Intra-EU agricultural trade, virtual water flows and policy implications

The development of approaches to tackle the European Union (EU) water-related challenges and shift towards sustainable water management and use is one of the main objectives of Horizon 2020, the EU strategy to lead a smart, sustainable and inclusive growth. The EU is an increasinglywater challenged area and is amajor agricultural trader. As agricultural trade entails an exchange of water embodied in goods as a factor of production, this study investigates the region's water–food–trade nexus by analysing intra-regional virtual water trade (VWT) in agricultural products. The analysed period (1993–2011) comprises the enactment of theWater Framework Directive (WFD) in the year 2000. Aspects of the VWT that are relevant for the WFD are explored. The EU is a net importer of virtualwater (VW) fromthe rest of theworld, but intra-regional VWT represents 46% of total imports and 75% of total exports. Five countries account for 60% of total VWimports (Germany, France, Italy, The Netherlands, Belgium) and 65% of total VWexports (The Netherlands, France, Germany, Belgium and Spain). Intra-EU VWT more than doubled over the period considered, while trade with extra-EU countries did not show such a marked trend. In the same period, blue VWT increased significantly within the region and net import from the rest of the world slightly decreased. Water scarce countries, such as Spain and Italy, are major exporters of blue water in the region. The traded volumes of VW have been increasing almost monotonically over the years, and with a substantial increase after 2000. The overall trend in changes in VWT does not seemto be in accordance with theWFD goals. This study demonstrated that VWTanalyses can help evaluate intertwining effects of water, agriculture and trade policies which are often made separately in respective sectors.