Is It Just About Sustainability? Politics at Home and the Trade Impacts of Voluntary Standards Abroad

Voluntary sustainability standards (VSS) can promote environmental and socioeconomic benefits, yet critics contend they can also create trade barriers. While prior research reports mixed to positive effects on Global South exports, our study examines whether domestic political dynamics and public-private interactions significantly explain these outcomes. We investigate Bonsucro certification for Brazilian sugar and ethanol exports to the European Union. Bonsucro verifies that exports meet EU biofuels regulations and additional EU criteria. Should influential European interests drive these criteria to be overly stringent, Brazilian exports could suffer. Through qualitative analysis, we show that import-competing interests do not solely account for EU meta-regulation of VSS. Our staggered difference-in-differences analysis reveals that Bonsucro certification correlates with increased Brazilian exports to the EU, although its benefits are mainly concentrated among the largest exporters, contributing to market concentration. These findings have broad implications for debates on hybrid governance and the legitimacy of VSS as environmental policy instruments.