Environmental Engineering Reference
In-Depth Information
8
The relation between international trade and
water resources management
A.Y. Hoekstra
Unlike oil, water is generally not regarded as a global resource. Whereas in most coun-
tries the energy sector has an obvious international component, this is di
erent for the
water sector. The international component of water is recognized only in the case of trans-
boundary rivers. The relation between international trade and water management is gen-
erally not something that water sector o
ff
cials think about. The reason is that water is not
traded internationally, due to its bulky properties. Besides, there is no private ownership
of water, so that it can also not be traded as in a market (Savenije, 2002). Water sector spe-
cialists often forget, however, that water is traded in virtual form, i.e. in the form of agri-
cultural and industrial commodities. Although invisible, import of 'virtual water' can be
an e
ective means for water-scarce countries to preserve their domestic water resources
(Allan, 2001a).
Water sector specialists do not usually explicitly study the relation between water use
and import or export. At the same time, trade specialists and economists engaged in or
studying international trade generally do not bother much about the implications of inter-
national trade for the water sector. The reason here is that the water inputs generally
hardly contribute to the overall price of traded commodities. This seems to justify the con-
clusion that water cannot be a signi
ff
uencing trade patterns. The fact that
water inputs are generally heavily subsidized by national governments is hereby ignored.
Trade specialists also tend to forget that external e
fi
cant factor in
fl
ff
ects of water use can be very
signi
cant, but are never included in the price of water, and that no country charges a
scarcity rent for water inputs even though water is sometimes very scarce. When one
merely looks at the prices of traded commodities one will indeed get the impression that
water scarcity cannot be a driving force of or limiting factor to international trade.
One of the principles widely accepted in water resources management is the subsidiar-
ity principle, according to which water issues should be settled at the lowest community
level possible (GWP, 2000). In cases where upstream water users a
fi
ect downstream users,
it has been recognized that it is necessary to take the perspective of a river basin as a whole,
considering water as a river-basin resource. Regarding water as a global resource is very
uncommon. To illustrate this, read what the Global Water Partnership writes about how
to come towards good water resources management (GWP, 2000, pp. 28 and 33):
ff
In order to achieve e
cient, equitable and sustainable water management . . ., a major institu-
tional change will be needed. Both top-down and bottom-up participation of all stakeholders will
have to be promoted - from the level of the nation down to the level of a village or a municipal-
ity or from the level of a catchment or watershed up to the level of a river basin. The principle of
subsidiarity, which drives down action to the lowest appropriate level, will need to be observed.
There is no word about the fact that there might be a global dimension to water
management.
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