Integrating Voluntary Sustainability Standards in trade policy: The case of the European Union's GSP scheme

Abstract

Trade policy is increasingly being used as a policy instrument to pursue non-trade objectives such as environmental protection or the protection of labour rights. A key example is the European Union's Generalised Scheme of Preferences (GSP). The current approach is being confronted with significant challenges. How these challenges can be addressed is currently subject to debate, and increased attention is turning to the role that private governance mechanisms can play in this context. This paper will look into the potential role that Voluntary Sustainability Standards (VSS) can play. The paper will analyse and assess the complementarity between VSS and EU GSP, and it contributes to the literature on interactions between private and public policy-making for sustainability. The main research question focuses on what role VSS can play in the European Union's GSP scheme. To answer the question, the paper develops two models by which VSS can be integrated in EU GSP (a mandatory and a voluntary approach). The study is based on interviews with key experts from different stakeholder groups and an analysis of the ITC standards map database. The paper shows that the integration of VSS in EU GSP, as outlined in the two models, is confronted with several challenges. These challenges are discussed, and alternatives are explored.