global europe and sustainable development

8/8/2019 Global Europe and Sustainable Development

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ReportGlobal Europe and

Sustainable Development Implications or Climate Change and Agriculture

Jens Andersson


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Global Europe a nd Sustainable Development

2009:3

Author: Jens Andersson, [email protected]

Project Manager: Krister Holm,

Naturskyddsreningen

Layout: Anki Bergstrm,

Naturskyddsreningen

Photo: David Herrmann, Shutterstock

Print: tta.45, Stockholm

Order No: 9041

ISBN: 978 91 558 1731 2

Produced with economic support from Sida.Sida has not participated

in the production of the publication and has not

evaluated the facts or

opinions that are expressed.


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Preace rom the Swedish Society or Nature Conservation

Summary

1 Background

. Introduction

. Purpose and Limitations

. Assumptions and Methodology

. Outline

. Climate Change and Food Security

.. Climate change and the development challenge

.. Climate change and trade

.. Agriculture and ood security

..4 Te road ahead: policy options or climate change and organic agriculture

. Eu trade policy and climate change

.. Multilateral and regional trade negotiations

.. EU trade policy: Global Europe

.. Global Europe and sustainable development Perspectives from parners

. Arica

. Asia

. Latin America

Global europe, climate change and food security

. Focus o the analysis

. Scope and Status o Negotiations

. aris and non-tari barriers

.. Background

.. Global Europe and removal o tari and non-tari barriers

.. Discussion

.4 Services

.4. Background

.4. Global Europe and services

.4. Discussion

. Investment

.. Background

.. Global Europe and investment

.. Discussion

. Access to Natural Resources

.. Background .. Global Europe and natural resources

.. Discussion

. Public Procurement

Table o Contents


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.. Background

.. Global Europe and public procurement

.. Discussion

. ranser o echnology and Intellectual Property Rights

.. Background

.. Global Europe and IPR

.. Discussion

. Conclusions

Swedish Government Positions

. Swedish Government Positions

. Discussion and Recommendations

Literature

Acronyms and Abbreviations

Footnotes


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Mean temperature is rising throughout the world. A tem-

perature increase o even a ew degrees would have dra-

matic consequences or the environment and or society

Climate eects hit the worlds poor hard. Te already

vulnerable agricultural and ood production systems in

developing countries are being damaged by climate change,

with increased drought in large areas and torrential rainall

in other areas. Can EU trade policy support developing

countries in meeting these chal lenges?

Tis report examines the EU trade policy Global Europe

and the trade negotiations being conducted with a range o

less inuential developing countries in Latin America,

Arica and Asia, where a large proportion o the worlds

poorest people live. Te partner organisations o the Swedish

Society or Nature Conservation on various continents con-

tributed to this report. Te opinions expressed in the reportare the authors own and not necessarily those o the Swedish

Society or Nature Conservation.

Te report analyses how trade policy and the various

trade agreements can aect the possibilities or developing

countries to pursue a sustainable development policy and

thereby adapt themselves to global warming and strength-

en their agriculture. Te report also examines Swedens

attitude and contribution to EU trade policy.

Global Europe deals with bilateral and regional trade

agreements and aims to reach more extensive agreements

than have been decided and discussed within the WO.

Trough Global Europe, the EU aims to make it easier or

European companies to sell goods and services globally, to

gain access to energy and other raw materials and to estab-

lish themselves, participate in state procurement and en-

hance protection or European trademarks in developing

countries. At the same time, there are clear statements in

EU trade policy that underline the importance o consid-

eration or developing countries, something that is even

more apparent within other areas, or example EU develop-

ment policy.Climate negotiations and climate agreements are natu-

rally very important or developing countries. Tey deter-

mine the measures to decrease emissions o greenhouse

gases that developing countries must eventually adopt and

how climate-smart technology and adaptation in develop-

ing countries will be unded.

Equally critical or developing countries are the rights

and opportunities to choose their own development path.

rade agreements have a direct impact on this. While trade

liberalisation can bring clear benets or all the parties in-

volved, it can also limit the development opportunities o

developing countries i it is wrongly designed.

