Ensuring Sustainability through Trade Agreements

On 29 March, ICTSD, with the support of the German Development Cooperation, organised a dialogue on “Ensuring Sustainability through Trade Agreements” under the RTA Exchange dialogue series aimed at systematically exploring possibilities for convergence and coherence-building between regional trade agreements (RTAs) and the multilateral trade system. The RTA Exchange initiative is jointly implemented by ICTSD and the Inter-American Development Bank (IDB).

Since the early 90’s and the negotiation of the North American Free Trade Agreement (NAFTA), several bilateral or regional trade agreements have incorporated explicit provisions related to sustainable development, ranging from specific conditionalities in unilateral preference schemes (e.g EU GSP +), to more comprehensive approaches in the context of reciprocal free trade agreements. Over time, as different models and practices emerged, such provisions have evolved and become more sophisticated in their scope and their approach.

Today, RTAs include a wide variety of provisions going from innovative cooperation mechanisms; through provisions to address conflicts at the intersection of trade and sustainable development; to measures promoting compliance with international or domestic environmental and labour laws; or regulatory commitments to advance social or environmental objectives. In addition to providing enforceable disciplines that advanced sustainable development, these bilateral and regional agreements also acted as fertile ground for innovation and cooperation.

Such developments contrast with the limited progress observed at the World Trade Organization (WTO) where most evolutions occurred through jurisprudence as opposed to new commitments or disciplines. As the international community moves towards the implementation of the newly agreed Sustainable Development Goals (SDGs), the treatment of sustainability concerns in bilateral and regional arrangements provides essential precedents and practical experiences from which lessons or best practices can be drawn to inform developments at the multilateral level, be it at the WTO or in other international arena.

The objective of this dialogue is to look at the experience of modern/deep integration RTAs in addressing sustainability concerns (e.g. through environmental and labor provisions) and what lessons can be drawn for the multilateral trade system, considering how different approaches could be multilateralised, or — more realistically — adapted to advance a multilateral discussion, highlighting opportunities and possible stumbling blocks.

The dialogue opened with an overview of how sustainability concerns, including environmental and social concerns, have been addressed in modern RTAs, and reviewed the treatment of sustainability provisions under different approaches or families of agreements. The afternoon sessions considered the challenges and benefits resulting from the implementation of sustainability provisions in RTAs from a variety of sectoral perspectives, and explored prospects at the multilateral level to advance a constructive discussion on sustainability drawing from the experience of RTAs and suggesting possible ways forward.