WT/COMTD/AFT/W/87  
 
2 August  2021 
(21-6016) Page: 1/11 
Committee on Trade and Development  
Aid for Trade    
 
SUSTAINABLE TRADE , CIRCULAR ECONOMY  AND AID FOR TRADE  
AN ISSUES PAPER  FOR THE 2020 -2022 MONITORING AND EVALUATION EXERCISE  
JOINT COMMUNICATION BY THE WTO AND OECD SECRETARIATS  
 
1  OVERVIEW  
1.1.  The following background note has been prepared by the WTO Secretariat.1 It is intended as a 
discussion paper to help guide implementation of the Aid -for-Trade Work Programme 
(WT/COMTD/AFT/W/ 81.Rev.1). The Work Programme is themed "Empowering Connected, 
Sustainable Trade".  
1.2.  The issues  paper provide s information on sustainable trade , circular economy  and Aid for Trade . 
It seeks to support WTO M embers in framing the issues and perspectives they wish to examine in  
the 2020-2022 Work Programme. More specifically,  the issues paper , and Memb ers' reactions to it , 
will help inform  analysis to be conducted for the 2022 Aid for Trade Global Review and  the 
accompanying  monitoring and evaluation (M&E) work. 
1.3.  The 2020-22 Aid-for-Trade Work Programme seeks to address sustainable trade by analysing 
how industrialization and economic growth objectives interact with those on sustainability and 
responsible production. A further point mentioned in the Work Programme is the nexus between 
green growth and digital connectivity, how these two processes can promote inclusive growth, in 
particular for LDCs , and how Aid for Trade can empower different actors to realize these 
opportunities.  
1.4.  This issues paper is organized as f ollows . A first section examines sustainable development and 
its relationship with trade.  Next, the note introduces the concept of a "circular econom y". A further 
section  examines the circular economy from a trade and development perspective  (i.e. from the  
perspective of developing countries ', and in particular LDCs ', engagement in international trade ), 
with a focus on sectors of particular importance in trade terms . Lastly, the issues  paper  examines 
how Aid  for Trade is support ing sustainable trade  and could help catalyse  the transition process to 
a circular economy . At the end of each section, issues for possible consideration in the monitoring  
and evaluation exercise are identified.  
1.1  Sustainable Development and  Trade  
1.5.  "Development which meets the needs of the present without compromising the ability of future 
generations to meet their own needs".2 This is how the Brundtland Commission encapsulated the 
concept of  "sustainable development " in the 1987 Report of the World Commission on Environment 
and Develop ment: "Our Common Future" . The report underscored that e nvironment and 
development are "not separate challenges; they are inexorably linked ". The Commission established 
sustainable development as a global objective provid ing "a framework for the integratio n of 
environment policies and development strategies ". Though the Brundtland Commission identified 
 
1 This document has been prepared under the Secretariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO . 
2 Report of the World Commission on Environment and Development: "Our Common Future" 
https://sustainabledevelopment.un.org/content/documents/5987our -common -future.pdf . WT/COMTD/AFT/W/87  
 