Te Swedish Society or Nature Conservation believes it

is important or developing countries to be provided with

good opportunities to increase their resilience to climate

change in dierent ways and to develop sustainable agricul-

ture based on renewable local resources and ecosystem serv-

ices, which contributes towards increasing ood securityand creating a more diversied local economy.

Many years o experience o international development

work, among other things, show that development policy

must oen be owned and implemented nationally and lo-

cally in order to achieve results. At the same time, rich coun-

tries must provide development-riendly trade and agricul-

tural policies. Increased dependence on minerals, oil and

other raw materials and conventional agriculture with ew

export crops is a risky option.

Unortunately, it is clear that the EU is pressing hard in

all negotiations to introduce broad trade agreements that

clearly go beyond the agreements in WO. Exemptions and

transition periods vary, but there is generally a lack o any

adequate systematic consideration o the development levels

o the other party. Te EU demands sometimes contradict

the express wishes o the developing countries. Te state-

ments ound or example in Global Europe on greater con-

sideration or developing countries are only implemented

to a limited extent. It is also clear that trade policy in its

practical application, or example negotiations on new re-

gional agreements, are not harmonised with developmentpolicy.

Preace rom the Swedish Society or Nature

Conservation


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Tere are a number o examples o how trade-related meas-

ures can decrease developing countries policy space and

the benet they can derive rom trade agreements:

Stronglydecreasedimportdutiescanhaveanegativeim-

pact on the local economy, lead to increased dependence on

imports, decreased state income and increased concentra-

tion on export-orientated monoculture.

Far-reachingliberalisationoftradeinservices,withthe

primary aim o avouring companies within the EU, can

bring problems or the distribution o services such as en-

ergy and water.

Limitingtheopportunitiestoregulatedirectinvestments

by European companies in developing countries can have a

negative impact on the local economy.

Restrictionsontheuseofexportdutiescandecreasethepotential to support local processing and sustainable man-

agement o natural resources.

Sweden has expressed strong support or Global Europe to

date. Against the background o this report, and to increase

the potential or EU trade policy to contribute to developing

countries strengthening their agriculture and being better

prepared or climate change, the Swedish Society or Nature

Conservation recommends that Sweden:

Re-evaluatesthedemandsonthelessinuentialdevelop-

ing countries to always enter trade agreements that go be-

yond what has been agreed in WO.

WorksfortheEUtoentertradeagreementsthatfullthe

requirements on compliance and development perspective

ormulated in Global Europe, EU Policy Coherence or

Development and Swedish Policy or Global Development.

TakestheinitiativeforadialogueonGlobalEuropeand

the new Swedish ramework instructions or trade negotia-

tions with Arica on Economic Partnership Agreements.

Providesagoodexampleandincreasestransparencyasregards negotiations, and works to ensure that the EU does

likewise.

Developspoliciesonhowdevelopmentandenvironmental

policy targets can be systematically al lowed to have a more

decisive inuence on positions in trade negotiations with

developing countries.

Drivestoensurethatnegotiationsarealwaysprecededby

thorough consequence analyses.

Establishesconcretewaysoffundingandtransferringthe

technology needed by developing countries to counteract

and deal with climate change.

Te climate crisis and the ood crisis have their worst eects

on the poor in developing countries. A rich country such as

Sweden, which has a tradition o generously ranging itsel

on the side o developing countries and working or compli-

ance with development targets, has great potential to posi-

tively aect developments. Increased trade can be an im-portant tool or global development, but only on certain

conditions.

In uture work, there is a need or much richer analysis

and discussion o the complex links between development,

climate change, ood production and trade and, in par-

ticular, a much stronger regard or the interests and welare

o the poor.

