International market access
# 6 / 2020
05.11.2020

Why trade sup­ports rather than hin­ders sus­tain­able de­vel­op­ment

Introduction PDF

Thanks to global trade and for­eign di­rect in­vest­ment, peo­ple are doing much bet­ter today than they were in 1990. Global poverty has de­clined mas­sively, and qual­ity of life has in­creased dra­mat­i­cally. In the long term, trade also has a pos­i­tive ef­fect on the en­vi­ron­ment. Swiss com­pa­nies that ex­port, im­port or in­vest abroad are key play­ers in fos­ter­ing sus­tain­able de­vel­op­ment in the world. For this to re­main so, trade bar­ri­ers must con­tinue to be dis­man­tled in the fu­ture. Of cen­tral im­por­tance are the in­ter­gov­ern­men­tal or­gan­i­sa­tions (UN, OECD, WTO, etc.) that ne­go­ti­ate and de­velop sus­tain­abil­ity stan­dards. As in the past, Switzer­land should con­tinue to play an ac­tive role in these or­gan­i­sa­tions.

Content

Executive summary

Sustainability now has a high priority everywhere, and rightly so. Sustainable development is one of the greatest global challenges of our time. However, focusing solely on the environmental aspects of sustainability is insufficient. After all, sustainability also includes economic and social dimensions as well. Therefore, holistic solutions are required, and a strong involvement of business is the key to success in this area. After all, the UN considers international trade to be a driving force for sustainable development. 

Trade in goods and services and foreign direct investment reduce poverty, improve the quality of life of many people and have a long-term positive impact on the environment. This requires good governance in the individual countries and responsible companies. Thanks to their comparably high sustainability standards and premium products, Swiss companies contribute significantly to sustainable development in the world. They are among the most important foreign direct investors, especially in developing countries. This often involves a strong commitment to training and the transfer of modern technologies.

In order to be able to exert a positive influence in the future, Swiss companies must have unrestricted access to global markets. In a time of faltering multilateral trade liberalisation, countries increasingly rely on bilateral free trade agreements. These agreements are essentially economic agreements aimed at reducing trade barriers. Of central importance are also intergovernmental organisations (UN, OECD, WTO, etc.) which negotiate and develop sustainability standards. As in the past, Switzerland should continue to play an active role here.

Positions of economiesuisse

  • Cross-border trade and foreign direct investment have a positive impact on economic and social sustainability. Since 1990, they have led to enormous welfare gains around the world, lifting more than one billion people out of poverty, while also increasing life expectancy in the world’s poorest countries by an average of 13 years.
  • In the long term, world trade has a positive effect on the environment. However, in many countries there is still not sufficient recognition of environmental aspects.
  • With their comparatively high sustainability standards and the export of state-of-the-art technology and innovative products, Swiss companies promote sustainable development worldwide.
  • Global trade and free trade agreements alone do not create a balance between economic, social and environmental sustainability. But trade gains can and should be used to strengthen and better reconcile all three dimensions of sustainability.
  • A holistic approach is needed to strengthen sustainability: bilateral cooperation, regional solutions, international cooperation and multi- or plurilateral agreements can improve sustainability in all three dimensions in other countries, provided local political and economic institutions allow this to happen.

Contact and requests
Dr. Jan Atteslander