Lively discussion on COVID-19 recovery, Aid for Trade and circular economy – “aid for trade can play an important role in boosting economic growth while supporting sustainable development goals”

Lively discussion on COVID-19 recovery, Aid for Trade and circular economy – “aid for trade can play an important role in boosting economic growth while supporting sustainable development goals”

The Permanent Missions of Finland, Kenya, the Netherlands and the International Trade Centre (ITC) held in collaboration with the African Development Bank (AfDB), the Finnish Innovation Fund Sitra and the Institute of European Environmental Policy (IEEP) a session at the WTO Aid-for-Trade Stocktaking Event on March 24 2021. The session focused on how aid for trade can support sustainable economic recovery from the Covid-19 pandemic and transition towards circular economy. The idea was to have different perspectives such as government and inter-governmental, private sector and research, on the topic.

The distinguished panelists at the event(Link to another website.) included H.E. Dr. Cleopa Kilonzo Mailu, Ambassador Extraordinary and Plenipotentiary Permanent Representative of the Republic of Kenya to the United Nations Office in Geneva and other International Organizations in Switzerland, Professor Anthony Nyong, Director for Climate Change and Green Growth at the African Development Bank, Mr. Kari Herlevi, Project Director at the Finnish Innovation Fund Sitra, Robert Koech, Managing Director of Siomo Tea Factory, and Ms. Colette van der Ven, International Trade Lawyer and Founder of TULIP Consulting. The moderator of the session was Ms. Marianne Kettunen, Programme Manager at IEEP.

In Kenya, circular economy is seen as one potential solution for eliminating and reducing poverty and environmental shocks, said H.E. Ambassador Dr. Cleopa Kilonzo Mailu. Actually, circular economy is one of the focus areas in the country now and for example a sustainable waste management policy is being finalized by the government. In order to boost sustainable development, Ambassador Mailu highlighted the importance of cooperation between government and private sector. The Covid-19 pandemic is a threat for the transition towards circularity as there is a risk of post-pandemic overproduction that goes against sustainable development. Ambassador Mailu called for cooperation and collective action in preparing for new pandemics and similar crises and emphasized the need to support vulnerable groups that have been most effected by the pandemic.

Circular economy and recycling are not new concepts in Africa. Professor Anthony Nyong said that it was typical that for example used clothes moved from older siblings to younger siblings when growing up. In the context of developing circular economy further, he highlighted that action plans must be made within country specific context, as there is huge variation in production and consumption habits between people in different geographical areas. The African Development Bank is supporting transition towards sustainable options and with the help of Finland, it has been able to establish a 4 million euro facility, which aims to support African countries in their transition towards circular economy. According to Professor Nyong, one of the biggest problems in African economy is the low participation rate in global trade despite the African Continental Free Trade Agreement that in fact creates the largest free-trade area in the world. In his view, Aid4Trade can help especially in building non-physical infrastructure to facilitate development. Professor Nyong praised Finland and Sitra’s cooperative, case-specific approach in supporting circular economy transition in the whole continent instead of working only with some countries.

Mr. Kari Herlevi from Sitra introduced a road map to a circular economy, which Finland drafted and implemented as the first country in the world. The road map acts as a catalyst of change as it compiles the essential and practical changes and actions required for the transition towards circular economy. Therefore, it also acts as a long-term strategy as it makes the direction that a country wants to take visible. Furthermore, Mr. Herlevi also presented Sitra’s new guidebook(Link to another website.) on how to create circular economy road map. The guidebook shares hands-on experiences from Finland and serves as a concrete tool that can be used by any country to develop their own strategy towards transition to circular economy. Mr. Herlevi emphasized that Aid4Trade offers great opportunities to support circularity and development goals e.g. by increasing awareness and trade opportunities.

Managing Director of Siomo Tea Factory, Mr. Robert Koech, described concrete opportunities and benefits that circular economy can bring to small and medium-sized companies in developing countries. He raised different examples of circular production methods that Siomo Tea Factory located in Kenya has created: an automated withering system that not only uses less energy in tea processing, but also improves tea quality. In addition, the firewood that is burnt to create steam is used as a fertilizer later on in the form of ash. These actions will also reduce the costs of production. There are many opportunities for SMEs to engage in circular practices but challenges remain, for example non-availability of technology, lack of policy frameworks and government support, and lack of knowledge. According to Mr. Koech, the biggest risks of the current pandemic for companies like Siomo are disruptions in supply chains. For example, the company is dependent on farmers’ ability to provide tea leaves as otherwise there is simply nothing to process. Alternatively, large negative demand shocks that might emerge as a response to a lockdown will create difficulties for tea distribution. Mr. Koech, whose tea factory has benefitted from support of ITC under the circular production component of the MARKUP programme, said Aid4Trade could help companies especially to find new ways to develop existing skills to become more efficient. 

International trade lawyer and Founder of TULIP Consulting, Ms. Colette van der Ven, talked about her report on implications, opportunities and challenges of circular economy in developing countries(Link to another website.). The Permanent Mission of Netherlands in Geneva commissioned the report. Pollution causes problems in many cities but as it also creates health problems, there are great risks for developing countries facing population growth. Circular economy can provide solutions to these kinds of problems. Moreover, it can also be economically profitable as it offers a way to deviate from expensive inputs and provides completely new employment opportunities as new sectors are emerging. As more countries move towards circular economy and sustainable development, it becomes also more attractive for an increasing number of countries to produce goods that fulfill the standards. Through this, free access to markets that would otherwise be expensive could be possible. According to Ms. Colette van der Ven it is essential that Aid4Trade is aligned with other initiatives and domestic priorities so that it doesn’t become an isolated entity. 

To sum up, all speakers agreed that Aid for Trade can play an important role in boosting economic growth while supporting sustainable development goals. However, it was recognized that challenges also exist. The transition to circular economy must be managed well. Education, research and development, and cooperation and synergies between countries are key in this context. They can address trade-related constraints and challenges around green economic transition (e.g policy framework, non-availability of technology, government support, and lack of knowledge – particularly in developing countries), but also to tap into new trade opportunities as new sectors are emerging (e.g innovative and sustainable materials, waste management, etc). The lively discussion during the event showed that there is great interest towards this topic. 

The discussion continues in the webinar series on various aspects related to trade and Circular Economy hosted by the Finnish Mission. The webinar series started with an event on Circular Economy and Services Trade on March 4 2021 and continued with an event focusing on sustainable business and circularity on March 29 2021. In addition, the discussions will feed into the ongoing processes at the WTO, the World Circular Economic Forum (WCEF), among others, and its next high-level meeting(Link to another website.) on 15 and 16 April 2021. This meeting will address the connection between the circular economy and climate and is hosted by the Ministry of the Environment and the Ministry of Foreign Affairs of the Netherlands and Sitra.