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Trade, Growth and Development


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Communication on trade, growth and development

Communication on trade, growth and development

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  • 1. Trade, Growth and Development 1 February 2012 Tailoring trade and investment policy for those countries most in need Tailoring trade and investment policy for those countries most in need
  • 2. Introduction
    • On 27 January, 2012, the EU adopted a new Communication on trade, investment and development, highlighting:
    • Reflect a changing world economy, taking into account the growing importance of emerging markets and the struggle of Least Developed Countries (LDCs)
    • How the EU’s trade, investment and development policies support poverty alleviation, sustainable development and inclusive growth
    • How the EU has delivered on its commitments
    • The EU’s trade and investment policies for development for the next decade
  • 3.
    • Key messages
    • What has changed?
    • What has the EU done to date?
    • What does the communication recommend?
    • Initiatives for Trade, Growth and Development
    • Support for Domestic Reform
    • What Happens Next?
    Aims of today
  • 4. Key messages
    • Trade is a key element for growth and development, but on its own is not sufficient
    • Differentiating among developing countries, targeting those most in need
    • Looking beyond tariff reductions to tackle remaining trade barriers
    • Improving the way our instruments deliver and work together
  • 5. What has Changed?
    • Relative weight of developing countries has grown, but not evenly:
    • Developing countries now account for over ½ of world exports - G20 developing countries account for 1/3 of world exports
    • South-South trade has outstripped North-South trade
    • GDP of emerging economies have grown substantially through trade
    • LDCs have also shown positive growth and increased trade, but have become further marginalised
  • 6. Success Stories
    • FEATURE: Emerging Economies
    • Countries like Brazil, Russia, South Africa, India and China have leveraged trade to lift millions out of poverty
    • BRICS countries now account for 17% of world GDP
    • Such countries are well on track to meeting MDG targets
    • LDCs like Bangladesh, Cambodia and Haiti have developed thriving textile industries
    • Over the last decade, Bangladesh and Cambodia have increased exports by 80% and 60% respectively
  • 7. What the EU has done to date
    • The EU is the world’s most open market for developing country exports
    • Autonomous trading schemes
      • Everything but Arms
      • Generalised System of Preferences (GSP+)
    • Bilateral/Regional Trade Agreements
      • Economic Partnership Agreements
      • Free Trade Agreements
    • Leading the multilateral agenda
    • Main world provider of Aid for Trade
    • Practical efforts: Rules of Origin, Export Helpdesk
    • FEATURE: EU Aid for Trade and the Rwandan Coffee Sector
    • An EU AfT programme has benefited 60,000 Rwandan farmers, 40% of which are women
    • The programme focused on capacity building and infrastructure, enhancing local ownership
    • Rwandan coffee exports have increased by an average of 19% since 2001
  • 8. What the EU has done to date: EU Imports from Developing Countries (total excluding fuels)
  • 9. Leading on Aid for Trade
    • The EU and Member States are the world’s largest providers of Aid for Trade with €10.5 bn in 2009
    • Sub-Saharan Africa is the main beneficiary of Aid for Trade receiving some €2.9 billion or 29% of the total in 2009
    • LDCs receive 22% of the total budget
    Aid for Trade brochure
  • 10. What does the Communication recommend?
    • Multilateral agenda a priority – DDA and beyond
    • Fast adoption of a revamped GSP
    • Rapid conclusion of the EPAs with ACP countries
    • Continuing FTA negotiations with Eastern Neighbourhood, Asia, Latin America, partnerships with Southern Mediterranean
    • Improve complementarity between trade and development policies
    • Using EU instruments to boost investment
    • Mature partnership with emerging economies
  • 11. Supplementary initiatives to support trade for development
    • Promote trade for small operators in developing countries
    • Promote Corporate Social Responsibility
    • Support for sustainability (fair, ethical, organic trade schemes)
    • Improve preparedness to support developing countries affected by natural disasters
    • Support transparency and due diligence for trade in natural resources
    • FEATURE: Helping Small Operators
    • Improved information on markets (e.g. Export Helpdesk)
    • Promoting dialogue
    • IPR support tools
    • Facilitating access to finance
    • Simplified proof of origin procedures
    • Participation in sustainability-schemes
  • 12. Support for domestic reform
    • EU supports domestic reforms but developing countries also have to take responsibility and ownership
    • Good governance is vital
    • Economic reforms can be assisted by sector-wide programmes or budget support
    • FEATURE: Cape Verde—Graduating Through Ownership
    • In 2007, Cape Verde became the second country to graduate from LDC status
    • It achieved this through sound economic management, progressive openness to trade and good governance
  • 13. Domestic reforms for trade and investment led growth
    • Developing countries
      • Ownership of development is key
    • Emerging economies
      • Further opening markets to LDCs through preferential schemes and to other WTO members (4/5 are developing countries)
      • Take up more global responsibilities (e.g. food security, sustainability, green growth, climate change)
      • Mature partnerships with EU on regulatory cooperation
      • Developed countries
      • Match EU’s significant level of market access to developing countries
  • 14. Moving Forward
    • Is new legislation required?
      • No new legislation is attached, some already ongoing
      • No commitment of new funds but better use of existing instruments
    • Next Steps:
      • The communication will be discussed in the Trade Council and European Parliament
      • Trade Council conclusions are expected by 16 March 2012
  • 15. Conclusion
    • Growth of emerging economies shows that development through trade is possible
    • Differentiated approach to developing countries is needed, focusing assistance to those most in need, particularly LDCs
    • Working to assist developing countries in taking ownership of their own trade and development
    • Need for comprehensive action beyond tariff reduction that takes into account sustainability, inclusive growth, good governance and resilience
  • 16. Thank you for your attention
    • DG DEVCO
    • DG TRADE