Sustainability Impact Assessment of the Euro-Mediterranean Free Trade Area (SIA-EMFTA)

Notes on Public Meeting to Discuss the Project Phase 1 Report (SIA Methodology), Brussels, 24 November 2004

The meeting was attended by 51 participants, including 32 regional delegates.

Chair: Jean-Marc Riegel, EuropeAid

Opening presentation by Patrick Laurent, Head of Unit, DG External Relations

Mr Laurent outlined the European Commission’s objectives for the sustainability impact assessment of the EMFTA, and the ways in which the EC planned to use the results. In particular Mr Laurent referred to the special significance of the forthcoming Ministerial meeting of the Euro-Mediterranean Partnership, to take place in Barcelona in November 2005, which will coincide with the tenth anniversary of the Barcelona Partnership. It was anticipated that substantial results would be available from the SIA study by September 2005, to be used in the preparations for the Barcelona meeting.

Mr Laurent noted three main problem areas in the development of the EMFTA: a serious lack of south-south trade; difficulties associated with the liberalisation of agricultural trade; and the potential for significant benefits throughout the region from the liberalisation of trade in services. The sustainability impact assessment was expected to provide valuable information in all three areas.

Comments from the chair

Mr Jean-Marc Riegel outlined some of the key characteristics of the region in relation to sustainable development and the influence of the trade agreements. Many parts of the region have a fragile environment and significant stress on natural resources. Levels of poverty are high for many social groups, with high dependency on subsistence agriculture in many areas. Increasing trade and investment can contribute to addressing these issues, but may also intensify threats to natural resource stocks and have adverse impacts on some sections of society. The SIA study would make use of previous research in these areas and extend it, in order to improve understanding of the effects and enable appropriate decisions to be made in relation to the EMFTA, by the EU and its partners as regards cooperation programmes and trade negotiations.

Presentations by SIA-EMFTA consortium

Presentations on the Phase 1 report for the SIA study and the proposals for Phases 2 and 3 were made by members of the SIA-EMFTA consortium: Colin Kirkpatrick (University of Manchester), Clive George (University of Manchester) and Carol Chouchani Cherfane (UN Economic and Social Commission for Western Asia).

Delegates’ observations

The following notes summarise delegates’ contributions to the dialogue.

1. A joint written statement commenting on the Phase 1 report was presented on behalf of ENDA Europe, ENDA Maghreb, the European Environment Bureau (EEB), Friends of the Earth MedNet, the Mediterranean Information Office for the Environment, Culture and Sustainable Development (MIO-ECDSE), and the Mediterranean Programme of the WorldWide Fund for Nature (WWF). Some of the key points were summarised:

· the Association Agreements as they stand lack details on environmental and social rights issues;

· the EMFTA should include a regional side agreement on environmental and social issues, beginning with an agreed framework document which should be launched at the 2005 Barcelona meeting;

· environmental management regimes are weak in many of the partner countries; action to strengthen them should be taken now, without waiting for the results of the SIA;

· there is insufficient linkage in the methodology to the Mediterranean Strategy for Sustainable Development;

· there should be a non-liberalisation scenario;

· reference is made to potential gains in economic welfare without defining the term;

· secondary as well as primary impacts should be assessed;

· the study should make contact with FAO regional offices in Cairo and Tunisia, including work on the Johannesburg Plan of Implementation;

· impacts on rural livelihoods should be assessed, with particular emphasis on the effects on women in rural areas.

2. The indicators used in the SIA should place more emphasis on: water resource issues; solid waste; gender impacts; measures of initiatives to strengthen people’s representation.

3. Indicators should serve not only for follow-up monitoring, but to identify impacts that should be evaluated.

4. It was suggested that the SIA should include a review of the relationships between the Barcelona Process and the New Neighbourhood Initiative.

