Trade and sustainable development

107. In the EU, mainstreaming sustainability with its social and environmental dimension in all relevant policies is a basic requirement set out in the Treaty on the European Union, both as regards internal policies and external action. The 2006 renewed EU Sustainable Development Strategy has guided the EU activities in that regard. Given the wide ranging effects that trade policies and agreements can have on the economy, employment, labour standards, social cohesion, and the environment, including to policy development and regulatory aspects, the EU is concerned with ensuring that all its trade actions are supportive of sustainable development within the EU, in our partner countries, and at global level.

108. One basic tool to ensure coherence between trade liberalisation and sustainable development are the ex-ante assessments of the potential effects of trade agreements on the pursuit of economic, social and environmental goals. In the EU, such ex-ante assessments take the form of Impact Assessments (carried out when considering a new initiative) and Sustainability Impact Assessments (SIAs). SIAs, conducted during the trade negotiations, by independent contractors, assess the potential economic, social and environmental impacts of trade agreements in the EU as well as its negotiating partners. They use a broad set of indicators and involve wide consultation of stakeholders, such as private sector associations, trade unions, NGOs and civil society at large. The results of the assessments guide EU negotiators in determining the best possible outcome of a trade negotiation. They also provide guidelines for the design of possible policy measures to accompany the trade agreement, to help maximise the positive effects and/or mitigate any negative consequences of the future agreements. The SIAs are thus intended to enable trade liberalisation in a sustainable way. The EU currently conducts SIAs to all major regional or bilateral trade negotiations.

109. The EU grants additional autonomous trade preferences under the GSP+ arrangement as an incentive to vulnerable developing countries to ratify and effectively implement internationally agreed standards on sustainable development and good governance. Furthermore, the EU has agreed provisions and commitments on implementing social and environmental standards and creating mechanisms for wider stakeholder involvement in its contractual bilateral agreements, be they PCAs, FTAs or EPAs and irrespective of whether the partners are developed countries or not. In parallel, the EU continues to be devoted to multilateral action to ensure that trade rules are supportive of sustainable development.

110. The EU promotes Corporate Social Responsibility (CSR) and a reference to CSR is also included into the sustainable development chapter of a new FTA generation.

111. Over the last years, climate change has emerged as a crucial sustainable development challenge facing policy makers, requiring also a careful consideration of the interaction between climate and trade policies with a view to ensuring that they reinforce each other. The EU has been in the frontline in the fight against climate change both at the domestic level as well as on the international stage. Domestically, the EU has developed a robust policy with some of the most aggressive carbon emissions reduction targets underpinned by a strengthened Emissions Trading System (EU ETS). In parallel, on an international level, the EU is a leading player in the climate change negotiations under the United Nations Framework Convention on Climate Change (UNFCCC) to agree on a new post-Kyoto climate regime.

112. There is a high awareness within the EU on the need to safeguard and support such direct efforts to mitigate and adapt to climate change with complementary trade policies. At the global level, trade policy could directly contribute to climate policy goals through the liberalization of trade in environmental good and services. While prioritizing the multilateral path, the EU has also been pursuing early liberalization of environmental goods and services in its FTAs. Further trade policy tools that may be significant with regard to climate change objectives and which the EU is examining closely include certification of natural resource based products and voluntary/private labelling.

3.6.2 Trade and development

113. The Treaty of Lisbon recognises development as a policy in its own right, on an equal footing with other components of the EU's external policy. It puts a new focus on coordinating the Union's and Member States' development policies, and on coherence between development policy and the other EU policies. This coincides with a shift to integrate EU development policy into the Europe 2020 agenda. Moving away from a donor–recipient relationship, the policy is one of mutual interest: working in partnership with developing countries to provide sustainable and inclusive opportunities for growth and poverty reduction whilst at the same time benefiting the EU.

114. The resources provided by the EU remain significant. Together with its Member States, preliminary figures for 2010 show the EU provided?53.8 billion of aid a year, a doubling over the past 10 years. As the world's biggest donor, the EU reconfirmed its commitment for its aid to reach the target of 0.7 % of gross national income by 2015.

115. The last "Policy coherence for development" communication from 2009 outlined EU responses to the global challenges of trade and finance, climate change, global food security, migration and security. It proposed mechanisms to ensure that development objectives are taken into account and reconciled with other EU objectives.

116. Trade is a major factor in the EU's relations with developing countries. Many developing countries are linked to the EU on a contractual basis. In this context, the negotiation of Economic Partnership Agreements is the cornerstone of the EU's trade and development partnership with ACP countries (see § 94). EU external assistance supports these reforms of the trading regime by providing the funding to strengthen institutional and productive capacities required to exploit the opportunities created by the agreements.