Mikael Karlsson

President

Swedish Society or Nature Conservation


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Te purpose o this report is to analyse the European Unions

current trade policy strategy Global Europe and to explore

to what degree it will contribute or not to the needs o de-

veloping countries to adapt to the eects o climate change,

mitigate greenhouse gas emissions and strengthen ood

security by promoting organic agriculture. Te ocus is on

the negotiations between EU and the Arican, Caribbean

and Pacic (ACP) countries, Andean Community, Central

America and Association o South East Asian Nations

(ASEAN). Because o the complexity o the issues and meth-

odological and inormation constraints, the report is pri-

marily intended as an overview o the issues aimed to stim-

ulate urther discussion and research.

Te basic assumption o this report is that considerable

care should be taken beore the policy space o developing

countries to promote economic development in general andrelated to climate change and organic agriculture in par-

ticular is constrained. Tere are a number o reasons or this,

including the country specicity o the appropriate institu-

tional ramework; the act that unorthodox instruments

have been used all through recent history by todays devel-

oped and emerging countries to pursue various social and

economic objectives; and the uncertainties caused by cli-

mate change and other types o environmental degradation.

In addition, regional negotiations between EU and the re-

gions involved here are problematic because o the unequal

distribution o power, economic might and capacity to ne-

gotiate. Te World rade Organization (WO) comes out

avourably in comparison.

Fighting climate change is a challenge closely related to

sustainable development. Climate policies alone will not

solve the climate problem. Te choice o development path

can be as important as specic measures to mitigate green-

house gas emissions and adapt to its impacts. Consequently,

climate policies need to be integrated into the national de-

velopment policy at all levels and in particular in relation to

energy, orestry, agriculture, water and waste management.Supporting organic agriculture practices may be one venue

to increase ood security and resilience to climate change

while avoiding the environmental costs o conventional

agriculture.

Development policies need to be locally owned and the

corresponding institutional ramework craed to suit local

circumstances. In that perspective, developing countries

should not be pushed to commit to ar-reaching trade agree-

ments because it supposedly is good or their development.

Tey should do it as part o a broader development plan,

with ul l commitment by the countries in question. Tis is

important in the context o this report, because in order to

benet rom trade reorm, a range o complementary do-

mestic measures that require political leadership and re-

sources are needed.

Te links between climate policies and international

trade policy are yet to be ully explored. Nevertheless, EU

trade policies aect the climate policy o developing coun-tries both in terms o the ability o countries to grow in a

sustainable manner and develop response capacity to cli-

mate change and by constraining their policy space as re-

gards certain instruments and specic sectors.

Te Global Europe strategy was adopted in 2006 and is

the external part o the so-called Lisbon process that aims

to promote economic growth and job creation in Europe.

Te strategy aims to open markets or EU industry and deal

with non-tari barriers, with regional trade negotiations as

important instruments. EU aims or broad and deep WO

plus negotiations even with the poorest regional groupings

o concern in this report.

Tis has caused worried responses among civil society

and other actors in these regions as amply exemplied by

the contributions rom Arica, Asia and Latin America in

this report. From dierent perspectives they highlight a

number o problematic issues related to EUs regional ap-

proach, such as the unequal distribution o power between

EU and partners, the negative impact on regional coopera-

tion among developing countries, and the inclusion o WO

plus requirements, in particular in areas such as services,investment and procurement. Tey argue that the end-result

is loss o sovereignty, revenue and domestic industry in the

Summary


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developing regions, while the benets accrue to EU.

Chapter 3 reviews the impact o EU negotiations on the

possible use by developing countries o a number o instru-

ments pertaining to the various elements o the Global

Europe strategy: i.e. import taris and subsidies; liberalisa-

tion o the energy and water sectors (services); investment,

export taxes and quotas (natural resources), public procure-

ment and transer o technology (intellectual property

rights).

Te analysis clearly shows that EU is pushing or broad

WO plus agreements and deep commitments in all the

negotiations under study here. Exceptions and transition

periods vary, but there is no systematic regard to the devel-

opment levels o the negotiating counterparts. In this way

the policy space o the negotiating partners to pursue poli-

cies aimed at protecting their economies and promote eco-nomic diversication is constrained and this could have an

impact on adaptation and mitigation related to climate

change and the possibilities to support organic agricul-

ture.

Tere is a considerable shortage o inormation as regards

the specic implications on the policy space available to

EUs negotiating counterparts to ght climate change and

support organic agriculture. Te sustainability impact anal-

yses conducted, i available, are insufcient and raught with

limitations. Much more detailed analysis, based on past

experiences o trade reorms, is needed to construct a ac-

tual baseline. Considering the complexity o the issues and

the low institutional capacities in many o the countries in

question here strong monitoring mechanisms need to be set

up to ensure that implementation o the agreements do not

run counter to sustainable development objectives in gen-

eral and climate related goals in particular.

As an EU member Sweden is a staunch supporter o

Global Europe in general and broad regional negotiations

in particular, based on the argument that broad agreements

with appropriate exibilities have the greatest development

potential. For example, Sweden is satised with the con-

cluded Caribbean agreement and the exceptions therein and

believes it could constitute a template or the Arican coun-

tries.

Tis report argues that the Swedish position should be

revised to reect the problematic issues related to regional

negotiations and policy space highlighted in this report.Instead Sweden should adopt a more dierentiated and re-

sponsive approach based on demands, development levels

and the capacity to benet rom the agreements. At the very

least, Sweden should advocate that negotiations on the broad

agenda are dealt with in the WO ramework instead o in

regional agreements. In addition, it is suggested that Sweden

should avour a lenient interpretation o the nal agree-

ments as regards implementation and provide political and

nancial backing to strong and impartial monitoring mech-

anisms that oversee the agreements rom a sustainable de-

velopment and climate change perspective.


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1.1 Introduction

Tree urgent crises are holding an increasingly globalised

world in its grasp. In developing countries the ood and uel

crises have increased costs o living and hunger, inciting

people to take to the street to protest. In developed countries,

the nancial crisis has sent house and prices plummeting

and severely shaken condence in the nancial system.

In the midst o turmoil the long-term challenges pre-

sented by global climate change and other types o environ-

mental degradation may be given a lowered priority. Tere

is a risk that the willingness to reduce greenhouse gas emis-

sions and adapt to the consequences o a changing climate

may be negatively aected. At the same time it can be argued

that the policies needed to this eect are closely related to

the ones needed to reduce the vulnerability o nations and

people to various threats. Examples include reducing de-pendency on ossil uel and promoting sustainable ood

production.

International trade policy and rules condition and constrain

the set o options (or policy space) open to national govern-

ments to promote sustainable development. Sometimes or

the good, by providing a stable environment or world trade

and the benets it brings, sometimes or the bad, when de-

veloping countries are not allowed to use certain policies

aimed at economic diversication or become dependent on

cheap imports.

While the latest round o global trade negotiations within

the WO is moving at snails pace, regional and bilateral

negotiations are not. A particular phenomena o the latter

set o negotiations is that developed countries require more

ar reaching commitments rom developing partners coun-

terparts, than has been achieved in the WO context, aim-

ing to conclude so-called WO plus agreements. Tese

additional requirements risk constraining even urther the

policy space o poor countries to determine their develop-

ment paths.

1.2 Purpose and limitations

Tis report is produced within the ramework o the Swedish

Society or Nature Conservations (SSNC) international pro-

gram on environmental policy and its linkages to the prob-

lems o poverty, nanced by the Swedish International

Development Cooperation Agency (Sida). Te purpose o

the report is to analyse the European Unions current trade

policy strategy Global Europe and to explore to what degree

it will contribute or not to the needs o developing countries

to adapt to the eects o climate change, mitigate greenhouse

gas emissions and strengthen ood security by promoting

sustainable agriculture based on local resources and eco-

system services. Te ocus is on the negotiations between

EU and the Andean Community, Central America, ACP

countries and ASEAN.

Te report is based mainly on a survey o existing research

and analysis and is intended primarily as an overview o the

issues aimed to stimulate urther discussion and research.

A key component o SSNCs international work is to en-gage with partners in developing countries. IBON

Foundation (the Philippines), AIPAD (Arica Institute or

Policy Analysis and Development, Zimbabwe) and REDES

(Red de Ecologa Social, Uruguay) have provided vital input

to this report as regards the negotiations between EU and

countries in their respective regions.

When the term developing countries is used in the text, it

reers mainly to small and medium-sized low and mid in-

come economies and least developed countries. Tis is a

large group o countries, which includes the countries in-

volved in the negotiations with EU under scrutiny in this

report. Tere are a number o ormal country classications

o developing countries that are being used in various con-

texts, such as OECD/DAC statistics, while in the WO there

is no established denition. Te aim here is to highlight the

concerns o countries that have considerably less negotiating

capacities and economic power than the EU, which holds

true or the majority (i not all) o the worlds developing

countries.

1.3 Assumptions and methodologyTe basic assumption o this report is that considerable care

should be taken beore the policy space o developing coun-

tries to promote economic development in general and re-

1. Background


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lated to climate change and sustainable agriculture in par-

ticular is constrained. Tis is especially important in view

o the uncertainties ahead as regards the appropriate sus-

tainable development path o each country. Because o the

unequal distribution o power, negotiations between devel-

oped and developing groupings are particularly putting

developing countries at risk o being pressured by stronger

trading partners to surrender policy space. Tese assump-

tions are explored urther in this section.

Te international community has made a number o

commitments to improve the situation or developing coun-

tries. Te commitment to the Millennium Development

Goals and the overall goal to halve poverty by 15 is o par-

ticular importance. Te developed countries, bar the US,

have also committed to ght climate change through the

United Nations Framework Convention on Climate Change(UNFCCC) and the Kyoto Protocol.

Developed countries, and the EU in particular, are in-

creasingly recognising that their policies in various areas

may have an impact on developing countries and need to be

coherent so as to not counteract each other. Te Swedish

Policy or Global Development is a case in point (see chapter

4). Te step rom policy to practice can be long and compro-

mises will inevitably have to be made, but a strong case can

be made that trade policies should contribute to the develop-

ment o the poorest countries, as is in act, one o the over-

riding intentions behind the latest round o WO negotia-

tions, the Doha Development Agenda.

Free trade is important rom an economic efciency per-

spective by allowing goods and services to be produced in

places that are best suited or it and then being exchanged.

From a narrow interpretation o this perspective, a number

o the policy instruments reviewed below aimed at promot-

ing economic diversication and protect the local economy,

such as export taxes and regulation o oreign direct invest-

ment (FDI), may seem to distort the unctioning o the mar-

ket and reduce the welare benets o ree trade. Tey areprone to be captured by vested interests that seek protection

against domestic or oreign competition. Tis may hamper

economic development, by preserving inefcient industries;

competition is clearly a key driver o economic growth and

innovation. Commitments made in international trade ne-

gotiations may be a way to counter such vested interest and

lock-in trade reorm.

Tere are a number o qualications that need to be made

to this view. Te most important one is that the market

needs to be embedded in a suitable institutional and regula-

tory ramework to unction properly or severe social, envi-

ronmental or other externalities may arise. Tere is in gen-

eral agreement as to the basic unction o these institutions.

However, countries at dierent levels o development have

dierent needs and preconditions and it is becoming in-

creasingly recognised that the orm this institutional rame-

work should take is more or less country specic. Tis does

not at all amount to letting trade ow reely. odays devel-oped countries and the Asian tigers, consistently used and

use various protective measures to support their own devel-

opment.3 Economic efciency is also dependent on internal-

ising environmental and social costs and consequently,

measures or doing so are recognised as valid by most inter-

national treaties, including in the sphere o trade agree-

ments.

Another basic assumption o this report is that develop-

ing countries have the right to choose their own develop-

ment path, as exemplied by the commitments in the Paris

Declaration on Aid Eectiveness: Partner countries exer-

cise eective leadership over their development policies, and

strategies and co-ordinate development actions. (Chapter

II) Tis is not only a right in itsel, ollowing rom the prin-

ciple o sovereignty, but also arguably a necessary condition

or successul development.

