• Trade liberalisation can support sustainable development
• If paired with policies promoting fair distribution, environmental protection, and inclusivity
• US trade policies contradict sustainable development goals

Trade has been integral to our survival throughout human history. From the earliest trade networks for obsidian and flint; to silk and spices along Asia’s Silk Road; to rare earth metals and digital services driving today’s global economy.

Particularly within the agriculture and food sector, trade ensures different populations of people have what they need to survive and thrive. This is because many countries face challenges when it comes to what they can produce themselves.

Tuvalu, a small island nation in the Pacific Ocean, for example, has very little soil, so it depends on imports to bring enough food into the country. Due to urban development limiting farmland, Singapore only produces around 10% of its food. The rest relies on trade imports. And the UK has to import around 40% of its food to ensure there is enough to feed its population.

Trade can also be used as a source of control and punishment. President Trump’s imposition of a 50 percent tariff on India as a punishment for its purchases of discounted Russian oil, for example is one of a series of tariffs the US president has imposed on countries around the world since he entered the White House in January.

But trade can do so much more than ensure enough food is where it is needed, or be used as a weapon in trade wars; it can also be used as a tool to advance sustainable development.

Trade is a tool, not a barrier

Trade liberalisation can, in fact, support sustainable development, according to recent research funded by the European Union and led by Corvinus University of Budapest.

The research project, Trade4SD (Trade for Sustainable Development), explored how international agri-food trade can support sustainable development. This included 13 partners from 10 countries, mainly in Europe, alongside Ghana and Vietnam.

The project aimed to generate evidence-based recommendations on how trade policy can support achievement of the UN’s Sustainable Development Goals (SDGs): a set of 17 goals addressing the world’s most urgent challenges. It was particularly focused on exploring sustainable development in food systems, rural livelihoods, climate change, and environmental integrity.

The research project found that making agri-food trade easier by removing or reducing trade barriers, such as tariffs and quotas, supports sustainable development. One of the reasons for this is that it’s then easier for developing countries to participate in global markets and value chains. This gives countries access to larger markets, better technologies, and diversified sources of income.

However, the project has faced some challenges.

Project leader Attila Jámbor, head of the Institute for Sustainable Development at Corvinus University, acknowledges that US trade policies run counter to the aims of the TRADE4SD project. “The US government is focused solely on promoting its own interests, while our project is about trying to consider global ones,” he says. “You can’t achieve sustainability without global cooperation. Trade is a tool, not a barrier.”

Liberalisation: opportunity and risk

But trade liberalisation alone does not automatically lead to sustainability, TRADE4SD highlights.

While it can provide access to new markets and resources, it must be paired with the right regulatory, financial, and institutional frameworks; policies that ensure fair distribution of benefits, protect the environment, and help disadvantaged groups (such as women and smallholders) participate in global markets.

Without well-designed accompanying trade policies, liberalised trade can increase inequality, environmental degradation, or carbon leakage.

“Trade liberalisation can support sustainable development if it creates incentives for inclusive economic growth, environmentally responsible production, and better livelihoods, particularly in lower-income countries. However, the impact depends on the design of trade policies and the presence of complementary measures,” explains Jámbor.

For example, when import tariffs are lowered for sustainably certified coffee in Vietnam, this incentivises the coffee producers to promote environmentally friendly production. It also increases incomes for smallholder farmers as they can more easily afford to enter EU markets.

In Ghana, liberalisation of the cocoa trade combined with voluntary sustainability standards has led to better labour conditions, gender inclusion, and reduced deforestation, if farmers are supported with knowledge sharing and infrastructure.

Smallholders in Ghana highlight the importance of rural roads, affordable certification schemes, and access to microfinance as preconditions for sustainable participation in export markets.

When it comes to knowledge sharing, training in sustainable production techniques, digital tools, and market requirements helps producers meet standards and improve resilience. This has been beneficial for Tunisia’s olive oil sector – technical support from EU development programmes has helped producers meet export criteria while adopting water-saving technologies.

Evidence from female farmers

Interestingly, Farms led by women were found to consistently achieve higher eco-efficiency scores compared to those led by men, producing goods with less environmental impact, the Corvinus University of Budapest research highlighted.

The researchers concluded that, policies that enable female farmers to more easily participate in global trade markets should have a positive impact on the environment.

Although recommendations from the TRADE4SD project are primarily aimed at EU policymakers, they are also relevant for national governments as they shape their trade and agricultural policies.

Sustainability in trade is possible – if there is global cooperation across borders that allows different nations to align their trade policies, empower disadvantaged communities, and share responsibility for achieving the SDGs.

By, Kyle Grizzell

Interested in this topic? You might also like this…