5. The objectives of the study need to be made more explicit and more operational.

6. A number of suggestions were given for producing practical results from the study:

· identify what countries want to achieve

· quantify the results, for benefits and adverse impacts

· present a timetable with deadlines and milestones for recommended reforms

· assess the financial costs of recommended mitigation

· identify where the money will come from

· identify how the results can be integrated into existing programmes, such as countries’ national sustainable development strategies and plans.

7. It was suggested that the SIA should review the Euro-Mediterranean Partnership and Association Agreements themselves, rather than concentrating solely on flanking measures and mitigation. It should put forward proposals for correction, not just mitigation.

8. The consortium’s view of trade liberalisation as a means to an end, not an end in itself, was welcomed. The SIA should evaluate whether EMFTA achieves appropriate ends.

9. It was requested that the study assess the impact of EU enlargement on the Mediterranean region.

10. It was requested that a French language version of the Phase 1 report be prepared.

11. Clarification was requested on whether the SIA will be a historical assessment of impacts or a forward looking assessment of ongoing trade measures. A second speaker suggested it should be both.

12. The SIA results should be made as easy as possible to adopt, by making the findings specific, and directly relevant to real situations.

13. The SIA should make specific, tangible, precise proposals.

14. It was suggested that these should include recommendations for environmental and/or labour standards for traded products. One speaker suggested that partner countries’ standards should be made as close as possible to those of the EU. Another argued that asymmetries in north-south trade preclude the adoption of uniform standards.

15. It was suggested that the assessment should consider “technological sustainability”, in that mitigation measures should be financially and technologically feasible.

16. The EU’s role in helping partner countries to upgrade to cleaner production technologies should be clarified, including the availability of subsidies.

17. The EC responded to this with reference to the European Neighbourhood Policy country action plans, MEDA priority areas and other publications on the EU’s development assistance policy. This included plans for technical assistance to help partner countries develop their environmental legislation and enforcement mechanisms. Another speaker warned that EU assistance with drafting legislation might have negative effects, since laws based on those in EU countries might not be appropriate for less wealthy partner countries. Technical assistance might instead be directed at introducing quality management systems and environmental management systems.

18. The SIA should evaluate the cost-effectiveness of proposed mitigation.

19. Potential positive social impacts of liberalisation should be assessed, for example of EU agricultural liberalisation. Similarly, the potential negative social impacts of non-liberalisation should be assessed.

20. The SIA should assess the social and environmental impacts that have already occurred from association agreements that have already been signed.

21. The EC should make a political commitment on how it will implement the SIA findings. This should include regional side agreements on environmental and social issues.

22. The SIA should consider the impact on small and medium sized enterprises in partner countries. The impacts should be assessed in relation to those occurring in parallel from, for example, increasing competition from China. In Jordan for example, a short or medium term increase in unemployment due to trade liberalisation is a major concern, with particularly serious effects for women and young people.

23. The SIA should avoid becoming a broad, general study, and focus on providing extra information and practical means of changing the situation.

24. The SIA-EMFTA Newsletter should be published in Arabic.

25. The SIA should serve as a risk assessment, in the sense of evaluating the magnitude of the risk of impacts occurring. This could for example generate a database of risks in different countries, which they can then use in making decisions on appropriate actions.

26. Impacts on the competitiveness of businesses should be evaluated.

27. Impact on foreign direct investment should be assessed, under the general heading of fixed capital formation.

28. The impacts on the informal economy should be assessed, as well as on the formal economy.

29. Social impacts to be assessed should include human rights (e.g. as defined by the ILO), working conditions, trade union representation in foreign owned companies, social expenditure (as affected by loss of tariff revenues) and differential gender effects.

30. The importance of the presentational style was stressed. The reports should have a clear statement of operational objectives, to which the reader can relate the outputs of the study.

31. A number of methodological challenges were highlighted, including, the distinction between causation and correlation; the limited availability of data at the sectoral level; the need to isolate the impact of the EMFTA from impacts due to non-EMFTA induced changes; the distinction between before- after and with-without scenarios; choice of selection criteria for groupings of countries; screening criteria for key sectors (P30) should include the importance of the sector to the countries themselves.

