TRADE AND SUSTAINABILITY REVIEW

The document provides a multi-faceted analysis of how trade policies impact environmental and social sustainability. It highlights the new environmental provisions in the USMCA/T-MEC/CUSMA, the European Union's leadership in circular economy product policies, and the vulnerability of small island states' tourism sectors post-COVID-19. It also warns of rising non-tariff protectionism and discusses India's potential as a hub for electric vehicle battery recycling, while detailing the complexities of trade agreements in Latin America and the EU's proposed carbon border adjustment mechanism.

• The updated North American free trade agreement (CUSMA/T-MEC/USMCA) includes Chapter 24, which contains the most stringent environmental provisions ever included in a free trade agreement, committing parties to effectively enforce environmental laws in a manner that affects trade or investment.
• The European Union is advancing a circular economy transition through its Circular Economy Action Plan (CEAP), focusing on the design phase where 80% of a product's environmental impact is determined, and introducing digital product passports.
• Tourism is critical for Commonwealth Small States (CSS), contributing an average of 24.1% to GDP and 29.6% to employment between 1995 and 2019, but the sector suffered a severe collapse due to COVID-19, leading to a combined GDP drop of 6.9% for Small Island Developing States (SIDS) in 2020.
• Global protectionism is increasing, particularly through non-tariff barriers such as subsidies, national content requirements, and export restrictions, which surged during the COVID-19 pandemic.
• India is seeing rapid growth in electric vehicles, particularly in the two- and three-wheeler segments, which accounted for nearly 97.5% of EV sales; however, the country lacks a comprehensive regulatory framework for the end-of-life recycling of batteries.
• The European Union is planning a Carbon Border Adjustment Mechanism to prevent 'carbon leakage' by imposing a carbon price on imports from sectors like steel, aluminum, and cement, which has caused concern in the United States and Japan.
• Trade coalitions in Latin America are attempting to recover from a severe economic contraction in 2020, with the EU-Mercosur agreement remaining stalled due to EU demands for stronger guarantees against deforestation in the Amazon.

APA

Morgan, R. A., Sell, M., Kampel, K., Altenberg, P., Moerenhout, T., & Baliño, S. (2021). TRADE AND SUSTAINABILITY REVIEW. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-08/iisd-trade-sustainability-vol-1-issue-3-es.pdf

Chicago

Morgan, Richard A., Malena Sell, Kim Kampel, Per Altenberg, Tom Moerenhout, and Sofia Baliño. TRADE AND SUSTAINABILITY REVIEW. International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-08/iisd-trade-sustainability-vol-1-issue-3-es.pdf.

Wikipedia

{{cite report |last1=Morgan |first1=Richard A. |last2=Sell |first2=Malena |last3=Kampel |first3=Kim |last4=Altenberg |first4=Per |last5=Moerenhout |first5=Tom |last6=Baliño |first6=Sofia |title=TRADE AND SUSTAINABILITY REVIEW |publisher=International Institute for Sustainable Development |date=July 2021 |url=https://www.iisd.org/system/files/2021-08/iisd-trade-sustainability-vol-1-issue-3-es.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{morgan2021trade, author = {Morgan, Richard A. and Sell, Malena and Kampel, Kim and Altenberg, Per and Moerenhout, Tom and Baliño, Sofia}, title = {{TRADE AND SUSTAINABILITY REVIEW}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jul, url = {https://www.iisd.org/system/files/2021-08/iisd-trade-sustainability-vol-1-issue-3-es.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }