The extraction and processing of over 100 billion tonnes of natural resources each year drives half of global carbon emissions and 90 percent of terrestrial biodiversity loss. This linear production–consumption model—extract, manufacture, use, discard—has also entrenched social inequities. Resource consumption and wealth accumulation are concentrated in the Global North, while the Global South bears the brunt of environmental degradation and health impacts. Engineers and technologists increasingly recognize that such a system is both environmentally and socially unsustainable.
The circular economy offers a systemic alternative. Instead of a one-way flow of materials, it maintains resources in circulation by regenerating, retaining, or enhancing their value. This approach addresses the 45 percent of global emissions that cannot be mitigated solely through renewable energy and efficiency measures, while also supporting biodiversity and halting land degradation. In engineering terms, it’s a shift from throughput maximization to closed-loop optimization, requiring redesign of products, processes, and supply chains.
No nation can achieve this transformation in isolation. Modern economies depend on cross-border flows of materials, goods, and services. Circularity-enabling trade includes remanufacturing and recycling equipment, repair and leasing services, circular design expertise, affordable second-hand goods, secondary raw materials, non-hazardous waste for recovery, and regeneratively produced biomass. Collectively, these exchanges form what is increasingly referred to as “circular trade.”
Circular trade has expanded significantly. Between 2000 and 2019, the value of second-hand goods, secondary raw materials, and waste for recovery grew by more than 230 percent—from $94 billion to $313 billion—outpacing the 195 percent growth in overall global goods trade. Maintenance and repair services trade rose from $74 billion to $108 billion between 2015 and 2019. These figures underscore a growing market for engineering solutions that extend product lifecycles and recover materials at scale.
Yet regulatory and technical barriers persist. There is no globally recognized set of definitions, classifications, or interoperable standards for circular goods and services. Conformity assessment procedures vary widely, complicating cross-border movement of refurbished components or recycled feedstocks. Moreover, the circular economy is only weakly embedded in trade agreements, limiting cooperation on illegal waste flows, supply chain transparency, traceability, and mutual recognition of technical standards.
The imbalance in capabilities between the Global North and South further skews outcomes. High-income countries possess stronger digital trade infrastructure, better access to circular finance, and more advanced industrial capacity. Without deliberate policy to address inequality, these advantages risk creating a “circularity trade divide.” Data already show that about 45 percent of global trade in secondary goods, materials, waste, and scrap occurs exclusively between high-income countries, while only around 1 percent flows between low-income countries and middle- to high-income countries. At the same time, low-value or illegal waste often ends up in the Global South, where limited treatment capacity amplifies environmental and social harm.
For engineers, this divide is not an abstract policy issue—it shapes where and how circular technologies are deployed, which markets adopt advanced recycling systems, and who gains from innovations in materials recovery. Addressing it demands coordinated global action. Technical standards must be harmonized, digital traceability systems interoperable, and investment in circular infrastructure distributed more equitably. Collaborative frameworks could enable developing economies to participate fully in high-value segments of circular trade, rather than being relegated to waste processing under hazardous conditions.
An alliance of organizations from Africa, Southeast Asia, Latin America and the Caribbean, and Europe has developed a framework for inclusive circular trade. Its intent is to ensure that the transition to a circular economy is both fair and globally integrated. This involves embedding circularity into trade and economic cooperation agreements, fostering mutual recognition of standards, and building capacity in regions currently marginalized from high-value circular flows.
For those working at the intersection of engineering and policy, the challenge is clear: design systems, technologies, and trade mechanisms that close material loops without reinforcing existing inequities. The opportunity lies in aligning technical innovation with inclusive economic structures, ensuring that the benefits of circularity are shared across all regions.