Water Security of Nations: How International Trade Affects National Water Scarcity and Dependency

Import of water in virtual form, i.e. in the form of agricultural and industrial commodities, can be an effective means for water-scarce countries to preserve their domestic water resources. On the other hand, export of water-intensive commodities will increase the use and thus the scarcity of water in the exporting countries. Another likely effect of international trade is that it increases dependency of nations that are net importers of water-intensive commodities on net exporters. This paper reviews the following questions: how relevant is international trade in magnifying water scarcity in some nations and in alleviating water scarcity in other nations, and to which extent does international trade contribute to national water dependency?

It is shown that the current global trade pattern significantly influences water use in most countries of the world, either by reducing domestic water use or by enhancing it. In the period 1997–2001, 16% of the water use in the world was not for producing products for domestic consumption but for making products for export. Many of the water problems in the export countries are partially related to their export position. On the other hand, domestic water savings can be enormous for the import countries, i.e. the countries that have partly externalized their water footprint. Jordan annually imports a virtual water quantity that is five times its own yearly renewable water resources. Although saving its domestic water resources, it makes Jordan heavily dependent on other nations, for instance the United States. Other water-scarce countries with high virtual water import dependency (25–50%) are for instance Greece, Italy, Portugal, Spain, Algeria, Libya, Yemen and Mexico.

It is suggested that future national and regional water policy studies include an assessment of the effects of trade on water security. For water-scarce countries, it would also be wise to do the reverse: study the possible implications of national water scarcity on trade. In water-scarce countries a trade-off is to be made between (over)exploitation of the domestic water resources in order to increase water self-sufficiency (the apparent strategy of Egypt) or virtual water import at the cost of becoming water dependent (Jordan).