Trade for an inclusive circular economy: A framework for collective action
International trade is a key enabler of a global and inclusive transition to a circular economy. However, inequities in power relations, digital trade capabilities, trade infrastructure, access to finance, and industrial and innovation capabilities mean that countries in the Global North are better positioned to reap the benefits of international trade than those in the Global South.
Critically, countries in the Global South are often the final destination for internationally traded low-value or illegal waste. Lack of capacity in these countries to properly manage and treat such waste brings greater environmental risks and social burdens.
If the explicit goal to reduce inequality is not built into the global circular economy transition, gains to be made from circular trade are likely to be more unevenly distributed between the Global South and North.
This paper sets out a framework for inclusive circular trade, intended to enable a pathway through which circular trade helps to promote fair, inclusive and circular societies. The framework was developed through the work of an alliance of organizations spanning Africa, Southeast Asia, Latin America and the Caribbean, and Europe.
Current trade policy intended to promote coordination for trade in circular goods, services and materials is being constrained by numerous barriers. An integrated and collaborative approach to overcoming these barriers is needed if the social, economic and environmental potential of circular trade is to be fully realized. This can only be achieved through commonly recognized outcomes and coordinated actions. The framework presented in this paper is an attempt to bridge trade, circular economy, sustainability and development policy areas to guide trade and trade-related policies, practices and agreements towards a shared goal of an inclusive circular economy.
The framework is a carefully considered effort to guide progress and discussion on a complex topic that will evolve over time. It is hoped that the framework will provide a pathway forward in an area where collective action is needed. It is not its purpose to solve the more intractable challenges limiting the potential of the circular economy to contribute to achieving necessary economic prosperity and human and environmental well-being. To be truly sustainable, policymakers in wealthy countries must critically explore the circumstances in which circular trade can help definitively reduce consumption-related environmental impacts to a level that is within the planetary boundaries and provide sufficient development space for low- and middle-income countries to grow in order to provide essential goods and services to their citizens.
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