117. In addition to this, or, for those developing countries who do not have an agreement with the EU, the EU's Generalised System of Preferences (GSP) offers generous access to 176 developing countries and territories to the EU's market on an autonomous basis. A public consultation during 2010 on future adaptations of this system was accompanied by a proposal to roll over the current scheme. The "roll-over" Regulation, which will avoid the system lapsing at the end of 2011, has been approved by the European Parliament on 24 March 2011 and should be published in June.

118. The Commission will put forward a comprehensive "review" of the GSP system in May 2011; once adopted by the European Parliament and Council of Ministers this new regulation will enter into force by January 2014 at the latest. According to the Commission proposal, the new system will be open-ended and will strive to: a) take into account the fast-changing economic and trade patterns, acknowledging that the crisis and preference erosion have been hitting hard poorest countries, and therefore concentrating preferences on those most in need; b) strengthen the GSP+ incentive scheme for human and labour rights, the environment and good governance, by making applications easier but at the same time enhancing monitoring and implementation; c) make the system more stable, transparent and predictable.

119. The Commission is preparing a "Communication on Trade and Development", which will be adopted before the end of the year 2011. The main aim of this Communication is to set out a clear picture on how the EU can best support those developing countries that are presently not benefitting (or only marginally) from international trade in order to better harness the opportunities in favour of inclusive growth and poverty reduction, in a global scenario which has considerably changed. The related public consultation will be launched in May 2011.

120. In November 2010, the Commission published a Green paper on its future development policy,launching a reflection on how the EU's development policy should be oriented to best support the efforts of developing countries looking to achieve the MDGs, and how it can leverage new opportunities to tackle poverty. The public consultation was carried out from November 2010 to January 2011; and a Communication will be adopted during the course of 2011.

121. The EU with its Member States continues to be a leading player within the Aid for Trade agenda and moves decisively to put Aid for Trade into practice. Based on the recommendations of the WTO Aid for Trade Task Force, the EU adopted a joint Aid for Trade Strategy in 15 October 2007, through which it intends to honour its pledge on increasing Trade Related Assistance (TRA) made at the Hong Kong WTO Ministerial, as well as to achieve broader improvements in both the quality and quantity of its Aid for Trade. The EU has put in place a range of specific activities to implement the Strategy, including active participation in work in WTO and OECD to improve monitoring of global Aid for Trade flows and effectiveness.

122. The EU seeks to respond to the needs of developing countries, to support their sustainable development and their integration into the global trading system. Efforts to assist the developing countries in achieving growth, alleviating poverty and improving social equality within a framework of sustainable development have to be undertaken through a range of policy tracks, including trade policy. In this context, the EU continues to be fully committed to put trade at the service of development.

123. In the context of the DDA, the EU has continued to engage constructively with developing countries to reach suitable solutions to their particular realities and needs, and consistent with the principle of differentiation. EU proposals across all negotiating areas have consistently considered the development aspect and often include explicit provisions for special and differential treatment. Beyond the DDA and the WTO, the EU has participated actively in discussions on trade and development in other international fora such as the United Nations and UNCTAD.

124. In 2009, the EU as a whole continued to increase its TRA commitments substantially. Provisional data for this year, available at the time of writing, indicates that TRA reached almost?3 billion, compared to?2.4 in 2008. This results mainly from an increase in Members States TRA commitments to?2 billion. Although one year to go, the EU therefore exceeded its Hong Kong pledge to provide?2 billion in such assistance by 2010 (?1 billion each by the Commission and Member States). As in the case of TRA, the EU is also the largest provider world-wide of Aid for Trade. In 2006 the EU provided?7.3 billion (?2.6 billion by the Commission,?4.7 billion by Member States). Provisional data for 2009, available at the time of writing, indicates that this figure had increased to?10.5 billion (?3.35 by the Commission and?7. 15 by Member States) It should be stressed that these increases, delivered via existing channels of development cooperation, did not come at the expense of other sectors but rather in the context of a growing overall Official Development Assistance (ODA). In terms of activities financed in the trade area, the EU assisted developing countries across the whole spectrum of trade policy and regulation and trade development categories, while making sure that the distribution of available funds corresponded as close as possible to their own priorities and demands. For instance, a substantial and growing part of TRA was allocated for technical assistance to help beneficiaries meet European technical and phytosanitary standards.

125. On the multilateral side of Aid for Trade, the EU and its Member States are closely engaged in work on enhancing the Integrated Framework on Trade Related Technical Assistance for the LDCs. The Enhanced Integrated Framework (EIF) is now fully operational and as of December 2010, 47 LDCs benefitted from the programme. The EU and its Member States are involved as important donors, in some cases as donor facilitators on the ground and by participating in the EIF. Furthermore, there is a commitment to using the EIF as a guiding tool for bilateral assistance, in accordance with the joint Aid for Trade Strategy.

