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Global value chains and international water security: a critical study

IWRA World Water Congress 2017 - Cancun Mexico
3. Water security in a changing world
Author(s): Kleverton Melo de Carvalho
Maria Elisabete Pereira dos Santos

Kleverton Melo de Carvalho
Federal University of Bahia
kleverton-carvalho@uol.com.br
Maria Elisabete Pereira dos Santos
Federal University of Bahia
betesantos28@gmail.com


Keyword(s): Global value chains, international water security
Article: Oral:

Abstract

This study discusses water security within global value chains (GVCs). GVCs refer to the cross-border flows of goods, investments, services, know-how and people involved with international production networks. Secondarily, the work seeks to:    (i) problematize the role of international trade in the current scenario of water security; (ii) explore the impacts of virtual water (VW) trade in water security within GVCs; (iii) discuss practices of corporate environmental responsibility that can enhance water security; (iv) evaluate Transatlantic and Transpacific Agreements concerning GVCs and potential impacts of these in international water security. Considering the descriptive and exploratory nature of the paper, qualitative procedures were used, through a content analysis. Articles were used from newspapers, academic papers and official documents, particularly the World Trade Organization (WTO) annual reports. From the article’s main observations, the following can be highlighted:  (i) the water security issue began to make inroads in international trade, driven by issues more related to agriculture, in which water is most commonly used to produce exported goods. This happens because of the long distance transfer of AV, which is defined as the amount of water that has been used to produce goods;  (ii) the review of benefits generated by the exportation process of VW is strategic and urgent for numerous countries, mostly because many importing countries do not have enough water resources in their territories. In recent years, VW circulation has been increasing due to increased exportation from agricultural countries. For this reason, the theme "virtual water” and “water security" should be included in the debate on food security established by WTO in the Bali Trade Agreement (2013), taking into consideration the Doha Round. Finally, there are two analytical perspectives that represent a paradox: (iii) the participation in GVCs has strengthened the implementation of a stronger regulatory frame in domestic environmental laws and governance (including water) by countries, reducing the negative impacts and the risks of participation in GVCs. Furthermore, company-leaders of GVCs have imposed regulations for water security in their chains as a strategic decision. This strategy could be seen in some of the companies in the food, textile and personal hygiene sectors;    (iv) on the other hand, the Transatlantic and Transpacific Agreements, although strengthening GVCs, require a deeper discussion regarding water security. These agreements tend to give greater emphasis to environmental self-regulation, based on voluntary mechanisms and an in-state investors system. This approach favors businesses in opposition of internal environmental regulations. Consequently, there are some risks regarding the reduction of international water security because:  (i) the increasing trade of agricultural products in GVCs, stimulated by Transatlantic and Transpacific Agreements; (ii) the reduction in domestic regulatory protection for water in participating countries of the mentioned agreements.

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