In response to US President-elect Donald Trump’s increasingly hostile rhetoric and threats of imposing a 25% tariff on Canadian goods, Canada and its allies must urgently investigate new international trade policy. Trump’s proposed tariffs have the potential to hinder trade and harm the economy if left uncontrolled.
The World Trade Organisation and its members can lessen the potential negative effects of impending American measures by diversifying commerce with other countries and promoting international trade through the circular economy.
A variety of stakeholders, including consumers, businesses, governments, non-governmental organisations, and academia, must collaborate to transition from a linear economy (buy, use, throw away) to one that recycles materials and energy.
In addition to damaging the environment, wasting energy and resources is getting more and more costly, which makes creating a circular economy crucial. To solve these economic, security, and environmental issues, industries must prioritise the development of circular systems. For the benefit of our natural environment and financial stability, a cross-sector effort is required to enhance circularity.
Growing international trade
One of the most visible examples of the effects of waste is the five ocean garbage patches, which are massive, floating islands of trash. Municipal services in wealthy countries often hide trash from view, making it easy to ignore its detrimental impact on the environment. However, many developed countries, like Canada, export their waste to less developed countries that are ill-prepared to deal with the issue.
Occasionally, the actions of other countries can force developed nations to adapt. China’s restrictions on some waste types forced developed countries to manage their own waste instead of exporting it. This has created opportunities for creative commercial activities in addition to improved recycling.
In the opinion of Deborah de Lange, Associate Professor, Global Management Studies, Toronto Metropolitan University, the countries must process waste materials and creatively transform them into items for sale. Therefore, the circular economy makes it possible for consumers to buy new, environmentally friendly products.
Increasing global trade by using garbage instead of discarding it gives rising and developing economies the chance to participate in more international trade.
They can start new businesses that take advantage of the circular economy’s worldwide business opportunities. For emerging and growing economies, having multiple sources of revenue and employment is more crucial than ever.
Additionally, the circular economy stimulates corporate activity and the creation of new companies by encouraging collaboration among firms. It will create employment opportunities and save materials and energy.
International trade and circularity
Europe has led the way in advancing the circular economy as part of the European Green Deal. Italy is a particularly noteworthy example.
Italian legislation has promoted the development of eco-industrial parks, where local companies collaborate on sustainable business practices, such as selling material outputs to one another to reduce waste.
Italy has also developed initiatives on research, clean production, distribution, and post-consumption waste to integrate circularity into its economy. For example, Italy used corporate tax incentives to encourage the use of recycled and biodegradable materials in products and packaging while penalising virgin materials used in construction.
Research programmes like Circular Threads, which target the Northern Italian textile industry, involve even the fashion sector. Through the Circular Consumption Charter, consumer groups have voiced their support, with the backing of eighteen Italian consumer associations.
“However, in order to connect investing in circular business models to actual financial rewards, European enterprises still require more accurate economic data,” De Lange stated.
Using data from all 27 European Union (EU) countries over several years, she found a direct link between the use of circular materials and global exports of the three main types of waste: plastics, metals, and chemicals.
The EU monitors the annual consumption rates of circular materials in each country. In the opinion of de Lange, greater national circularity across all material categories is the driving force behind the international trash and scrap trade. In other words, countries with higher rates of circularity engaged in more international trade.
Boosting innovations
Policy frameworks must penalise environmental degradation and encourage investment to advance the circular economy. A carbon fee, for instance, not only deters pollution but also provides funding for circular practice research and innovation. Governments can encourage companies to switch from linear to circular business models by coordinating fiscal policies with environmental objectives.
Other countries, including Canada, can follow the guidelines provided by the European Union’s Circular Economy Action Plan, which includes policies like expanded producer responsibility and eco-design standards. In addition to reducing waste, policies requiring manufacturers to return and recycle their products at the end of their lives also encourage product design innovation.
A new generation of professionals can be prepared to adopt sustainable behaviours by incorporating the concepts of the circular economy into academic programmes and career training. Public awareness campaigns can encourage consumers to seek eco-friendly items, creating a market-driven push for circularity.
New technologies that are revolutionising the circular economy include blockchain, artificial intelligence, and sophisticated recycling techniques. Blockchain guarantees openness and traceability in material movements, while artificial intelligence helps optimise supply chains to reduce waste. Chemical recycling is one example of an advanced recycling technology that may convert complex waste into reusable basic materials.
For example, the Clean Resource Innovation Network (CRIN) in Canada is using technology to increase resource efficiency and lower industrial emissions. Countries can establish themselves as leaders in the global circular economy by funding such projects.
Creating a Circular Economy
“My research indicates that both separately and in combination, circular economic policies, research, and innovation significantly improve nations’ industrial circular capabilities. The most effective of these strategies turned out to be strict environmental laws that charge polluters, much like carbon taxes,” De Lange commented.
EU promised to make data on circularity among its member states publicly available, with the potential of the nations benefitting from this level of collaboration. Cross-sector partnerships have also resulted in the establishment of successful eco-industrial parks.
A significant advancement that would enable more cross-border circular trade would be the expansion of these hubs. Canada is already a leader in this area. In the 1970s, Dalhousie University’s Eco-efficiency Centre helped establish this park, making it one of the largest in northeastern North America. There are over 2,000 firms and 30,000 employees. At the park, cooperative agreements have been used to trade metals, packaging, and rubbish from wooden pallets.
Burnside Park is just one example of how industrial ecology could contribute to Canada’s economic stability. To reduce its dependency on the United States, Canada must diversify its businesses and eco-industrial parks into other markets. Europe has become a vital partner as a result of initiatives like the EU’s Horizon Europe programme that promote global connections.
The World Trade Organisation may serve as a welcoming forum for growing discussions and initiatives focused on promoting the circular economy in order to distribute prosperity, improve the environment, and reduce tensions globally.
While consumers may favour a circular economy, businesses require substantial financial incentives to invest in this transformation. De Lange’s research offers compelling evidence that successful international markets reward companies that adopt circular practices. In light of possible global economic instability, Canada and its allies have a strong incentive to diversify and enhance the global economy through international trade in the circular economy.
Initiatives such as Halifax’s Burnside Industrial Park position Canada to take the lead in the circular economy. To reduce dependency on the United States, Canada must expand its eco-industrial efforts into international markets, leveraging partnerships with nations like those in the European Union.
Policy measures such as carbon taxes, extended producer responsibility, and eco-design directives are critical to fostering circularity. Public awareness, education, and innovation will further motivate change, creating opportunities for businesses that adopt sustainable practices to thrive in profitable global markets. This approach enhances environmental protection, economic stability, and international cooperation.