Unilateral regulations, exemplified by the EU Deforestation Regulation (EUDR), contribute to international trade policy addressing deforestation through sustainability standards. These regulations require importers to prove that commodities such as soya, beef, palm oil, and timber are not linked to deforestation. While they aim to address climate change and conserve biodiversity, they generate debates about fairness, hurdles, and repercussions for global trade. Developing countries often view these measures as burdensome and illegitimate, given their capacity to restrict market access. Many exporters face institutional and technological limitations, compounded by regulatory fragmentation when unilateral rules overlap or contradict bilateral or regional trade agreements.
Producers in developing countries bear the compliance costs, especially smallholders lacking the capacity to meet traceability and due diligence standards. This dynamic marginalises them within the global agricultural supply chain and exacerbates equity concerns. Moreover, stringent regulations in certain markets can prompt trade diversion, as exporters redirect goods to destinations with weaker environmental requirements, thereby undermining deforestation reduction efforts.
To address these issues, we propose policies prioritising multilateral cooperation. First, consultation under World Trade Organization (WTO) frameworks would ensure pre-regulation transparency, allowing exporting countries to shape more balanced rules. Second, shared data platforms and standardised traceability systems, supported by satellite-based monitoring and chain-of-custody tools, could harmonise certification processes, diminish redundancy, and reinforce the credibility of sustainability claims. Third, a dedicated international financial facility for sustainable land use could offer concessional credit, risk guarantees, and technical assistance to smallholders, fostering inclusive development while incentivising deforestation reduction. Fourth, stronger enforcement by integrating environmental provisions into preferential trade agreements (PTAs), backed by consistent dispute-resolution mechanisms aligned with WTO standards, could enhance accountability and reduce fragmentation.
By combining these measures, policymakers could better align trade and environmental objectives, fostering climate action and biodiversity conservation alongside economic development. Additionally, the conciliatory role of international organisations should be strengthened to promote policy coherence, resource-sharing, and broader stakeholder engagement. Success depends on robust institutional frameworks, stakeholder participation, and political commitment. Periodic monitoring and evaluation will be crucial to refine these approaches and ensure they effectively address the multi-layered challenges of deforestation in global trade.
