Trade, Growth and Development 1 February 2012 Tailoring trade and investment policy for those countries most in need

Introduction On 27 January, 2012, the EU adopted a new Communication on trade, investment and development, highlighting: Reflect a changing world economy, taking into account the growing importance of emerging markets and the struggle of Least Developed Countries (LDCs) How the EU’s trade, investment and development policies support poverty alleviation, sustainable development and inclusive growth How the EU has delivered on its commitments The EU’s trade and investment policies for development for the next decade

Key messages What has changed? What has the EU done to date? What does the communication recommend? Initiatives for Trade, Growth and Development Support for Domestic Reform What Happens Next? Aims of today

Key messages Trade is a key element for growth and development, but on its own is not sufficient Differentiating among developing countries, targeting those most in need Looking beyond tariff reductions to tackle remaining trade barriers Improving the way our instruments deliver and work together

What has Changed? Relative weight of developing countries has grown, but not evenly: Developing countries now account for over ½ of world exports - G20 developing countries account for 1/3 of world exports South-South trade has outstripped North-South trade GDP of emerging economies have grown substantially through trade LDCs have also shown positive growth and increased trade, but have become further marginalised

Success Stories FEATURE: Emerging Economies Countries like Brazil, Russia, South Africa, India and China have leveraged trade to lift millions out of poverty BRICS countries now account for 17% of world GDP Such countries are well on track to meeting MDG targets FEATURE: LDCs LDCs like Bangladesh, Cambodia and Haiti have developed thriving textile industries Over the last decade, Bangladesh and Cambodia have increased exports by 80% and 60% respectively

What the EU has done to date The EU is the world’s most open market for developing country exports Autonomous trading schemes Everything but Arms Generalised System of Preferences (GSP+) Bilateral/Regional Trade Agreements Economic Partnership Agreements Free Trade Agreements Leading the multilateral agenda Main world provider of Aid for Trade Practical efforts: Rules of Origin, Export Helpdesk FEATURE: EU Aid for Trade and the Rwandan Coffee Sector An EU AfT programme has benefited 60,000 Rwandan farmers, 40% of which are women The programme focused on capacity building and infrastructure, enhancing local ownership Rwandan coffee exports have increased by an average of 19% since 2001

What the EU has done to date: EU Imports from Developing Countries (total excluding fuels)

Leading on Aid for Trade The EU and Member States are the world’s largest providers of Aid for Trade with €10.5 bn in 2009 Sub-Saharan Africa is the main beneficiary of Aid for Trade receiving some €2.9 billion or 29% of the total in 2009 LDCs receive 22% of the total budget Aid for Trade brochure

What does the Communication recommend? Multilateral agenda a priority – DDA and beyond Fast adoption of a revamped GSP Rapid conclusion of the EPAs with ACP countries Continuing FTA negotiations with Eastern Neighbourhood, Asia, Latin America, partnerships with Southern Mediterranean Improve complementarity between trade and development policies Using EU instruments to boost investment Mature partnership with emerging economies

Supplementary initiatives to support trade for development Promote trade for small operators in developing countries Promote Corporate Social Responsibility Support for sustainability (fair, ethical, organic trade schemes) Improve preparedness to support developing countries affected by natural disasters Support transparency and due diligence for trade in natural resources FEATURE: Helping Small Operators Improved information on markets (e.g. Export Helpdesk) Promoting dialogue IPR support tools Facilitating access to finance Simplified proof of origin procedures Participation in sustainability- schemes

Support for domestic reform EU supports domestic reforms but developing countries also have to take responsibility and ownership Good governance is vital Economic reforms can be assisted by sector-wide programmes or budget support FEATURE: Cape Verde— Graduating Through Ownership In 2007, Cape Verde became the second country to graduate from LDC status It achieved this through sound economic management, progressive openness to trade and good governance

Domestic reforms for trade and investment led growth Developing countries Ownership of development is key Emerging economies Further opening markets to LDCs through preferential schemes and to other WTO members (4/5 are developing countries) Take up more global responsibilities (e.g. food security, sustainability, green growth, climate change) Mature partnerships with EU on regulatory cooperation Developed countries Match EU’s significant level of market access to developing countries

Moving Forward Is new legislation required? No new legislation is attached, some already ongoing No commitment of new funds but better use of existing instruments Next Steps: The communication will be discussed in the Trade Council and European Parliament Trade Council conclusions are expected by 16 March 2012

Conclusion Growth of emerging economies shows that development through trade is possible Differentiated approach to developing countries is needed, focusing assistance to those most in need, particularly LDCs Working to assist developing countries in taking ownership of their own trade and development Need for comprehensive action beyond tariff reduction that takes into account sustainability, inclusive growth, good governance and resilience

Thank you for your attention DG DEVCO c_aid-for-trade_en.htm c_aid-for-trade_en.htm DG TRADE agenda/development/ agenda/development/