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  common challenges, it did not advocate a " single blueprint of sustainability ", as socio-economic  
systems and ecological conditions differ widely among countr ies. 
1.6.  "In order to achieve sustainable development, environmental protection shall constitute an 
integral part of the development process and cannot be considered in isolation from it" .3 Principle  4 
is one of 27 principles set out in the 1992 Rio Declaration on Environment and Development that 
further elaborates the concept of sustainable development. Both the Rio Declaration and 
accompanying Agenda 21 propose actions along three main axes: economic , environmental and 
social . Bringing discussions on sustainable development up to date, this same focus on economic, 
environmental and social objectives is evident in the 2030 Agenda and accompanying Sustainable 
Development Goals  (SDGs) . 
1.7.  The 2030 Agenda id entifies trade as one of the means of implementation to fulfil the SDGs , 
and explicitly mention s it as a key driver for many of the objectives highlighted .4 Furthermore,  a 
report by the WTO Secretariat highlights the  broader  role that  international  trade plays in delivering 
the SDGs and targets  established in the 2030 Agenda.5 A 2018 joint UN Environment Programme  
(UNEP)  and WTO report also discusses "Making trade work for the environment, prosperity and 
resilience".6 The contribution  of trade to sustain able development was already recognized at the 
inception of the WTO . The first paragraph of the Marrake sh Agreement  Establishing the World Trade 
Organization states that:  
"relations in the field of trade and economic endeavour should be conducted with a view to 
raising standards of living, ensuring full employment and a large and steadily growing volume 
of real income and effective demand, and expanding the production of and trade in goods and 
services, while allowing for the optimal use of the world's re sources in accordance with the 
objective of sustainable development, seeking both to protect and preserve the environment 
and to enhance the means for doing so in a manner consistent with their respective needs 
and concerns at different levels of economic development ".7 
1.8.   The different dimensions of sustainable development have been long considered at WTO, 
notably in the context of the relationship between WTO Agreements and other international 
agreements and organizations mandated to pursue different aspec ts of sustainable development. 
Two WTO Committees are of particular relevance in this regard: the Committee on Trade and 
Environment ; and the Committee on Trade and Development.  
1.9.   A primary task  of the WTO Committee on Trade and Environment is to  "identify the relationship 
between trade measures and environmental measures, in order to promote sustainable 
development ".8 The Committee 's mandate also includes making  "appropriate recommendations on 
whether any modifications of the provisions of the multilateral  trading system are required, 
compatible with the open, equitable and non -discriminatory nature of the system ".9 
1.10.   An important  feature of the work of the WTO Committee on Trade and Environment  is to 
examin e the relationship  between trade rules and environmental organizations  and agreements . 
There are over 250 multilateral environmental agreements (MEAs) currently in force .10 Multilateral 
environmental agreements play a critical role in the overall framework of environmental l aws and 
 
3 Report of the United Nations Conference on Environment and Development, Rio de Janeiro, 3 -14 June 
1992, 
https://www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A_CONF
.151_26_Vol. I_Declaration.pdf . 
4 International trade is explicitly  mentioned as a means of implementation  in the agenda's outline for 
SDGs 2,3,8,10,14 and 17 . A more detailed perspective highlighting trade's direct and indirect impacts on 
specific SDGs can be found he re: https://www.wto.org/english/thewto_e/coher_e/sdgs_e/sdgs_e.htm  
5 World Trade Organization. (2019). Mainstreaming Trade to Attain the Sustainable Development Goals.  
Geneva: W TO. Retrieved from https://www.wto.org/english/res_e/booksp_e/sdg_e.pdf . 
6 WTO & UNEP. Making trade work for the environment, prosperity and resilience. 2018. Retrieved from: 
https://www.wto.org/english/res_e/publications_e/unereport2018_e.pdf . 
7 WTO Agreement: Marrakesh Agreement Establishing the World Trade Organization , 15 April 1994. 
8 WTO & UNEP  2018. Op.cit.  
9 WTO & UNEP 2018. Op.cit.  
10 A detailed summary of trade -related MEAs can be found in the "Matrix on Trade -Related Measures 
Pursuant to Selected MEAs" prepared by the secretariat ( WT/CTE/W/160/Rev.8 ). WT/COMTD/AFT/W/87  
 
