11-04-2019

International trade and sustainable development, an (im)possible relationship

In recent months, public opinion has focused on the numerous global events that promote sustainable development. In this regard, among the various questions that have arisen within the academic and political world, one of the most relevant is the possibility of having an international trade that defends and promotes sustainability. It is therefore necessary to ask oneself what can be the possible changes that should be made to global trade in order to favour a different development.

 

Starting from the statements made in major international organisations, such as the UN (United Nations) and WTO (World Trade Organisation) agencies, a number of stakeholders consider international trade to be a useful tool for promoting sustainable development. In order to be able to analyse this current of thought, it would be useful to understand how global trade influences the three pillars of sustainability: economy, social interests and the environment.

 

According to data from the World Bank (WB) and the WTO, trade has certainly played a positive role in supporting the economic part of sustainable development. In fact, the increase in trade transactions has led to a reduction in poverty, youth unemployment and has promoted growth. Among the many data provided by the organizations mentioned, it is useful to mention, for example, those concerning relations between developing countries and global trade. At the beginning of the new century, developing countries accounted for only 33% of world transactions, down from 48% in 2015. At the same time, there has been a general reduction in the number of people living in extreme poverty. Basically, trade leads to an improvement in the quality of people's lives, for example, by reducing prices generally or increasing the number of jobs.

 

The relationship between global transactions and social interests is more controversial. While the increase in trade and the resulting economic well-being allows societies to focus more on the protection of human rights, the creation of trade agreements can lead to a general deterioration in working conditions. There is a great deal of evidence to support these two contradictory trends. For example, different trade agreements, according to the ILO (International Labour Organization), have created a general worsening of working conditions. However, many of these free trade agreements are governed by provisions concerning the protection of human rights. The European Union itself has included in all its trade agreements with third countries rules concerning the defence and promotion of gender equality.

 

The relationship between current trade and the environment is even more complex. In fact, there are many examples where global trade has caused significant damage to the ecosystem of different regions. Similar cases concern the areas of Latin America and South-East Asia, where global trade has generated aggressive agricultural expansion and a consequent deforestation or general loss of biodiversity. In a similar way, excessive livestock farming has led to strong exploitation of the soil and river courses.

 

Moreover, international trade has often been a catalyst for climate change. In fact, trade dynamics can increase the vulnerability of some countries to climate change. Following the basic rules of trade, countries specialize in the production of those goods on which they have a comparative advantage, relying instead on the import of other products according to their needs. Therefore, these markets become very weak in the event that climate change leads to an interruption in the supply of imported goods.

 

Faced with this contrasting scenario, there are also economic and political instruments that can turn international trade into a good means of mitigating the damage caused to Sustainable Development. For example, several institutional actors have signed the Paris and Chicago Agreements of 2016 and 2017, also striving to implement a different global trade in order to address the global temperature increase.

 

In conclusion, trade affects several aspects of sustainability, both positively and negatively. In order to transform international trade into a tool for sustainable development, the problem needs to be addressed in a multidisciplinary way, involving state actors and civil society at both local and international levels. Only in this way, in the future, will trade be able to positively influence the three pillars of the Sustainable Development.

 

Edited by Mondo internazionale - Mario Ghioldi

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