126. Finally, the European Commission has also been regularly improving and updating its Export Helpdesk[27]. This is a free online service to facilitate market access to the EU for economic operators in developing countries in particular. The website includes relevant information required by exporters interested in supplying the EU markets, such as, inter alia, import requirements, import tariffs, customs documents, rules of origin and trade statistics. The statistics on the use of this online information service demonstrates its growing importance. From 2004 (the year of its launch) to 2010, the number of hits increased from 1,500 to more than 12,000 hits a day. In 2010 in order to further address the needs of economic operators in the European Neighbourhood countries, the current language versions of the website (English, French, Spanish, Portuguese) were extended to Arabic and Russian.

LOOKING FORWARD

127. Notwithstanding the difficulties that the WTO Members encounter in moving forward the Round, the EU remains convinced that concluding the Doha round of negotiations is the priority on the WTO agenda. An ambitious, balanced and comprehensive outcome should be achieved that would deliver substantial new trade opportunities for all WTO members. This would be the right response to the global economic crisis and in order to achieve this, all major players, including large fast-emerging economies, will have to make significant contributions so that all players, big and small, can benefit.

128. The EU will continue to play its leadership role in promoting trade liberalization and developing a trading system of benefit to all. In this regard, the EU will continue to participate actively in the work of the WTO, while pursuing regional trade agreements which are a catalyst for multilateral liberalization, encouraging sustainable development and supporting the advancement and integration of less advanced economies in the multilateral scene. The EU believes that the transparency pillar is of utmost importance for the good functioning of the WTO. The surveillance and monitoring capacity of the WTO should be enhanced by pursuing work in peer reviews processes, transparency and multilateral scrutiny of trade policies in order to stem possible protectionist tendencies. The dispute settlement pillar remains central for ensuring stability to the global trading system and its judicial nature should be further developed.

129. The EU will work on the implementation of the communication "Trade, Growth and World Affairs", and continues to be committed to an open, fair and rules-based trading system, in order to achieve sustainability and growth at home and abroad.

__________

[1] Communication from the Commission to the European Parliament, the Council, the European economic and social Committee and the Committee of the regions, 9 November 2010. http://trade.ec.europa.eu/doclib/docs/2010/november/tradoc_146955.pdf.

 

[2] Member States maintain an active role in the Committee on Budget Finance and Administration.

 

[3] http://ec.europa.eu/europe2020/index_en.htm.

[4] http://ec.europa.eu/europe2020/targets/eu-targets/index_en.htm.

[5] http://ec.europa.eu/europe2020/tools/flagship-initiatives/index_en.htm.

[6] http://ec.europa.eu/information_society/digital-agenda/index_en.htm.

[7] http://ec.europa.eu/research/innovation-union/pdf/innovation-union-communication_en. pdf#view= fit&pagemode=none.

[8] http://ec.europa.eu/social/main.jsp?catId=950&langId=en.

[9] http://ec.europa.eu/social/main.jsp?catId=958&langId=en.

[10] http://ec.europa.eu/social/main.jsp?catId=961&langId=en.

[11] http://ec.europa.eu/enterprise/policies/industrial-competitiveness/industrial-policy/index_en.htm.

[12] http://ec.europa.eu/resource-efficient-europe/index_en.htm.

[13] http://ec.europa.eu/internal_market/smact/index_en.htm.

[14] Council Regulations 72/2009, 73/2009 and 74/2009 of 19 January 2009, published in the Official Journal L30 of 31 January 2009.

[15] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0672:FIN:en:PDF.

[16] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52010DC0639:EN:HTML:NOT.

[17] http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/119141.pdf.

[18] http://ec.europa.eu/employment_social/esf/news/news/article_7362_en.htm.

[19] http://ec.europa.eu/social/main.jsp?catId=326&langId=en&newsId=432&furtherNews=yes.

[20] http://trade.ec.europa.eu/doclib/docs/2010/november/tradoc_146955.pdf.

[21] http://trade.ec.europa.eu/doclib/docs/2010/november/tradoc_146941.pdf.

[22] http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/preferential/article_777_
en.htm.

[23] http://trade.ec.europa.eu/doclib/docs/2010/october/tradoc_146796.pdf.

[24] http://trade.ec.europa.eu/doclib/docs/2011/march/tradoc_147629.pdf.

[25] Safeguards: Council Regulation (EC) No 260/2009 and 625/2009, Anti-dumping: Council Regulation (EC) No 1225/2009, Anti-subsidy: Council Regulation (EC) No 597/2009.

[26] World Tariff Profiles 2010, WTO (2010).

[27] http://exporthelp.europa.eu.