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  conventions.11 Complementing national legislation and bilateral or regional agreements, multilateral 
environmental agreements form the overarching international legal basis for global efforts to address 
particular environmental issues.  
1.11.   The WTO Comm ittee on Trade and Environment thus acts as a forum where  international 
organizations  including  UNEP and the OECD  and the secretariats of other MEAs to regularly brief 
WTO Members on their work. This helps WTO delegates keep abreast of the latest global in itiatives 
on the environment and to deepen their understanding of how trade and the environment interact 
with each other, while pr omoting mutual supportiveness between WTO rules and environmental 
objectives including those set out in MEAs . 
1.12.   Examples of  relevant MEAs include the Convention on International Trade in Endangered 
Species of Wild Fauna and Flora (CITES), The Basel Convention on the Control of Transboundary 
Movements of Hazardous Wastes and their Disposal, and the United Nations Fish Stock Agreement 
(UNFSA). The Kyoto Protocol, Paris Agreement and their parent treaty, the United Nations 
Framework Convention on Climate Change  (UNFCC) , do not contain direct trade provisions or 
obligations, although some of the embedded elements within these agreements giv e rise to  indirect 
trade implications.  
1.13.   The WTO Committee for Trade and Development  (CTD)  in turn  serves as a focal point for the 
consideration and coordination of work on development in the WTO, and its relationship to 
development -related activities in oth er multilateral agencies.12 In this regard, t he CTD reviews the 
application of special and differential treatment provisions, oversees the WTO's Work Programme on 
Small Economies, contributes to transparency -enhancement measures in preferential trade 
agree ments and evaluates the market access schemes provisioned to LDCs. Furthermore, the 
CTD reviews the WTO's technical assistance activities and the Aid -for-Trade  Initiative.13 
Issues for possible consideration  in monitoring  and evaluation : 
• How is sustainab ility being  conceptualized and integrated into the national , and regional , 
development  and Aid-for-Trade strategies of developing countries, donors (bilateral, regional 
and multilateral) and south -south partners?  
• What role do es trade and trade pol icy play in the sustainable development strategies of 
developing countries, donors (bilateral, regional and multilateral) and south -south partners ? 
How is  structural transformation and industrialization integrated into these strategies ? 
2  MOVING FROM A LINEA R TO A CIRCULAR ECONOMY   
2.1.  The preamble of the  2030 Agenda for Sustainable Development states that signatories are 
"determined to protect the planet from degradation, including through sustainable consumption and 
production, sustainably managing its natural resources  …". This reinforces perspectives framed in 
the 1992 Rio Declaration on Environment and Development, which agreed that "to achieve 
sustainable development and a higher quality of life for people, States should reduce and eliminate 
unsustai nable patterns of production and promote appropriate demographic polices ".14 
2.2.  This perspective is underpinned  by SDG 12, which concerns Responsible Consumption and 
Production in the 2030 Agenda . A series of 11 targets are found under this general  goal. These 
include  specific targets  (e.g. to halve per capita global food waste at the retail and consumer levels, 
while reducing food losses along production and supply chains  by the year 2030 ) and more general 
 
11 See UNEP (2016), Role of Multilate ral Environmental Agreements (MEAs) in achieving the Sustainable 
Development Goals (SDGs) . 
12 WT/L/46 . 
13 Early on, the International Labour Organization (ILO) was recognized as the mandated global body 
with respect to labour standards  and trade – and so playing a key role in the social  dimension of sustainable 
development. See the Singapore Ministerial Declaration (1996 ) and Doha Ministerial Declaration (2001) . 
14 Report of the United Nations Conference on Environment and Development, R io de Janeiro, 3 -14 June 
1992, 
https://www.un.org/en/development/desa/population/migration/generalassembly/do cs/globalcompact/A_CONF
.151_26_Vol.I_Declaration.pdf . WT/COMTD/AFT/W/87  
 
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  targets (e.g. to achieve the sustainable management a nd efficient use of natural resources ). Annex  1 
lists the specific targets for responsible consumption and production . 
2.3.  In the view of some, today's predominant economic model is the linear economy  which 
functions  on a "take, make and dispose " basis. The generation of  value  in this linear economy  can 
create several externalities in the form of resource exhaustion, waste generation and pollution  which  
are not (fully) priced . These externalities arise as a consequence of an industrial or commerci al 
activity which affects other parties without this being reflected in costs and market prices . 
2.4.  A growing body of research supports the move to a more sustainable framework. Joint research  
by UNEP and the International Resources Panel , for instance,  sugge sts that approximately 
35 kilograms worth of minerals, fuels and biomass was extracted per person per day during the 
year. This corresponds to 92 billion tonnes in aggregate, representing a three -fold increase when 
compared to 1970 figures.15 Such numbers can be expected to grow further  in the future given 
recent estimates suggest ing that global  material usage is expected to more than double by 2060.16 
2.5.  A study by the World Bank reveals that the global economy generated more than 2 billion 
tonnes of solid waste in 2016 alone . Approximately  40% of such refuse was improperly  disposed , 
either ending in landfills or open dumps.17 Solid waste tonnage is expected to increase by 70% by 
2050. Waste disposal is  expected to become a pressing issue . Further expansion of  disposal sites 
contributes to the destruction of biodiversity and  increases  the likelihood  for disease transmission 
as they prove to be ideal conditions for vector -borne diseases .18 
2.6.  The circular economy seeks to mitigate environmental  problems  associated with resource 
extraction and waste generation , by emphasizing the formation of feeder loops that transform waste 
into new inputs for production  in all nodes within the value chain . These feeder loops integrate with 
production process es to form a series of resource -regenerative c ycles. These resource -regenerative 
cycles can be  renewable (biological) or non -renewable (technical) in nature.  
2.7.  Renewable  regenerative  cycles denote natural systems with regenerative capacity . Feeder 
loops here exist in  the agri -food sector  through such practices as composting food waste – to 
generate biofertilizers and bioenergy – and incentivizing water reutilization.19 Another example is 
renewable energy generation where the power source (e.g. wind or sun ) naturally regenerate s. 
2.8.  Non-renewable  cycles stress the management of finite resources within the production cycle . 
This involves  reusing  (e.g. second -hand markets for motor vehicles  or clothes ), repairing, 
re-manufacturing  (e.g. re-treading of pneumatic and non -pneumatic tyres) , or recycling of products, 
components and materials  (e.g. reincorporating secondary metals into the production process) . 
 
