The Trade and Water Nexus

Abstract

Understanding the impact of international trade on the use of water resources provides a set of interesting ideas and concepts to further strengthen the global sustainable development agenda. This paper investigates and devises the direct and indirect links between international trade and water resources. It shows that with the right domestic policies and international trade system, trade in water-related services as well as the transfer of innovation and technologies can efficiently contribute to the goal of achieving access to water, sanitation, and hygiene (Sustainable Development Goal 6). Indirectly, international trade in goods also affects water usages. Through a discussion of the concept of virtual water, this paper illustrates how countries are relying on international trade to source products from abroad for domestic production that would otherwise put further strain on their water resources. With the right policies, data collection, and accounting methods in place, trade in goods may be a powerful tool to help alleviate the water crisis across countries and regions.