Making Trade Easier Supports Sustainable Development

Trade can play a positive role in advancing sustainable development — but only when accompanied by regulatory, financial, and institutional frameworks.

This was the finding of the TRADE4SD project, a European Union Horizon 2020 research initiative designed to generate evidence-based recommendations on how trade policy can better support achievement of the Sustainable Development Goals (SDGs), particularly in relation to food systems, rural livelihoods, climate change, and environmental integrity.

Led by a consortium of European and international research institutions, the project ran from 2021 to 2025 and combined economic modelling, field research, case studies, and stakeholder engagement across Europe, Africa, Asia, and the Mediterranean.

Although the project highlighted the value of liberalised trade in providing access to new markets and resources, it showed trade can also increase inequality, environmental degradation, or carbon leakage if safeguards are lacking.

In essence, trade alone is not enough. Trade policies can be powerful tools that support sustainable development when structured to reinforce rather than undermine environmental protection, social equity, and economic opportunity.

How trade supports sustainable development

Firstly, trade enables developing countries to participate in global value chains, giving them access to larger markets, better technologies, and diversified sources of income. For example, farmers in Ghana exporting cocoa under certified sustainability standards benefit not only from price premiums, but also from improved working conditions, training, and environmental safeguards.

Secondly, trade can promote the diffusion of green technologies and sustainable practices. Through the import of environmentally friendly machinery or the export of sustainably produced goods, countries can accelerate their transition to climate-resilient and resource-efficient systems.

Thirdly, trade agreements can embed sustainability clauses, such as commitments to uphold labour rights, environmental standards, or climate targets. This is increasingly common in recent EU trade agreements, although enforcement remains a challenge.

TRADE4SD also highlighted that trade can cause harm if not well managed. Examples include deforestation linked to export-driven agriculture, or the marginalisation of small producers who cannot meet stringent export standards. Therefore, to support sustainable development, trade must be inclusive, fair, transparent, and embedded in broader policy coherence.

Best conditions for sustainable livelihoods

TRADE4SD identified several enabling conditions for agri-food producers to thrive sustainably, particularly in trade-integrated sectors:

• Secure access to markets and fair prices: This requires trade policies that reduce entry barriers while preventing price volatility and unfair competition. For example, Vietnamese coffee farmers benefit from EU market access through the EVFTA, but only succeed when they are also part of cooperatives that enhance bargaining power and ensure quality standards.
• Supportive infrastructure and finance: Smallholders in Ghana and Tunisia highlighted the importance of rural roads, affordable certification schemes, and access to microfinance as preconditions for sustainable participation in export markets.
• Capacity-building and knowledge transfer: Training in sustainable production techniques, digital tools, or market requirements helps producers meet standards and improve resilience. In Tunisia’s olive oil sector, technical support from EU development programmes has helped producers meet export criteria while adopting water-saving technologies.
• Inclusion of women and youth: Ensuring that trade and agricultural policies are gender-sensitive and inclusive is key to long-term sustainability. TRADE4SD found that empowering women in value chains (e.g., through land rights or training) leads to broader community benefits.

Why trade matters for development

Trade connects regions and countries, allowing them to specialise in what they do best, exchange goods and services, and share innovation and knowledge. This creates efficiencies, drives economic growth, and supports job creation. For many low- and middle-income countries, trade is a primary vehicle for poverty reduction and development.

At the global level, trade helps ensure food availability and diversity, especially as climate change makes food systems more fragile. For example, trade flows between regions can help balance supply shocks, such as exporting rice from Asia to regions experiencing drought.

At the regional level, trade agreements can strengthen cooperation, attract investment, and harmonise standards, which benefits producers and consumers alike. In Africa, the African Continental Free Trade Area (AfCFTA) aims to boost intra-African trade while supporting sustainable industrialisation.

At the local level, producers connected to export markets often earn more, invest in education or sustainability, and build stronger cooperatives. But only if they have agency; the ability to influence the terms of trade and access necessary support.

The quality of governance, the fairness of trade rules, and the extent of local empowerment all determine whether trade truly contributes to sustainable development.

Looking to the future

To ensure trade genuinely supports sustainable development, TRADE4SD recommends action in several areas:

• Modernising multilateral trade rules: The World Trade Organization should recognise sustainability objectives as integral to trade governance. This includes reforming dispute mechanisms, clarifying the treatment of voluntary sustainability standards, and ensuring developing country participation.
• Strengthening sustainability in trade agreements: The EU and other global actors should integrate enforceable sustainability provisions into their trade deals, along with technical support and monitoring tools.
• Investing in enabling conditions: Infrastructure, education, digitalisation, and finance must be scaled up to help small producers comply with trade standards and benefit from global value chains.
• Enhancing policy coherence: Agricultural, climate, trade and development policies must work together. For example, climate measures like CBAM (Carbon Border Adjustment Mechanism) should be accompanied by support to affected producers in third countries.
• Putting equity and inclusivity at the centre: Trade must serve people — not just GDP. This requires gender-sensitive trade policies, inclusive governance, and recognition of local knowledge and rights.

TRADE4SD’s legacy is not only a set of technical recommendations, but also a model for participatory, integrated research. It shows that sustainability in trade is possible if we align policies, empower communities, and share responsibility across borders.