15 IRP, Global Resources Outlook 2019: Natural Resources for the Future We Want , 2019  
Retrieved from: https://www.resourcepa nel.org/reports/global -resources -outlook . 
16 OECD. Global Material Resources Outlook to 2060 . 2019  Retrieved from: 
https://www.oecd.org/publications/global -material -resources -outlook -to-2060-9789264307452 -en.htm . 
17 The World Bank Group, What a Waste 2.0: A Glo bal Snapshot of Solid Waste Management to 2050 , 
2018. Retrieved from: https://openknowledge.worldbank.org/handle/10986/30317 . 
18 Ibid. 
19 FAO, The wealth of waste The economics of wastewa ter use in agriculture , 2010  
Retrieved from: http://www.fao.org/land -water/overview/covid19/circular/en/ . WT/COMTD/AFT/W/87  
 
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  Figure 1: Illustrated difference between the Circular and Linear Economy  
 
Source: Netherlands Environment Age ncy (2016)  
 
2.9.  Figure 1 above , a stylized illustration , describes the key differences between the two types of 
economies discussed above. The left panel denotes a linear economy, characterized by substantial 
volumes of input and waste represented by linear, vertical arrows. The right panel denotes a circular  
economy wherein renewable and non -renewable  source  loops re-integrate resources back into the 
production process such that  extraction and wastage are minimized . The thickness of the line for 
resources indicates the volume of resources needed in each system.  
2.10.   Fostering interactions between trade and the circular economy can produce beneficial and 
mutually reinforcing outcomes. For instance, facilitating  the trade in goods, components, materials 
and services related to key circular economy activities  would help to ensure that these activities 
happen in the best possible locations in terms of cost, quality, skills and other location -specific 
advantages.20 Moreover, it would give companies involved in circular economy activities improved 
access to a larger supply o f recovered goods, components and materials for recirculation. Trade  
would  also allow companies to decrease costs through vital economies of scale , while strengthening 
the incentive to invest in eco -design and innovation, reverse logistics and other buildi ng blocks of 
circular business models.21 What is more, open trade could facilitate access at the lowest cost to 
critically important technological solutions for a circular economy . 
2.11.   Fostering interactions between trade and circular economy must be accompani ed by efforts 
to minimize certain risks, which could arise, for example, when goods are exported after their 
first use to countries without the proper capacity to treat or recirculate them in an environmentally 
sound manner or when hazardous or other waste  moves across borders under the pretence of goods 
for reuse or recycling. Some concerns also exist regarding trade in second -hand or refurbished 
goods. For example, it has been argued that imports of these types of goods may put additional 
pressure on the waste management systems of developing countries, especially when the goods in 
question have shorter lifespans than the corresponding goods in "new" condition.  Efforts to address 
these and related concerns have been part of the global environmental policy agenda for several 
decades, including in the context of the Basel Convention on the Control of Transboundary 
Movements of Hazardous Wastes and their Disposal.  
2.12.   Figure 2 below illustrates the possible intersections between trade and the circular economy. 
The nodes within the dotted lines indicate the processes and objectives of circularity in a domestic 
setting. The boxes outside the demarcation suggest ways in which trade could interact with this 
frame work. As suggested, trade provides an avenue to enhance circular economy adoption by 
 
