Advancing circular trade: Next steps for the EU and its trade partners

The circular economy involves a major paradigm shift, with economies transitioning away from a take-make-waste model to a sustainable model. In order to facilitate a just transition to a global circular economy the EU must seek to cooperate with its trade partners.

A recent event co-hosted by IEEP, the Finnish Innovation Fund Sitra and the Ellen MacArthur Foundation to enhance the understanding of how trade policy can support the international transition to a circular economy.

Domestically, the EU’s shift to circularity will play out at many levels and is strongly supported by the EU’s Sustainable Product Initiative, which will be developed in detail in the coming years. Internationally, the EU is also promoting international cooperation in its external affairs and among like-minded countries in the Global Alliance for Circular Economy and Resource Efficiency (GACERE). In a linked global economy – reeling from the shocks of the COVID pandemic and Russia’s war in Ukraine – promoting circularity in trade policy and among trade partners can help enhance resilience.

Indeed, to address the climate crisis and ensure a just and resilient transition to a circular economy the EU must also focus on the required paradigm shift – moving from downstream end-of-life waste issues and management to upstream waste prevention, from the product design phase and throughout the value chains – as well as securing a sustainable supply of critical raw materials, by embedding concepts such as transparency, circularity and resource efficiency and associated technologies in these global value chains.

The main findings of IEEP’s ‘Trade in support of circular economy’ final report were presented. You can rewatch the entire event below:

Insights from the panel

“Canada as a high-income country depends massively on raw materials exports but they also have the investment capacity to fund some of that transition. Not all countries that export raw materials have that luxury, some of them really depend on those raw materials exports in order to simply sustain their economy and then circularity can become, for them, a bit of a threat. […] There’s a discrepancy between trade policies and the circular economy policies. They should be joined up and we should look at circular economy elements that can be put into specific sectoral applications. We need also to address the lack of definition and common standards [such as] the Technical Committee 323 of the ISO.”

Jocelyn Blériot, Executive Lead, International Institutions & Governments, Ellen MacArthur Foundation

“There has been good collaboration between jurisdictions and a lot of listening in terms of incorporating CE at different levels [in Nigeria]. These include policies and regulations and in particular the need to avoid creating regulations that are putting punitive measures only but also incentivise creation of new business models and new jobs on the opportunities that CE brings. And more importantly how do you ensure that this is profitable because you cannot really do this from a development aid perspective, it’s really about trade, it’s about business because otherwise you cannot scale and you cannot get to the point you want to”.

Dr. Ndidi Nnoli-Edozien, Chair Circular Economy Innovation Partnership and Managing Partner Afrikairos GmBH

“Regarding the EU policy perspective, the EU is in a lighthouse position. If you look at the Sustainable Products Initiative, that is very important to increase ambition on recycled content. [Clartier] makes products based on plastic waste, such as paints, oils, and detergents. If [greater recycled content] is mandatory in the future that will be helpful for developing countries to turn the plastics pandemic into a business opportunity which they can export to Europe. From that perspective, there is a real opportunity to enhance the circular economy within the trade policy frameworks with these countries.”

Jasper Munier, Business Development Manager NWE at Clariter, a firm upcycling plastics waste into high valuable chemical end products such as solvents, oils and waxes

“Trade policy is not a standard setting body so we need to reply on other instances where we can work on standards. In the context of the Structured Discussions at the WTO and the [GACERE], we’ve heard from a number of businesses speaking about the importance of avoiding regulatory fragmentation internationally. The EU has gone quite far in setting standards and making sure EU policies contribute to environmental protection but it is also important to work together with our partners so they can follow us and create opportunities for businesses.”

Indre Vaicekauskaite,  Policy Officer, Trade and Sustainable Development, DG Trade, European Commission