EU Trade Policies: the blueprint

1. EU Trade Policies: the blueprint Karin Ulmer, Aprodev (Association of WCC-related Development Organisations in Europe) Presentation for UNCTAD Conference Delhi, 27 Feb 2008 EU trade policy: the blueprint Global Europe and its development implications Equity in trade negotiations

2. Global Europe Global Trends: • Proliferation of FTA • High asymmetry • Lack of governance and democracy Global Europe • Choice for aggressive competition • Lock in EU domestic policy reforms and promote deregulation • Cohesive EU foreign economic policy: „soft“ trade power • New role for buisness in trade-rule making Objectives: • Market opening in trade and services • Competing for geopolitical influence • Tackling import regimes and behind the border obstacles (NTB, TBT) • Introduce new issues, and stronger rules and standards

3. Market access Push for full and fast tariff elimination TDM fall short to offer effective protection (infant industry, SSM) Rules of orgin further fragmentate production Subsidies & countervailing measures not addressed Introduction of MFN clause is detrimental to South-South trade Service sector Priority to market access over sequencing regulation & regulatory cooperation and reform Should have sound competition frameworks in place to prevent private monopolicies Lack of safeguards Limited offer on Mode IV Trade related issues:Tackling the whole operational environment incl.services and supply chains Competition: Lack of proper regulations lead to corrupt bidding process private monopolicies Capacity and leverage to investigate and enforce rules Investment rules Will attract FDI is questionable assumption manage investment (performance requirements/local content) Balance of rights & obligations for investor and home country Investment promotion Enforcing good investor behavior Government Procurement Significant share of GDP: get policies right Little evidence on what kind of GP is needed Intellectual Property Rights Effective IPR to promote health, industrial devevelopment, food security and education IPR can stifle or promote innovation (copy right) EU focus on enforcement provision rather than access to technologies & information EU seeks control over IT for own competitiveness EU to cooperate in WIPO to address development deficiencies Trade policies (macro)

4. Global Europe and its development implications Precondition to reap development potentials • Provide evidence on development benefit • Alignment with national development strategies • Guidance for substantial shift to achieve best outcomes for poor producers/traders • Imperative positive development outcomes for non-WTO compulsion issues • Non-negotiable EU template is a non starter • Arbitration against objective agreed criteria (development benchmarks) Development package • No lock in of of donor driven policy reforms • Non-conditional, non-punitive aid packages, de-link from signing FTA State of art • Reference to development in overarching objectives but no overriding legal power • Gender dimension is absent • Transparency and participatory decision-making remains unfulfilled • “Become modern or get out!” Think big. Be big. Play big.

5. Imports: Fixed duty increased (1450 CFA) Ad valorem maintained (20%) VAT added 17.5% Veteranary tax added 1.75% Quota decreased and temporarily stopped Local markets: Domestic production increased: (demand of 13 500 day chicken in 2004 to 32 500 in 2005) 75% of consumers informed Demand for imported chicken decreased Private investment in domestic poultry sector Ongoing monitoring and public pressure Petition of appr. 100 national parliamentarians to support domestic poultry sector Establishment of poultry farming representation Chicken campaign results 2005 Popular advocacy - Political participationsource: www.acdic.net

6. Poultry sector specific trade policyoptions Criteria: Sector with disproportionate gender impact • Special/sensitive product: maintain flexibility for mix of policy measures (risk: standstill clause) • Special Safeguards Measures: TDM too burdensome • Development package: supply side capacity • Financial services (assets, bankruptcy) • “Farm to fork” : EU food safety regulations and responsibilty • Monitoring: sector specific observatory • Review of trade provisions

7. Trade related issues:Tackling the whole operational environment incl.services and supply chains Competition: Lack of proper regulations lead to corrupt bidding process private monopolicies Capacity and leverage to investigate and enforce rules Investment rules Will attract FDI is questionable assumption manage investment (performance requirements/local content) Balance of rights & obligations for investor and home country Investment promotion Enforcing good investor behavior Government Procurement Significant share of GDP: get policies right Little evidence on what kind of GP is needed Intellectual Property Rights Effective IPR to promote health, industrial devevelopment, food security and education IPR can stifle or promote innovation (copy right) EU focus on enforcement provision rather than access to technologies & information EU seeks control over IT for own competitiveness EU to cooperate in WIPO to address development deficiencies Think small first Slaughterhouses: Decentralised women cooperatives providing slaughter services direct at market (smart not high tech) Financial services for women/SME in local markets Support informal netwoks Invest in local market facilities and infrastructure Traditional knowledge: domestic breeding & varieties (risk:birdflue) Trade policies (macro) Social & Economic policies (micro)

8. Market access Push for full and fast tariff elimination TDM fall short to offer effective protection (infant industry, SSM) Rules of orgin further fragmentate production Subsidies & countervailing measures not addressed Introduction of MFN clause is detrimental to South-South trade Service sector Priority to market access over sequencing regulation & regulatory cooperation and reform Should have sound competition frameworks in place to prevent private monopolicies Lack of safeguards Limited offer on Mode IV Think small first “The difficulty is that gender issues are very silent as they are hidden away at the micro level, whereas trade issues and volumes and figures are (made) very visible at the macro level.”Tilder Kumiichi What kind of growth? Export orientated agriculture (agro-buisnesss) or protection of import competing agriculture Feminisation of poverty: Poultry farming, however small, can effectively improve livelihoods (economic benefits, social advantages, cultural and traditional dimension) Dynamic gender relations: commercial poultry farming and backyard poultry farming; entry point to enterpreneurship Potential for food processing industry. Social & Economic policies (micro) Trade policies (macro)

9. Illustration: Gender benchmark on special and sensitive products (flexibility for protection) In addition to WTO criteria for special products of poverty alleviation, employment, and food security, a fourth criteria on disproportionate gender impact could be added. Gender criteria could be defined as follows: if a sector is particularly critical to the livelihood of poor women and liberalisation would jeopardise this function, then the sector is eligible for nomination as sensitive until the affected women can compete or find other comparable income opportunities. Alternatively, if a sector is liberalised and found to have a disproportionate impact on poor women, then liberalisation schedules can be halted or reversed. A process could be designed whereby: • a)Each DC country lists the product/sector that is gender sensitive on the basis of objective and agreed criteria, such as women’s employment, women’s share of credits, decision-making, and autonomy in entrepreneurial activities. • b)The number of gender sensitive products may possibly be limited by a maximum number per country • c)Gender sensitive products would also be declared special products. • d)Safeguard measures can be evoked for gender sensitive products.

10. Illustration: Equity benchmark (positive discrimination) • Equity benchmarks should allow and promote positive measures under aid for trade, development support, investment, and/or mitigating and accompanying stipulations that are designed in a way that explicitly address gender specific measures. These include for example, safety nets, provisions that promote women entrepreneurs, regulations that encourage supply capacity building, and control over productive resources.  

11. Benchmarking Development in trade negotiationsByron & Lewis (2007) Formulating sustainable development benchmarks for a EU –Cariforum EPA: Caribbean perspectives, published by University of West Indies, Aprodev and ICTSD McCarthy, Kruger & Fourie (2007) Benchmarking EPA negotiations between EU and SADCpublished by Tralac, Aprodev and ICTSD