Overcoming the circularity divide: Accelerating a circular apparel transition in Africa through trade

Trade is central to advancing a global circular economy. Yet the benefits of circular trade remain unevenly distributed. While high-income countries dominate trade in circular and circular-enabling goods and technologies, low- and middle-income countries (LMICs) account for only a marginal share. This asymmetry risks creating a “circularity divide,” in which the environmental and economic gains of circularity accrue disproportionately to advanced economies.

Focusing on Africa’s textile and apparel sector, this paper explores how trade and trade agreements can help bridge this divide. The industry is emblematic of both the environmental urgency and development opportunity associated with circularity. Textile and apparel production remains largely linear, contributing significantly to greenhouse gas emissions and resource depletion. A circular transition through slowing, narrowing, and closing production loops could substantially reduce environmental pressures while generating economic value.

The paper identifies three strategic opportunities for Africa. First, promoting sustainable cotton production and exploring alternatives to cotton which could align environmental objectives with rural livelihoods and long-term industrial upgrading. Second, greening apparel manufacturing by reducing water and chemical use, investing in renewable energy, and adopting recycling technologies could enhance competitiveness in a changing global market. Third, repurposing and recycling second-hand clothing of which Africa is the world’s largest importer offers scope to create new industries, formalize informal activities, and develop fiber-to-fiber recycling capacity.

The analysis further examines how African countries can leverage multilateral and regional trade frameworks to advance these objectives. Within the World Trade Organization, options include engaging in discussions on environmental goods and services, clarifying the application of intellectual property rules to circular technologies, improving customs differentiation of second-hand clothing, and strengthening cooperation with the Basel Convention Secretariat. Targeted Aid-for-Trade support and technology transfer will be essential to enable industrial upgrading.

Regionally, the African Continental Free Trade Area (AfCFTA) can act as a circular enabler. By reducing tariff and non-tariff barriers, harmonizing standards, and facilitating investment and services trade, the AfCFTA can support the emergence of regional recycling hubs, vertical textile value chains, and eco-industrial parks.

The paper concludes that unlocking these opportunities requires a proactive and integrated strategy. Without a sector-specific circular roadmap aligned with trade policy, Africa risks both missing the development gains of circularity and falling behind in an industry increasingly shaped by sustainability standards.

This paper was published in the Journal of International Economic Law (Volume 27, Issue 4, 2024).