20 Steinfatt, Karsten.  Trade policies for a circular economy: What can we learn from WTO 
experience? ," 2020 World Trade Organization (WTO), Economic Research and Statistics Division.  
Retrieved from: https://www.wto.org/english/res_e/reser_e/ersd202010_e.pdf . 
21 Ibid. 
WT/COMTD/AFT/W/87  
 
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  providing an avenue for cross -border movement in secondary raw materials, second -hand goods, 
waste and services.  
Figure 2: Circular Economy in an International Trade Conte xt 
 
Source: Chatham House (2019)  
 
2.13.   Four main approaches to facilitate  a circular economy  have been identified : 
a. Policy frameworks that internalize externalities : This refers to the use of policy instruments 
to either increase  the relative prices of natur al resources  or mitigate  resource -inefficient  
consumption patterns.22 Externalities can be incorporated into firms' pricing decisions through 
regulatory measures (e.g. standards  and certification schemes)  or market -centric policies 
(e.g. pollution tax, carbon pricing schemes)  that compel firms to consider  sustainable 
alternatives . Consumer behaviour  in turn can be reshaped through public education initiatives  
and product labelling schemes  that increase the pu blic's awareness of resource wastage. 
Furthermore, measures such as  waste disposal tax es can be used to incentivize household 
transitions.  
b. Enabling resource recovery and recirculation : This refers to the act of maximizing the 
number of feeder loops, suc h that resources are continuously reintegrated into production 
systems. Resource rec overy through processes such as recycling  reduces non -renewable 
extraction, therefore leading to less environmental degradation. Some manufacturing firms 
have begun includi ng such systems into their production process.  
c. Enhancing Product Longevity : This denotes increasing the lifespan of products and services 
such that the demand for new production decreases.23 When products are designed with 
longevity in mind , the rate of resource usage falls while simultaneously ensuring that wastage 
due to wear and tear or obsolescence is reduced.  Furthermore, it also promotes the 
development of a resale market that further decreases the need for production. Longevity 
could also b e promoted through the adoption of a Product as a Service business model, where 
 
22 McCarthy, A.,  R. Dellink  and R. Bibas (2018), "The Macroeconomics of the Circular Economy 
Transition:  A Critical Review of Modelling Approaches", OECD Environment Working Papers , No. 130, OEC D 
Publishing, Paris, Retrieved from: https://doi.org/10.1787/af983f9a -en. 
23 APEC. Regional Trends Analysis – What Goes Around Comes Around: Pivoting to a Circular Economy . 
2020. Retrieved from:  https://www.apec.org/Publications/2020/05/APEC -Regional -Trends -Analysis ---What-
Goes-Around -Comes -Around . 
WT/COMTD/AFT/W/87  
 
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  the firm revenue is linked to maximi zing the usage of a product rather than the number of 
physical units sold . 
d. Supporting  the regeneration of natural capital systems : This d enotes the orient ation of  
systems towards the  use of renewa ble energy and biological materials such that the need for 
natural  extraction  or environment degradation  decreases . Accelerating the incorporation of 
renewable energy sources in nations' energy mix , for instance , would lead to decreased use 
of non -renewable energy sources. Furthermore, the use of practices such as rotational 
grazing, compost usage and  ecosystem cohabitation  can help improve agricultural productivity 
while concurrently promoting sustainability . 
Issues for possible consideration in monitoring  and evaluation : 
• Are circular economy  (responsible consumption and production)  perspectives being 
integr ated into the na tional and regional sustainable development and trade strategies of 
developing countries, donors (bilateral, regional and multilateral) and south -south partners?   
If so, how and in which economic sectors ? 
• What constraints may limit the conceptualization an d adoption of circular approaches by 
developing countries, donors and south -south partners?  
• What opportunities arise for trade integration arising from circular economy approaches ? 
3  MOVING TO  A CIRCULAR ECONOMY : TRADE AND DEVELOPMENT DIMENSION  
3.1.  A starting point to consider the trade and development dimension of moving to sustainable 
trade and development is the participation of developing countries and LDCs in the multilateral 
trading system. T his participation is reviewed annually in analytical re ports issue d by the 
WTO Secretariat for both LDCs and developing countries.24 One striking feature is that many  
developing Members, especially LDCs, rely on  a narrow export basket  and have a limited  trading 
partner  mix. 
3.2.  Pre-COVID -19 pandemic, h alf of WTO Members classified as LDCs export fewer than 
100 product codes  and reach only some  46 foreign markets on average . Evidence of high production 
concentration can be gathered while examining Figures 3 and 4 below , which outline merchandi se 
export structur e trends for LDC and developing economies respectively. Figures indicate  a high 
dependency on the extractive (fuels, non -ferrous metals, ore and mineral), textiles, 
clothing/apparel, agriculture, office and telecom sectors. Together, they account for 88 % and 
55% of LDC and developing country merchandise exports respectively for 2018.  
Figure s 3 and 4: Merchandi se Export Structure of Developing Countries  and LDCs , 2018  
Developing country       LDC 
 
