Select Committee on European Scrutiny Forty-First Report





Commission Communication: Trade and Development: assisting developing countries to benefit from trade.

Legal base:
Document originated:18 September 2002
Deposited in Parliament:8 October 2002
Department:International Development
Basis of consideration:EM of 21 October 2002
Previous Committee Report:None
To be discussed in Council:19 November General Affairs External Relations Council
Committee's assessment:Politically important
Committee's decision:Cleared, but further information requested

The Communication

  12.1  Drafted at the request of the Presidency of the European Union, the Communication sets out three specific areas in which the Commission intends to take action. The objective is for the EU to fulfill its commitments in support of the efforts of developing countries to benefit from trade and investment.

  12.2  Three major conferences have taken place over the last year at which there has been increasing recognition of the importance of the relationship between development, trade and the integration of the developing countries into the world economy. Effort is now needed to transform into action the commitments made at these conferences:

  • a new and more direct approach to trade, centred on development and supported by capacity building, was launched in November 2001 with the Doha Development Agenda. A footnote in the Communication describes the two Ministerial Declarations and a Ministerial Decision associated with this programme;

  • world leaders at the UN Conference in Monterrey in March 2002 stressed the importance for development of support to remove supply side constraints to trade; and

  • the Johannesburg World Summit on Sustainable Development later in 2002 emphasised the need for further efforts in support of sustainable trade, beyond those made in Doha and Monterrey, stressing the need for mutually supportive trade, development and environment policies.

The place of developing countries in world trade

  12.3  By way of background, the Commission notes that an important feature of world trade, which has increased dramatically in the last thirty years, has been the growing participation of developing countries. A shift took place in the late eighties in the composition of their exports, so that manufactured goods now account for 70 percent, with agricultural commodities falling from 20 to 10 percent.

  12.4  However, with the exception of a few East Asian newly industrialised economies, the exports of developing countries are still concentrated on a limited range of products derived mainly from exploiting natural resources and the use of unskilled labour. Furthermore, a large number of countries have seen their share of exports decline. In the case of 49 of the least-developed countries (LDCs), it fell from 3 percent in the 1950s to around 0.5 percent in the early 1980s and has hovered around that very low rate ever since.

  12.5  Some of the difficulties encountered by the LDCs are spelt out. These include the challenge they face in implementing World Trade Organisation (WTO) agreements. The Commission spells out at some length what the EU is already doing to try to assist the LDCs and places importance on providing further assistance in this area in its proposals for action.

Proposed action

  • Intensifying the dialogue with partner countries

  12.6  Greater emphasis will be placed on trade issues in the EU's dialogues on policy with developing countries, with trade policy issues being better integrated into the Poverty Reduction Strategy Papers or similar mechanisms. Funding will be adjusted to take account of the higher priority to be given to trade-related assistance.

  • Enhancing the effectiveness of the EU's support

  12.7  Practically all EU development assistance is provided to a country or region. The Commission will look at the scope for funding horizontal trade-related initiatives, whether bilateral, regional or multilateral, which benefit all developing countries. Training programmes for negotiators and administrators will be developed and networks established in institutions of higher education. Efforts will be made to improve developing countries' capacities in the sanitary and phyto-sanitary[22] field, to assist their access to developed markets.

  • Contributing to international effectiveness

  12.8  The Commission identifies an increasing need to support the multilateral initiatives of agencies such as the World Bank, the WTO, UNCTAD and the joint UNEP/UNCTAD[23] capacity-building task force on trade, environment and development. It undertakes to engage in more efficient co-operation with these and other international organisations, such as the International Labour Organisation and the World Intellectual Property Organisation.

The Government's view

  12.9  The Secretary of State for International Development (Clare Short) welcomes the opportunity which this Communication provides to debate trade and development issues, but she comments that it lacks ambition and fails to propose new ideas on integrating development issues into trade policy. Technical assistance and trade policy should form part of a comprehensive development strategy, but these cannot achieve the same benefits for developing countries as change in trade policy. She says:

"What the EU should really be focussing on now is how to turn the commitments made at Doha into reality. This should be done by ensuring that we meet all the relevant deadlines (e.g. Trips, agricultural modalities and non-agricultural market access), offering more market access opportunities to developing countries, and at the same time, offering them the technical assistance and know-how to make the most of opportunities already out there (e.g. "Everything But Arms for the LDCs)."

  12.10  The Secretary of State comments that the EU needs to create better access by developing countries to EU markets, particularly in agricultural goods where barriers are high. The Government is urging the EU to use the opportunities of the Common Agricultural Policy mid-term review and of its regional agreements, particularly within the framework of the Cotonou Agreement, to increase the coherence of its development and trade policies.


  12.11  We clear the document, but we note the Secretary of State's criticism that the Commission's paper lacks ambition and ask her to provide us with an account of the discussion of it at the Council on 19 November, indicating how much support there was for any proposals put forward for more ambitious actions than those proposed in the paper.

22  Promoting the health of plants. Back

23  United Nations Environment Programme/UN Conference on Trade and Development. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 25 November 2002