How can circular economy principles improve international trade and development?

2 Trade and innovation

Another benefit of circular economy principles is that they can stimulate innovation and competitiveness in the global market. By encouraging the development and diffusion of new technologies, business models, and standards, circular economy principles can foster creativity and collaboration among different actors in the value chain. For example, digital platforms, blockchain, and smart contracts can facilitate the tracking and sharing of information and materials across borders. Moreover, circular economy principles can create incentives for quality, durability, and functionality, rather than quantity and obsolescence, of goods and services.

3 Trade and development

A third benefit of circular economy principles is that they can support the development goals and needs of different countries and regions. By enhancing the productivity and value of local resources, circular economy principles can reduce poverty, inequality, and vulnerability. For instance, circular agriculture, such as agroforestry, composting, and organic farming, can improve food security, soil health, and biodiversity. Furthermore, circular economy principles can promote social inclusion, empowerment, and education, by involving local communities, women, and youth in the circular activities.

4 Trade and cooperation

However, circular economy principles also pose some challenges and require some adjustments for the international trade system. For example, circular economy principles may affect the comparative advantage and trade patterns of different countries, depending on their resource endowments, technological capabilities, and institutional frameworks. Moreover, circular economy principles may raise some trade-related issues, such as technical barriers, intellectual property rights, and environmental standards, that need to be addressed through dialogue and coordination among different stakeholders.

5 Trade and governance

Therefore, circular economy principles call for a more holistic and coherent approach to trade and governance, that takes into account the environmental, social, and economic dimensions of development. This means that trade policies and agreements should be aligned with the circular economy objectives and principles, and support the transition to a low-carbon, resource-efficient, and inclusive economy. For example, trade policies and agreements could include provisions on environmental goods and services, circular public procurement, eco-labelling, and dispute settlement.

6 Trade and learning

Finally, circular economy principles offer a valuable opportunity for learning and exchange among different countries and regions. By sharing best practices, experiences, and challenges, countries and regions can learn from each other and foster mutual understanding and trust. Moreover, by engaging in multilateral platforms, networks, and partnerships, countries and regions can collaborate and cooperate on common issues and goals related to circular economy. For example, the EU and China have established a bilateral dialogue on circular economy, and the UN has launched a global initiative on circular economy and resource efficiency.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?