International Trade and Circular Economy

Abstract

Trade is the growth engine of any economy. The global trade balances are itself on David Ricardo’s theory of Comparative Advantage, which suggests that a country shall export the commodity in which it can combine its resources efficiently. However, in different stages of food systems, natural resources like water and fossil fuel energy have a critical role. Thus, when commodities are traded, natural resources too are virtually traded. As the trade theories developed mainly on labour and capital as major resources, the thrust on natural capital remained weak as not many works focussed on their efficient quantification while calculating comparative advantage in trade.