Circular Economy In Trade Agreements

It is clear that the EU needs a more globally conscious circular economic policy that is inclusive for all, including third countries. This is essential to promote their path to sustainable development, instead of jeopardizing their achievement of the most important SDGs. UNCTAD`s work on the circular economy began in 2015 with a collaboration with the Ellen MacArthur Foundation on resource flow potentials in major economies such as India and China. The revision of the EU`s free trade agreements shows that to date only two agreements explicitly mention the circular economy. However, in both cases, no concrete incentives to promote the circular economy are presented and nothing is said about possible ways to promote the circular economy in practice. In addition, the circular economy is integrated into the agreements, as it only covers environmental protection measures for trade, indicating that the circular economy is not yet considered a fundamental feature of the economy and, therefore, of trade. They also highlighted how internal EU policies to promote the circular economy and increase the more sustainable use of resources, depending on their implementation and in the absence of additional control mechanisms, can have negative effects outside the EU, including negative environmental and social impacts on developing countries. The shift from a linear and extractive model to a more circular approach will lead to a paradigm shift and significant changes in existing business models. In today`s highly integrated global economy, international trade will play a key role in enabling this transition by facilitating the diffusion of circular solutions and leveraging international comparative advantages. While most thinking in this area has focused on the role of trade in goods, the role of trade in services in supporting this transition has so far been much less taken into account, although services play a key role in supporting circular economy businesses along the value chain. 12 The Economic Times (2019). From 28 January, India imposed anti-dumping duties on 99 Chinese products: the Ministry of Commerce. From economictimes.indiatimes.com/news/economy/foreign-trade/india-imposed-anti-dumping-duty-on-99-chinese-products-as-on-jan-28-commerce-ministry/articleshow/67831165.cms In recent years, governments have sought solutions to environmental challenges related to unsustainable patterns of extraction, processing and use of natural resources.

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