Trade, Growth and Development

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Communication on trade, growth and development

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Trade, Growth and Development

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

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