Source: WT/COMTD/ W/251 and WT/COMTD/LDC/W/67 . 
 
3.3.  Tourism and travel was the largest tradeable service sector for developing Members, 
accounting for USD 574 billion worth of exports in 2018  – again pre -COVID -19 pandemic . This sector 
 
24 WT/COMTD/W/251 and WT/COMTD/LDC /W/67 . 
WT/COMTD/AFT/W/87  
 
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  also registers as the largest tradeable service secto r for LDCs with exports valued at USD 19.8 billion 
for the year 2018. It expanded by 11 % in LDCs during the period 2011 -2018. Tourism and travel 
also accounts for almost 30 % of GDP for Small and Island Developing States.25 
3.4.  All the sectors cited above (both merchandise goods and services) are associated , to varying 
degrees , with negative environmental externalities. For instance, t he agriculture and  extractive 
sector s have both been associated with habitat loss  given th e exte nsive land requirement to scale 
production. Moreover,  the agriculture and textiles and apparel sectors together draw almost 75% of 
global freshwater withdrawal . They also generate significant  quantities of  wastewater , therefore  
generating pollution and inducing environmental damage.  
3.5.  Together  the textiles and apparel and Information and Communication Technolog y (ICT) 
sectors generate significant waste streams . An estimated 92 million tonnes of apparel and textile 
waste is generated every year. This figure is predicted  to rise by an additional 40% towards the end 
of 2030.26 ICT waste has been identified as an issue of  global concern . Worldwide  e-waste generation 
was estimated at approximately 53.6  million tonnes as of 2019.27 Approximately four -fifths of such 
waste remains undocumented, either discarded in landfills, burned or treated in a substandard 
manner.28 Moreover, e -waste generation is expected to reach  74.7 million tonnes  by 2030.  
3.6.  Greenhouse gas emissions is another form of an environmental externality created during the 
value generation process found in developed, developing and least developed countries alike. For 
instance, t he travel and tourism sectors were estimated to account for 5% of aggregate emissions 
in 2016 with emission values expected to witness a growth of 25% by 2030.29 The highly globalized 
nature of some value chains (e.g. ICT goods) also implies that transport of intermediate products 
are also a source of emissions . Value chains are highly fragmented, with a large degree of variance 
observable between product sub -categories . 
3.7.  One sector in which resource recycling  approaches are observable at the level of  trade flows 
are the waste streams associated with the extractive sector  – despite the difficulties in distinguishing 
between recycled and virgin raw materials . The global trade of iron and steel scrap is a case in point, 
reaching an  overall volume of 100. 4 million tonnes, or 24% of these metals ' aggregate trade in 
2019.30 
3.8.  Change is already occurring due to the adoption of environmental policies by governments , 
and sustainability practices by the private sector . In the case of non -renewable fuels , for instance, 
demand for and production of extracted products is already being influenced by commitments 
towards sustainability in exporter markets. This is resulting in a changing pattern of demand in the 
extractive sector, with falling demand for fossil fuels and growing pressure on resources such as 
aluminium, cobalt, lead, lithium, manganese and nickel that are essential for battery production. 
Many of these mineral s also lend themselves to recycling due to scarcity. These trends are likely to 
continue. The International Energy Agency  is projecti ng a nearly 60% decline in average annual oil 
demand growth over the period 2019 -2025 when compared to historic growth traj ectories .31 This 
decline can be attributed to countries around the world  implement ing policies  that seek  to enhance 
energy efficiency and reduce fossil -fuel dependency.  
 
