi-voluntary-standards-agreements-sustainable-trade.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bermdez2024will, author = {Bermúdez, Steffany and Sarmiento, Florencia}, title = {{Will the Inclusion of Voluntary Standards in Trade Agreements Lead to More Sustainable Trade?}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = apr, url = {https://www.iisd.org/system/files/2024-04/ssi-voluntary-standards-agreements-sustainable-trade.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }