Report of the meeting on 25 July 2002 with stakeholders, civil society, third countries, the European Commission and the consortium
on Sustainability Impact Assessment (SIA) of WTO negotiations.
DG Trade organised a meeting for representatives of stakeholders, civil society, Member States, European Parliament and third countries, at which the contractors from Manchester University presented their current work as regards the sustainability impact assessment of the Doha Development Agenda (DDA).
Over 80 people attended the meeting (list of participants).
During the discussion some key points emerged and are listed below.
Introduction and update of trade negotiations:
Responding to a recurring demand from NGOs, DG Trade agreed to link the discussion of current SIA work with DDA negotiations and therefore offered a short introduction related to the state of play of WTO negotiations.
The meeting started with a presentation of an overview of the state of play of WTO negotiations by Robert Madelin (Director DG Trade), completed by Sandra Gallina (DG Trade, WTO unit, market access)
Since the launch of the DDA, a lot of proposals have now been put on the table and exchanges of view are underway. In this process, the EU is acting very constructively and contributes largely to the debate by producing submissions in all negotiation groups.
More specifically on market access, modalities are to be defined by the end of March 2003. The first submission of the EU presented general principles regarding the negotiation approach (e.g. comprehensive approach, modalities).
Robert Madelin presented the main principles of EU SIA studies and in particular:
- SIA are carried out in a transparent manner by external consultants,
- SIA should be a decision making tool to help negotiators to define their position
- SIA process is based on scenarios which are designed by the Consultant in discussion with the Commission and must not be seen as an EU position.
As SIA study is launched in an early stage of the DDA, results of the SIA will have the possibility to influence our approach to these negotiations.
After this short introduction, members of the Consortium made a presentation of their current activities and results of the inception report of two studies:
- Qualified preliminary assessment of the Doha Development Agenda
- Sector studies for environmental services, market access and competition
The Commission flagged the different stages of advancement of these two reports as the first one is a draft, which was not read and commented by the Commission, and the second one, which was already amended by the Commission. The decision was taken by the Commission to publish the inception report of the “Qualified preliminary assessment of the DDA” to feed into and enhance the dialogue of today’s meeting.
The presentation was followed by discussion with the participants.
All participants mentioned their strong interest in SIA as an ex-ante exercise at this negotiation stage when the EU is refining it’s negotiation position.
Aim of the SIA:
The question of the timing of the SIA was raised, as the final report will be delivered in March 2003 whereas negotiations will end 2004 (ETUC).
The Commission made it clear that the purpose of this study is to identify main sectors studies (as time is lacking to cover all issues) and to make proposal of further investigations. At the end of the SIA process (near 2005) a full and global evaluation will have been conducted taking into account benefit and results of sector studies.
SIA could also play an important role in the agreement implementation and could be extended for that purpose in another contract.
The Consultants noted that follow up of SIA in the implementation phase of a trade agreement was proposed in their last methodological development and would be available for such an extension of their current work.
Analysis and assessment
methodology:
A representative from Italy pointed out the role and use of economic models (in particular model developed by the MIT) in the methodology.
The Consultant agreed that economic modeling should play an important role in the analysis (in particular through the literature review) but also recalled that these models rely on several assumption (e.g. conditions of perfect competition) and have internal limits: these tools have to be completed by additional inputs.
A representative of the business sector (ESF) had the impression that the report did not sufficiently bring out the positive role of liberalisation on sustainable development and that the consultant should take greater account of the positive impacts of past liberalisation in their analysis.
The Commission made it clear that the scope of the study is limited to an ex-ante analysis.
The consultant added that the assessment is based on a baseline scenario (implementation of all past agreement) which integrates the implementation of all previous agreement: the impacts are assessed only according to implementation of current trade negotiations.
SIA Process:
Several participants asked for information on the best way to participate in the SIA study. The Commission pointed out the need for them to establish direct contacts with the consultant and to give inputs and comments to him.
Design of sectors:
The question of the scope of sector study was raised (animal welfare), especially in the case of agriculture whose complexity could be tackled by identifying sub-sectors e.g. non-trade concerns). The consultant is aware of that problem but at the same time noticed the tension between aggregation and disaggregation: the study should adapt the level of precision on the level of results needed for being operational and useable by negotiators.
