International Trade and the Circular Economy: A New Frontier

Abstract

Over the last decades, the global community has been confronted with a real challenge to find sustainable solutions that are suitable to combat environmental degradation. Therefore, the circular economy has emerged to transform environmentally harmful economic activities and practices into sustainable ones. The aim of this article is to explore the dynamic relationship between international trade and the circular economy, with a focus on the principles of such an economy, which will play a central role in the context of international trade. Accordingly, it will investigate how international trade can be used as a catalyst for the transition from a linear to a circular economy, while promoting resource efficiency and environmental sustainability. The extension of product lifetimes will be highlighted, as well as economic integration through regulatory convergence and knowledge sharing in related fields. Using explanatory graphs and significant variables such as material import dependency and trade in recyclable raw materials it will be demonstrated that international trade has a strong impact on the transition from a linear to a circular economy. The paper will analyse these parameters for the European Union countries over a 5-year period, from 2015 to 2019, the period before the sanitary crise and other geopolitical events, thus, demonstrating that the transition to a circular economy not only protects the environment but also offers considerable opportunities for sustainable economic development, including in international trade.