Trade and sustainability

With a starting point in the UN’s Sustainable Development Goals, we introduce a series of short articles explaining the linkages between trade and sustainability.

International trade is recognised as a driver of economic growth and poverty reduction. Economic welfare improvements are a core argument for supporting international trade. However, a more open trade environment can have positive and negative effects on the environment, economic inequality, and social structures, including working conditions. Well designed trade policy can help accentuate the positive impacts and reduce the negative impacts. Aligning trade policies with sustainability goals can thus achieve further welfare gains.

Trade as an instrument for development

The UN's Agenda 2030 highlights that trade is an important instrument for achieving all three dimensions of sustainable development: economic, social and environmental. It includes specific targets for trade that promote an open, rule-based and non-discriminatory trade system under the WTO, increase the exports of developing countries and achieve tariff and quota free market access for the least developed countries. Trade is also referred to in several other targets, including for agricultural products, sustainable procurement and capacity-building.

Trade policy facilitating change

Trade policy can make important contributions to environmental goals. Examples include combatting climate change and promoting a more resource efficient circular economy for responsible consumption and production and sustainable land use. To combat climate change, trade policy can aim to remove fossil fuel subsidies, spread climate friendly technologies and practices, and improve the effectiveness of national climate policies. Trade and climate transition

International trade can promote a circular economy through specialisation and economies of scale, for example in facilities that process and recycle used materials. Trade for a circular economy

Social sustainability includes the protection and promotion of a broad spectrum of values and interests that affect people’s living conditions such as human and labour rights, gender equality, health, and consumer and security issues. Structural changes resulting from international trade can affect different groups of society in different ways. Analysing social sustainability helps to identify how changes associated with trade liberalisation can be addressed through trade policy and complementary domestic policies. Trade and social sustainability

Our article on economic sustainability discusses how trade policies can contribute to more inclusive economic growth, for example through the design of trade agreements, Aid for Trade, and preferential market access for developing countries. Trade and economic sustainability