Replying to some interventions which were questioning the absence of agriculture in the first set of sectoral study, the Commission mentioned the fact that the only completed sector study relates to the agricultural sector (“food crops” SIA completed by the Stockholm Environment Institute).
Some other concerns (FERN) were raised on the design of sector and on the importance of cross cutting issues like investment. The Commission and the consultant agreed with this analysis and emphasised the role of this preliminary assessment whose purpose is in particular to identify main links between trade sectors and cross cutting issues. Current sector study (see below) on competition is clearly an example of this kind of analysis.
As indicated in the introduction,
the Commission had to underline that the scenarios proposed by the consultant
had not not yet been commented on by the
Commission and that some misinterpretation of the DDA scenario could arise in
this first draft report.
Some participants showed interest on better understanding the way sectors would be chosen. The Commission and the Consultant replied that future sector studies are not yet defined (the proposal of further sector study is one output of this preliminary assessment) and that a first idea of sector priority should emerge between November 2002 and March 2003.
Conclusion:
The Commission closed this discussion by repeating the key purpose of the meeting, which is to launch a process. Our stakeholders should be aware of the important role they should play in the SIA process. The quality of the final SIA output will depend on their active participation by giving inputs to the consultant as soon as possible.
Comments on this report should be sent directly to the consultant (e-mail chk@man.ac.uk)
Final version of this inception report will be available in September.
Overall comments :
The aim of the SIA study was first discussed: animal welfare representatives suggested that SIA should help the EU to design its policy and should not be only a snapshot of a situation. The Consultant recalled the attention of the participant to the fact that SIA’s aim is not to design policy but is a tool for policy making. To this end SIA are conducted with the help of hypothetical scenarios.
In this respect, the Commission added also that SIA are conducted at first for the EU as implementation of the Treaty (obligation of pursuing sustainability in our policies). Thus the goal of SIA is not to export our negotiation position or our political understanding of trade/sustainability issues.
Some explanations on the country case study (goals, choice of countries) were asked. SIA is carried out on the basis on group countries. The aim of country studies is only to illustrate potential impacts on groups. In this respect countries are mainly chosen according to their capacity to represent the group. The Commission added that small economies should be covered either in this SIA or in joint project with the Capacity Building Task Force (UNEP-UNCTAD).
On the internal SIA process, the Commission and the consultant described the current internal organisation, which includes direct contacts between negotiators and the consultant and consultation of Member States experts and Members of the European Parliament.
A representative of the Lowen University raised the question of the sources of data. The consultant explained that they had been building a network of experts (more than 180 experts) since 1999 which is asked to comment on and participate in the analysis. This broad consultation process can cause problem of data reliability and coherence.
Sector comments :
Environmental services :
ESF point out some issues regarding the way public policy (public procurement, public concession, sewage, whose networks often do not belong to private sector) will be integrated in the analysis and expressed the need to better show the benefit of service liberalisation on sustainable development (in particular economic and social aspects).
The consultant recognised the need of taking into account these public aspects of environmental service and confirmed this should be tackled in the current study.
Market Access:
Non ferrous metals:
COTANCE underlined that some features of export restrictions and tariff escalation in this sector could be extended to leather sector which faces also this problem.
The Consultant mentioned that Leather was seen at the beginning as a potential sector and invited the representative of COTANCE to share data and analysis on the leather issue.
Textiles:
On the textile sector Euratex underlined their will to participate actively in the SIA process and to give inputs to the consultants and expressed technical views:
Ø Sectors and products selection: the study should make distinction on subsectors 62 and 55
Ø Brazil should be studied
Ø The study should integrate the relative inelasticity of EU market due to distribution effects
Ø Emphasis the role of social impacts in the EU
Ø The analysis should take into account the GSP scheme
The consultant encouraged Euratex to share their technical experience and knowledge for the textile study and indicated that the choice of country was not yet definitely made.
The Commission added that, as quotas are out of the scenario, the elasticity issue was very important and should be adequately tackled.
Conclusion on the final inception report on sector studies:
Civil society and participants of the meeting are strongly invited to participate directly to the analysis and to give their inputs to the consultant as a contribution for the midterm report.
Consultant contact: chk@man.ac.uk