25 UNEP. Small Island Developing States: Building resilience for sustainable trade and development . 
2020.  Retrieved from: https://www.unenvironment.org/news -and-stories/story/small -island -developing -states -
building -resilience -sustainable -trade -tourism . 
26 Global Fashion Agenda . Pulse of the Fashion Industry . 2017  Retrieved from: 
https://www.globalfashionagenda.com/publications -and-policy/pulse -of-the-industry/ . 
27Forti V., Baldé C.P., Kuehr R., Bel G. The Global E -waste Monitor 2020: Qu antities, flows and the 
circular economy potential . 2020. United Nations University (UNU)/United Nations Institute for Training and 
Research (UNITAR) – co-hosted SCYCLE Programme, International Telecommunication Union (ITU) & 
International Solid Waste Asso ciation (ISWA), Bonn/Geneva/Rotterdam.  
28 ITU. Creating a circular economy for ICT equipment. 2020. Retrieved from: 
https://www.itu.int/en/mediacentre/backgrounders/Pages/e -waste.aspx . 
29 UNWTO, ITF. Transport related CO2 emissions from the tourism sector . 2016  
30 BIR. World Steel Recycling in Figures:  2015-2019. 2020.  
Retrieved from: https://www.bir.org/publications/facts -figures/download/643/175/36?method=view . 
31 IEA. Oil 2020.  2020. WT/COMTD/AFT/W/87  
 
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  3.9.  Research suggests that expanding  circular economy approaches  may also unlock economic 
value . The raw materials contained in e -waste were worth roughly USD 57 billion as of 2019.32 Ample 
space for market expansion  is available given that the recycling rates for electronic waste were 
estimated at only approximately 17.4% in 2019.33 
Possible issues for consideration in monitoring  and evaluation : 
• How is the move to a sustainable/ circular economy impact ing the trade flows of least 
developed and other developing countries?  What does this process look like in the sectors 
of greatest export  interest for developing countries and LDCs? How is this process likely to 
evolve in  the future?  
• Where may  adjustment costs be incurred in the transition  to a sustainable/ circular economy 
(responsible consumption and production)?  
• Where might opportunities arise for economic and export diversification for developing and 
LDCs?  What role could technology transfer play in helping countries seize these 
opportunities?  
4  AID FOR TRADE , SUSTAINABLE TRADE  AND THE CIRCULAR ECONOMY  
4.1.  The 2019 Aid-for-Trade M&E exercise highlighted action being taken by partner countries 
(including LDCs), and regional organizations on green value chains, renewable energy and green 
growth strategies. Environmental considerations were also cited as a driver of changes in 
Aid-for-Trade programming by donors.  
4.2.  Among LDCs, one Member mentioned that national sustainable development strategies were 
drivers of change in its Aid-for-Trade priorities. A developing country Member also noted this trend. 
Green growth strategies were also re ferenced by an additional LDC Member . Donors mentioned 
sustainable development as a priority in three  cases, and eight times as driver of changes in their 
Aid-for-Trade strategies . 
4.3.  Eighty -seven of the 88 answers (99%) to the partner country questionnaire s tated that Aid for 
Trade can make a contribution to the achievement of the 2030 Sustainable Development Agenda. 
Responses from partner countries showed a higher percentage of the opinion that Aid for Trade could 
contribute to affordable and clean energy (5 0% of partners, 40% of donors) and responsible 
consumption and production (56% of partners, 46% of donors).  
4.4.  The 2019 monitoring exercise showed  growing interest  among donors  in utilizing Aid for Trade 
to promote sustainability . This trend corresponds  with the stable flows of environment -focused  aid 
over recent years  as covered by the OECD's Credit Reporting System Database . Particularly, o ver 
the period 2006 -2016, there have been steady aid allocations towards the so -called "Rio 
Conventions " – the UN Framework Convention on Climate Change, the Convention on Biological 
Diversity and the UN Convention to Combat Desertification.34 Some donors have also included 
commitments towards sustainability in their development  policies. For instance, some donors have 
recently  pledged to halt support for investments in new coal mining and coal -fired power station  
projects . Some donors have been supporting the development of green value chains and seeking to 
integrate sustainable development approaches into t heir trade and development policies in other 
ways.  
4.5.  Past examples of Aid for Trade facilitating a circular economy transition exist. For instance, 
Aid for Trade has been utilized to develop waste -paper recycling infrastructure, bio -fertilizer 
 
