Voluntary Sustainability Standards, Forest Conservation, and Environmental Provisions in International Trade Policy

Deforestation rates are slowing, but they are not slowing fast enough. Public and private sectors alike are increasingly engaging with international trade measures to help preserve these vital ecosystems.

By Cristina Larrea, Florencia Sarmiento, Vivek Voora, on October 28, 2021

This policy brief presents the main issues examined in our webinar on reducing deforestation through international trade policy on March 24, 2021.

Forests are essential—they provide us with clean oxygen and fertile soils, they contain most of the world’s terrestrial biodiversity, and they help mitigate climate change by absorbing carbon dioxide. Moreover, they provide millions of people with livelihoods.

Public and private sectors alike are increasingly engaging with international trade policy and other measures to help preserve these vital ecosystems. This includes the use of voluntary sustainability standards (VSSs) and forest conservation provisions in free trade agreements.

These two approaches are increasingly being integrated, with VSSs used in international trade policy to promote more sustainable production and consumption practices. Some novel approaches are moving toward mandatory sustainability requirements and/or regulatory distinction at the border for VSS-compliant products.

The inclusion of VSSs in international trade agreements is a positive trend that demonstrates the potential for further development and integration. However, we need to strengthen the scope and capacity of VSSs to achieve environmental goals such as preventing deforestation.

This process could include ensuring that VSSs provide stringent criteria to reduce deforestation, offer supporting services to farmers to implement compliant practices, and reinforce the effectiveness of assurance systems to guarantee that farming practices comply with these criteria.

From a WTO perspective, a fundamental and open question would be how the standard-setting process—particularly the standard’s design—could be “transparent, inclusive and non-discriminatory.”