32. Support to the SME sector should be considered as a potential mitigation measure.

33. The study should draw on the existing evidence relating to the adjustment costs of structural adjustments programmes in the region, and should allow for the intersectoral effects of trade liberalisation

34. The Euro-Mediterranean Heritage Programme should be included in the list of agreements relevant to the SIA EMFTA study.

Closing Comments from the Chair

Mr Jean-Marc Riegel closed the meeting by thanking participants for their attendance at the Public Meeting and for their valuable comments and suggestions. He stated that the consultants would be seeking to incorporate the various suggestions that had been made at the meeting into their ongoing work on Phases 1 and 2 of the SIA-EMFTA study. Mr Riegel also assured participants that dialogue and consultation with interested parties and stakeholders, particularly in the Mediterranean region, would continue to be an integral part of the SIA-EMFTA process.

IDPM 29 November 2004

List of Participants

European Commission
Patrick Laurent	DG External Relations
Jean-Marc Riegel	DG EuropeAid
George Strongylis	DG Environment
Mattia Pellegrini	DG Environment
Laurent Bardon	DG Trade
Catherine Eginard	DG Trade
Damien Fontaine	DG Agriculture
Lionel Mesnildrey	DG Agriculture
Florence Liou Ginguay	DG Enterprise and Industry
Viviane André	DG Enterprise and Industry
Hanane Mouawad	DG Health and Consumer Protection
Susana Fuertes	DG EuropeAid
Regional representatives
Abdelfedah Sahibi	Ministry of Environment, Morocco
Alexia Pizzuto	Malta Council for Economic and Social Development (MCESD)
Amany Fahmy	Egyptian Mission to the EU
Andrea Amato	Institut de la Méditerranée (IMED)
Celine Nicodeme	CEC ECFI
Christian Buelens	Centre for European Policy Studies
Constantinos Papadrinstriou	RP-Greece
Edwin Calleja	European Economic and Social Committee (EESC)
Ftouhi Mohauad	Arab Network for Environment and Development (RAED)
Gidon Bromberg	Friends of the Earth MEDNET
Guillaume Légaut	CIDSE
Ibrahim Magdi	Environment and Development Action (Enda Maghreb), Morocco
Lidija Rutar	Ministry of Economy, Slovenia
Lucien Chabasson	Plan Bleu
Lutwin Strauch	Association of German Chambers of Commerce and Industry
Maehdi Bekhedda	Embassy of Algeria
Maria Soriano Sánchez	UNICE
Meyrann Schneider	European Environment Bureau (EEB)
Michael Wells	European Economic and Social Committee
Najib Saab	Environment and Development Magazine, Lebanon
Nir Kedmi	Ministry of Environment, Israel
Patricia Jimenez	Heinrich Boell Foundation
Rabih Mattar	Ministry of Economy and Trade, Lebanon
Rana Sameha	Ministry of Economy and Trade, Lebanon
Samia Galal Saad	Centre for Environment and Development for the Arab Region and Europe (CEDARE)
Shorjian Jérôme	CEFS
Skhiri Monia	UMCE, Union of Industry, Trade and Handicraft, Tunisia
Stephane Quefelec	Plan Bleu
Tareq Z Touqan	Palestinian Federation of Industries
Thomas Ruddy	EMPA Swiss Federal Labs
Vanya Walker-Leigh	MIO-ECSDE, Malta
Zaki Ayoubi	Amman Chamber of Industry
SIA-EMFTA consortium
Dirk Willem te Velde	Overseas Development Institute
Carlo Altomonte	Bocconi University
Raymod Colley	Environmental Consultant
Carol Chouchani Cherfane	UN ESCWA, Beirut
Colin Kirkpatrick	University of Manchester
Clive George	University of Manchester
Louhichi Kamel	CIHEAM, Montpellier University