29 Jun 2011
Virtual Water Trade and International Trade Law
NCCR Trade Regulation Working Paper No. 2011/15, authored by Fitzgerald Temmerman.
More efficient use of fresh water will be crucial in mitigating increased competition over this scarce resource, which is predicted to be substantially accentuated by climate change. The water footprint of a commodity indicates the total amount of water which was used to produce this commodity at a certain place, and is considered to be virtually embedded in this commodity. Based on the water footprint concept, the ‘global water saving’ concept emerged, indicating that a certain amount of fresh water could be saved through trade in virtually embedded water or so-called ‘virtual water trade’. At present, agriculture accounts for approximately 70 % of global fresh water use. Looking into the water footprint data on agricultural commodities, one could thereby assume that if water-intensive crops were primarily produced in water-rich regions and subsequently traded to the more water-stressed regions, a significant amount of fresh water could be saved in the latter. In this regard, there are three highly relevant topics under the WTO international trade law framework: the legal status of irrigation (and related) subsidies under the Agreement on Agriculture, the possibility of using non-product related process and production methods as a criterion to distinguish between otherwise ‘like’ products, and the legal status of private voluntary water footprint labelling under the TBT Agreement.