12. ASSISTING DEVELOPING COUNTRIES TO
BENEFIT FROM TRADE
Commission Communication: Trade and Development: assisting developing countries to benefit from trade.
|Document originated:||18 September 2002
|Deposited in Parliament:||8 October 2002
|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
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
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.
- 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
- 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
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
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.
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