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 Market access strategy 2

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) 3

…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

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

- In Greece, in 2007, the sales of goods and services to the rest of the world supported the jobs of 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 Greeks were supported by extra-EU exports. 6

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 7 Member States Embodied employment in Extra-EU exports (1,000 employees) Employment shares (%) Embodied employment per million € of extra -EU exports Extra-EU exports shares over total exports (%) Total exports shares over GDP (%) Extra-EU exports shares over GDP (%) Belgium EU2722,00025, Greece

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

….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) 9

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 10

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

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

Bilateral agreements – the way ahead 13 Japan Russia Other ASEAN Eastern Partners Pacific EPAs Malaysia India Singapore Mercosur Euro-Med Canada Gulf countries Ukraine African EPAs 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 Negotiations ongoing Negotiations under consideration USA 13

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 14

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 15

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 access barriers SME contact points available soon 16

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. 17

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) 18