Private Sustainability Standards and the WTO. A Case Study from Switzerland

Private sustainability standards enable producers, manufacturers and retailers to set credible signals for their products’ sustainability features and allow consumers to allocate their expenses according to their sustainability preferences. But their effects are not always beneficial. While some schemes assess the full range of sustainability impacts throughout the certified products’ lifecycle, the majority of private sustainability standards focuses on a limited range of aspects – risking to provide an uncomprehensive picture of products’ sustainability impact. This lack of transparency seems to affect – in some cases even turn into the negative – standards’ contribution to their stated sustainability goals. In addition, the lack of technical and financial assistance and the great variation and intersection between schemes reportedly impacts market access to the detriment and limits standards’ contribution to sustainability objectives through indirect channels. Subjecting private sustainability standards to rules based on the principles of the Agreement on Technical Barriers to Trade would strengthen their contribution to sustainable development both through direct and indirect channels. In addition, strengthened provisions on technical assistance and cost-sharing arrangements between supply-chain actors could increase small-holders’ participation and enable more informed consumer choices. However, multilateral agreement on rules applicable to private standards is not in sight. Given the urgent need to regulate private sustainability standards, Members shall step up their efforts – first on the domestic level. The case study on Switzerland-based private sustainability standards indicates that trade-restrictive domestic (and regional) standard landscapes, as well as Members’ involvement in their development and implementation, pose major obstacles to successful negotiations. Acknowledging that trade-restrictive private standards induced by Members are already subject to WTO rules could be an important step towards an ambitious agreement with broad participation. In itself, it will not solve the regulatory challenges ahead. However, it could shift Members’ focus from attempts to excuse trade-restrictive private standards – whether or not they conflict with their internal laws – towards regulation

Switzerland-based private sustainability standards and WTO law

This report examines the applicability of World Trade Organization (WTO) rules to Switzerland-based private sustainability standards and provides recommendations for a Swiss negotiating position on green labelling