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How can trade contribute to growth and jobs?   The role of EU trade policy

How can trade contribute to growth and jobs?   The role of EU trade policy. Signe Ratso Director Directorate General of Trade European Commission. Outline. Trade and growth Trade and jobs (new studies on factors contribution to trade) Greek exporters (firm level data) Trade policy

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How can trade contribute to growth and jobs?   The role of EU trade policy

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  1. How can trade contribute to growth and jobs?  The role of EU trade policy Signe Ratso Director Directorate General of Trade European Commission

  2. Outline • Trade and growth • Trade and jobs (new studies on factors contribution to trade) • Greek exporters (firm level data) • Trade policy • Market access strategy

  3. Trade is a source of growth… • Growth in EU depends on global growth: • EU countries can benefit from the emergence of new economic powers (Brazil, India, China and Russia)

  4. …and trade supports jobs • In 2007, extra-EU exports supported around 25 million jobs, which represented around 11% of total employment in the EU27. • This represents an increase of 3 million export-related jobs since 2000.

  5. …but in Greece less than in other countries Employment supported by extra-EU exports as a percentage of total employment (2007)

  6. - In Greece, in 2007, the sales of goods and services to the rest of the world supported the jobs of 128.000 people, which represents only around 3% of total employment. - Moreover, (and contrary to what happen in the EU as a whole), the contribution of trade to job creation has decreased. In 2000, the jobs of 231.000 Greeks were supported by extra-EU exports.

  7. Many factors contributed to this: • Greece exports tend be more oriented towards extra-EU markets than the EU average but… • the share of exports over GDP remains well below that of other (comparable) small EU Member States (for example Belgium)… • while Greek exports have become less labour intensive than the EU27 average

  8. Looking at micro-data: many Greek firms are exporters….

  9. ….but they sell abroad only a small fraction of their output The average export share is 30% (export revenue/turnover of exporters; non-exporters are not included)

  10. The weaknesses can be the basis of future export growth: • The prevalence of marginal exporters can explain the disappointing export performance in manufacturing. • On the positive side: marginal exporters can turn to foreign markets more easily than firms that have never exported. • this process can lead to a long-term successful expansion of the export sector only if the bigger firms are involved

  11. Multilateral policy (WTO/DDA) Bilateral agreements (mainly Free Trade Agreements) Our trade strategy Market Access Strategy 11 Trade and investment policy – how we engage with our partners

  12. Bilateral agreements – state of play Mexico Caribbean ACP Chile South Africa Columbia/ Peru South Korea Euro-Med Central America 12 EFTA Turkey SAA Negotiations concluded Agreements in force

  13. Bilateral agreements – the way ahead 13 Eastern Partners Russia USA Japan Ukraine Other ASEAN Canada Euro-Med Pacific EPAs Gulf countries India Malaysia African EPAs Singapore Mercosur Negotiations ongoing Negotiations under consideration EPAs: Economic Partnership Agreements with ACP countries Euromed: Forthcoming negotiations on deep and comprehensive Free Trade Agreements Russia: Commitment to negotiate a Free Trade Agreement already contained in the Partnership and Cooperation Agreement of 1997

  14. The example of the EU-South Korea Free Trade Agreement • 1.6 billion Euros in customs duties saved per year • Creates new trade opportunities (after full implementation the EU is expected to increase goods and services exports by nearly 20 billion Euros) • Access for service suppliers • Tackling non-tariff barriers • Enhanced access to government procurement • Protection of intellectual property • Strong competition rules • Commitment to sustainable development

  15. Market Access Strategy • Cooperation between Commission, Member States and business to identify, analyse and remove barriers • Importance of preventive action (“early warning”) • 200 key barriers identified in more than 30 markets (publicly available on Market Access Database) • Around 50 “success stories” per year • Strong focus on SMEs • Market Access Committee, sectoral Market Access Working Groups and Local Market Access Teams

  16. Local Market Access Teams • In more than 30 third countries • Local knowledge of the situation by EU Delegation, Member States Embassies and business representatives • Early warning function: easier to address potential barriers • Assessment of the likely economic impact of market accessbarriers • SME contact points availablesoon

  17. Trade finance • There is potentially also a liquidity crisis that is currently affecting trade conducted on an open account basis. • Task Force for Greece and other MSs' Export Credit Agencies are considering solutions.

  18. Conclusions • The growth outside the EU is a great opportunity for EU countries: demand for exports and sources of investments. • DG TRADE is actively pursuing new opportunities for EU firms (both through multilateral fora and bilateral negotiations and Market Access Strategy)

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