Handbook on Negotiating Sustainability Development Provisions in Free Trade Agreements

The Project at A Glance

Over the past few years, there has been a proliferation of regional trade agreements (RTAs) across the world, including in the Asia-Pacific region. The region has experienced considerable export-oriented development, with economic growth successfully alleviating poverty. However, trade-driven economic growth can also be unbalanced. For instance, trade liberalisation can widen inequality gaps and may have a negative impact on the environment. Academic literature confirms that increases in trade liberalisation may lead to higher levels of CO2 emissions.
The objective of the assignment was to produce a handbook that provides guidance on how to negotiate sustainability development and cooperation provisions in trade agreements with the aim of assisting developing countries to foster the benefits that such agreements offer in terms of sustainable and inclusive development, through further economic and social development, improved market access and further development of productive and supply capacity.
The project also aimed to increase the capacity of governments and trade negotiators in the Asia Pacific Region, enhance the contribution of PTAs to inclusive development; and increase the capacity of governments to expand South-South trade through preferential trade policies and agreements.

What We Found

The concept of sustainable development emerged from the field of environmental sciences as a way to bring together the spheres of human development and environmental sustainability. The term “sustainable development” is defined widely understood as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Commission).
In the Asian continent, export-oriented strategies are closely correlated with reductions in poverty rates. It is estimated that the number of people living in extreme poverty has reduced significantly. Between 1981 and 2013, the poverty headcount in East Asia and the Pacific region declined from over 80% to 3.68% of the population. In just a decade, extreme poverty in the Asia-Pacific region dropped from 29.7% in the early 2000s to 10.3% in the early 2010s. Despite such progress, some 400 million people in the region still live in extreme poverty. However, inequality within the region remains high. The benefits of trade-driven economic growth can thus be unevenly distributed. As such, flanking measures and adaptation policies are required to ensure that the economy can leverage the benefits that trade offers.
Despite the fact that trade is not the ultimate solution to sustainable development, it can also contribute to greater societal and environmental benefits. Trade can also be a means to achieving the United Nations Sustainable Development Goals. While there is no trade-specific SDG, there are nonetheless several trade indicators linked to SDG 17 (Partnerships for the Goals). The sub-targets (17.10, 17.11 and 17.12) include mentions of trade-related objectives including the promotion of the rules-based multilateral trading system or the implementation of duty-free and quota-free (DFQF) market access for all least developed countries (LDCs), among others.

Our Strategy and Impact

The target beneficiaries are government officials and trade negotiators from developing countries in Asia and the Pacific in particular. The Handbook can also prove beneficial to those in other developing countries around the world, as well as to the wider policymaking community. The Handbook highlights a few important considerations for the negotiation of sustainable provisions in FTAs including:

the need to better articulate trade and investment policies
the need to improve the preparation of trade negotiations
the need to strengthen the participation of individual countries and strengthen the coordination and coherence of the group of countries engaged in negotiations, and
the need to improve the monitoring of the implementation of commitments to ensure that the agreements will deliver results which correspond to the core principles of the sustainable development

Our Core Solutions

Understanding the sustainability provisions in FTAs is important for businesses as they seek to import or export from certain markets. At IEC, we provide our clients with a detailed analysis of the key impacts of new trade agreements on their operations and competitiveness through an assessment of tariff, and non-tariff tariff barriers, provisions on rules of origin, customs efficiency, the effectiveness of transport networks, and sustainability provisions, among others. We can help assess the opportunities in different markets, determine the feasibility and viability of projects, and benchmark the wider ecosystem to support business growth.