Net Virtual-Water “Flows”

Abstract

Global trade establishes an “invisible” and indirect link between water demand and water consumption sites. The literature on virtual-water “trade” has emphasised the options available to arid and semiarid countries to use international trade to deal with water resources scarcity (Allan 2003; Yang and Zehnder 2005; Chapagain et al. 2006a; Ma et al. 2006; Comprehensive Assessment of Water Management in Agriculture 2007; Yang and Zehnder 2007; Aldaya et al. 2008a, b; Novo et al. 2009). However, determining whether this strategy is economically and environmentally efficient will depend on whether the real opportunity cost of water resources is properly internalised, and whether the trade is actually based on differences in competitive advantage among trading partners. It is also doubtful that “virtual-water trade” is termed a “strategy”, because no government or agent pursues it directly. Rather, it is a process that is naturally linked to trade and the exchange of goods, with the exception of Arid and Semi-Arid countries in the Middle East and North Africa ({MENA}) region.