The Concept of Virtual Water in the Context of International Trade: Water Content of Products as a Tool for Managing Economic Relations in the Context of Environmental and Security Challenges

In the current conditions of increasing water resource scarcity at the global level, the problem of rational use of water in various sectors of the economy is becoming particularly relevant. Control over the water content of products is becoming an effective tool for managing economic relations in the face of environmental and security challenges, which directly affects the issue of water security. The purpose of the study is to analyze the concept of virtual water as a tool for understanding the relationship between international trade and water resources management, to study its impact on the water security of countries in the context of globalization of economic relations. Research methods: systematic analysis of literary sources, comparative analysis of the water content of various sectors of the economy, statistical analysis of global flows of virtual water, case-study analysis of individual countries and regions. The study revealed that the concept of virtual water radically changes the understanding of international trade as an indirect exchange of water resources. Three main categories of virtual water have been identified: green (rainwater), blue (surface and groundwater for irrigation) and grey (water for dilution of pollutants). Agriculture is the largest consumer of water resources (70% of the world’s fresh water) and generates the highest volumes of virtual water trade — about 2,300 cubic kilometers annually. The industrial sector (20% of global water consumption) shows particularly high water content in the metallurgical, semiconductor and chemical industries. The energy sector is characterized by differentiated water content. The results of the study are important for the formation of national water and food security strategies. Countries with limited water resources can use agricultural imports as a tool to save their own water resources, while exporting countries should consider the impact of virtual water exports on their own water balance. The concept of virtual water transforms water diplomacy, expanding its subject matter from the management of transboundary water resources to the regulation of virtual water flows through trade, which creates new forms of interdependence between countries and requires the development of appropriate diplomatic mechanisms.