32 Forti V., Baldé C.P., Kuehr R., Bel G. The Global E -waste Monitor 2020: Quantities, flows and the 
circular economy potential . 2020. United Nations University (UNU)/United Nations Institute for Training and 
Research (UNITAR) – co-hosted SCYCLE Programme, Internationa l Telecommunication Union (ITU) & 
International Solid Waste Association (ISWA), Bonn/Geneva/Rotterdam.  
33 Ibid. 
34 WTO and UNEP . Making trade work for the environment, prosperity and resilience . 2020.  
Retrieved from: https://www.wto.org/english/res_e/publications_e/unereport2018_e.pdf . WT/COMTD/AFT/W/87  
 
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  capacity , re-manufacturing facilities  and safety standards for product repurposing  in developing and 
LDC Members. Case studies could be developed to highlight the reach of such initiatives.  
Possible issues for consideration in monitoring  and evaluation : 
• How are sustainable development and circular economy approaches being integrated into 
Aid-for-Trade policies of donors and south -south partners  and mainstreamed into the design, 
monitoring and evaluation of Aid -for-Trade projects ? What role does technology transfer 
play in this regard?  
• Are there examples of how Aid for Trade is supporting the formation of positive feeder loops 
in developing countries?  Have Members identifi ed best practices that can be shared?  
• What policy frameworks support the sustainable trade and circular economy  approaches ?  
5  CONCLUSIONS  
5.1.  This Issues Paper provides a framework through which to  understand the interaction between 
sustainable trade, circular economy , and Aid for Trade . The purpose of the issues paper is to 
elaborate  issues for consideration in the context of the monitoring and evaluation exercise that will 
underpin the 2022 monitoring and evaluation exercise, and the Aid for Trade Global Review . 
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  ANNEX 1: 2030 AGENDA TARGETS FOR RESPONSIBLE CONSUMPTION AND PRODUCTION  
12.1 Implement the 10 -year framework of programmes on sustainable consumption and 
production, all countries taking action, with developed countries taking the lead, taking into 
account the development and capabilities of developing countries  
12.2 By 2030, achie ve the sustainable management and efficient use of natural resources  
12.3 By 2030, halve per capita global food waste at the retail and consumer levels and reduce 
food losses along production and supply chains, including post -harvest losses  
12.4 By 2020, a chieve the environmentally sound management of chemicals and all wastes 
throughout their life cycle, in accordance with agreed international frameworks, and significantly 
reduce their release to air, water and soil in order to minimize their adverse impact s on human 
health and the environment  
12.5 By 2030, substantially reduce waste generation through prevention, reduction, recycling and 
reuse  
12.6 Encourage companies, especially large and transnational companies, to adopt sustainable 
practices and to integ rate sustainability information into their reporting cycle  
12.7 Promote public procurement practices that are sustainable, in accordance with national 
policies and priorities  
12.8 By 2030, ensure that people everywhere have the relevant information and awa reness for 
sustainable development and lifestyles in harmony with nature  
12.A Support developing countries to strengthen their scientific and technological capacity to 
move towards more sustainable patterns of consumption and production  
12.B Develop and im plement tools to monitor sustainable development impacts for sustainable 
tourism that creates jobs and promotes local culture and products  
12.C Rationalize inefficient fossil -fuel subsidies that encourage wasteful consumption by removing 
market distortions , in accordance with national circumstances, including by restructuring taxation 
and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, 
taking fully into account the specific needs and conditions of developing co untries and minimizing 
the possible adverse impacts on their development in a manner that protects the poor and the 
affected communities . 
Source: United Nations  
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