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Key Message

Trade has considerable potential as an engine for economic growth and sustainable development. Tapping into this potential requires appropriate policies at the domestic level - policies which address a range of issues from environment to infrastructure development to education.

Trade Policy and SD

How can the potential be achieved?

International trade, at trillions of dollars per year, is a huge potential force for sustainable development. By opening up new markets, exposing domestic firms to international practices, and bringing new investment and growth, trade can create the necessary conditions for poverty alleviation on a scale unreachable by dwindling traditional official development assistance flows.

But the potential is only potential, and depends on a number of factors for its successful achievement. It depends on capacity at the national level to implement policies that help growth-producing domestic firms take advantage of the opportunities offered. It also depends critically on the strength of the existing domestic regimes for environmental management, as trade-induced growth can have serious environmental impacts which, unmitigated, can render it unsustainable. Finally, it depends on the sharing of the benefits of trade, such that income inequalities are in fact lessened by growth.

IISD is involved in a number of initiatives aimed at ensuring that the potential becomes reality, with a particular focus on the outcomes for developing counties. They range in context from purely national-level exercises to regional analysis.

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