Trade and sustainable development

To address the climate, nature and inequality crises, we need a better understanding of how international trade rules can support, or undermine, sustainable development. A new IIED research theme aims to develop knowledge, relationships and research capacities to address this challenge.

June 2022 - June 2024
Laura Kelly

Director, Shaping Sustainable Markets

Men stand on lorries loading and unloading sacks at a busy market.

International trade rules can have significant impacts on local growers and markets (Photo: Bill Vorley, IIED)

As political momentum grows for transitioning towards low-carbon economies, governments, international agencies, civil society organisations and businesses are grappling with reorienting trade policies towards supporting sustainable development objectives.

For example, international trade and investment treaties increasingly feature provisions on climate, biodiversity, deforestation and labour rights. But questions remain about how trade policies can most effectively promote the social and ecological transitions needed.

Meanwhile, countries are enacting net zero commitments. In the absence of global carbon pricing, this is leading to calls for border carbon adjustments (CBAMs) and raising concerns about the trade and sustainable development prospects for poorer countries.

This project builds on and further develops IIED’s work on trade-related issues to make a distinct contribution to these debates, putting centre stage the environment and climate and the specific needs of the least developed countries (LDCs) and marginalised people in society.

What is IIED doing?

Our work in this project initially focuses on three themes.

Rethinking trade and investment agreements:

  • Inform international trade policy, for example, as regards investment dispute settlement, trade preference schemes or the integration of environmental and social issues in trade agreements
  • Monitor Economic Partnership Agreements (EPAs) with African, Caribbean and Pacific countries, as well as trade negotiations with other developing countries, and
  • Contribute to UN talks and World Trade Organization processes in areas such as fisheries subsidies, investment and integration of climate considerations.

More equitable national and international trade networks: 

  • Support equitable integration of small-scale/artisanal fishers and fish workers into national and export markets, and
  • Tell the story of women working as the main traders in the small-scale fisheries sector, spotlighting the challenges they face and the solutions they have developed in response.

Promoting trade and climate coherence:

  • Engage with LDCs on trade and climate negotiations
  • Inform the positions of major importing markets on CBAMs (a measure to ensure that imported goods pay a price for their carbon emissions that is comparable to the price paid by domestic producers) to consider the impacts on the LDCs, and
  • Inform ongoing debates on climate and investor-state dispute settlement (ISDS).

Additional resources

What can least developed countries and other climate-vulnerable countries expect from the EU Carbon Border Adjustment Mechanism (CBAM)?, Tim Gore, Eline Blot, Tancrede Voituriez, Laura Kelly, Aaron Cosbey, Jodie Keane (2021) IEEP Briefing paper

Project: Aligning climate and trade policy for LDCs and graduates (2021)

The contribution of small-scale artisanal fisheries and aquaculture to food systems, Cristina Pita (2021), Project material

EU-China Comprehensive Agreement on Investment: an appraisal of its sustainable development section, Lorenzo Cotula (2021), journal article in Business and Human Rights

Raising the cost of climate action? Investor-state dispute settlement and compensation for stranded fossil fuel assets, Kyla Tienhaara, Lorenzo Cotula (2020), IIED Research report

Subsidy reform and distributive justice in fisheries, Eugenia Merayo, Ina T Porras, Sarah Harper, Paul Steele, Essam Yassin Mohammed (2019), IIED Working paper

Fair fishing: supporting inclusive fiscal reform in fisheries, Ina T Porras (2019), IIED Toolkit

The cost of harmful fishing subsidies, Robert Arthur, Stephanie Heyworth, John Pearce, William Sharkey (2019) IIED Working paper

Reforming investor-state dispute settlement: what about third-party rights?, Lorenzo Cotula, Nicolás M Perrone (2019), IIED Briefing

UNCITRAL Working Group III: can reforming procedures rebalance investor rights and obligations?, Lorenzo Cotula, Terrence Neal (2019), Investment policy brief

Beyond trade deals: charting a post-Brexit course for UK investment treaties, Lorenzo Cotula, Lise Johnson (2016), IIED Briefing paper