South-South Trade and Voluntary Sustainability Standards

Challenges and opportunities

This report explores how voluntary sustainability standards (VSSs) are being used in trade policy to increase the trade of more sustainable products between developing countries. This can lead to improved well-being and prosperity for farmers and promote trade relationships that protect the environment.

By Steffany Bermúdez, Florencia Sarmiento on September 13, 2023

Trade between developing countries and regions—known as “South–South trade”—is growing rapidly. In the past couple of decades, its value has grown almost tenfold, from USD 600 billion in 1995 to USD 5.3 trillion in 2021.

To achieve stable and sustainable growth that benefits small-scale producers, communities, and the environment, these countries need to adopt trade policies that support positive social and environmental practices and improve market access opportunities for small-scale producers and small and medium-sized enterprises.

Voluntary sustainability standards (VSSs) can be used as a tool to support these efforts. This report outlines five examples of developing country governments and regional blocs in the Global South that are integrating VSSs in trade policy to promote trade that supports more sustainable production practices while also addressing some of the concerns associated with their adoption.

These examples include:

  • a Memorandum of Understanding seeking to boost the trade of organic certified products between Chile and Brazil,
  • the development of a recognition system for VSSs across the African continent,
  • the inclusion of a VSS in national legislation as a minimum requirement for producing and trading crops in Southern Africa, and
  • the development of regional organic standards in East Africa and the Pacific alongside local assurance systems that make it easier for farmers to participate in the schemes.

The report finds that integrating VSSs in South–South trade policies can help reduce some barriers to trade for smallholders and small and medium-sized enterprises, encourage trust and recognition in VSSs, lower the costs of compliance, increase demand for VSS-compliant products, and promote harmonization between different standards.

It also includes recommendations on how to unlock VSSs’ potential to increase and promote more sustainable practices and enhance market access for small-scale producers and medium-sized enterprises through trade policy.