Experience shows that development policies need to be

nationally or locally owned to be eective and that the cor-

responding institutional ramework need to suit local cir-

cumstances. In that perspective, developing countries

should not be pushed to commit to ar-reaching trade agree-ments because it supposedly is good or their development.

Tey should do it as part o a broader development plan,


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with ul l commitment by the countries in question. Tis is

important in the context o this report, because in order to

benet rom trade reorm, a range o complementary do-

mestic measures that require political leadership and re-

sources are needed, e.g in terms o building regulatory ca-

pacity, tax collection, improving the business climate and

develop programmes or social and environmental protec-

tion. In parallel, i the international community wishes to

address issues such as corruption, bad governance and

human rights abuse in developing countries, means other

than trade policy need to be considered, or example policy

coherency, political dialogue and development coopera-

tion.

o this should be added the issue o power, which is oen

overlooked in economic theory and analysis. Te world is

still a deeply unequal place, even though emerging econo-mies have taken great positive leaps in the last ew centuries.

OECD countries have 15% o the world population, but rep-

resent 70% o world GDP. Te GNI per capita o the OECD

countries is approaching 40 000 USD, while it is 5 540 in

Latin America, 2 300 in China and 952 in Sub-Saharan

Arica.4

Tis unequal situation has proven to be problematic or

the negotiations on regional trade agreements. Tey oen

involve very unequal distribution o power, economic might

and capacity to negotiate. Tey are conducted in a too in-

transparent manner oen under time constraint. Te com-

mitments are oen both considerably broader and deeper

than in WO and may be distortive since they involve only

the partners involved. In addition, there is oen an impor-

tant lack o inormation and analysis available to the weak-

er party on the impact o particular commitments. In par-

ticular, the dynamic eects on the possibility o poor

countries to diversiy their economies are uncertain.

Consequently, it seems urgent to discuss and vet the com-

mitments made under such conditions.

In comparison the WO rules come out avourably.WO has been much criticised or imposing conditions on

developing countries and constraining their policy space.

However, certain problematic areas aside WO actually

provides a general rule-based ramework or international

trade set up to avoid abusive policies that may be detrimen-

tal to trading partners. As such it protects the weakest coun-

tries. Te WO agreements also allow or a number o ex-

ceptions or in particular least-developed countries.

Consequently, the primary ocus o this report is the more

ar-reaching WO plus regional agreements concluded

between developed and developing countries and exempli-

ed by EU, not the WO rules as such.

Moreover, more sustainable development paths will need

to be pursued because o the immediate threats in terms o

climate change and other types o environmental degrada-

tion caused by the current carbon and resource intensive

development model. Tis path should involve adaptation

and mitigation measures related to climate change and thepromotion to sustainable alternatives to conventional agri-

culture. Developing countries have the possibility to learn

rom past mistakes and should have reedom to choose the

necessary policy options to achieve sustainable develop-

ment. Te role o trade policy in this equation is sti ll insu-

ciently explored. It is hoped that this report will make a

contribution to moving ahead on these issues.

Te issue under study in this report can thus be rephrased

as the policy space available to developing country to ght

climate change and support sustainable agriculture and the

potential impact o EU trade policies on this space. Tis does

not imply that the instruments included in this space auto-

matically are to recommend rom a development perspec-

tive. Ideally, their use should be part o a coherent and long-

term strategy or economic diversication and be adapted

to changing circumstances. Certain global standards to

govern world trade are necessary but should be balanced

against the sovereign right and need o developing countries

to preserve policy space in an unequal world.

1.4 OutlineTe report is divided into our main sections. Te rest o the

introduction gives a background to the number o substan-


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tive issues involved and provide elements to the analytical

ramework. Te issues covered are essentially climate

change, sustainable agriculture, EU trade policy and their

interplay.

Chapter 2 summarises the contributions o the partner

organisations listed above. Chapter 3 analyses in order the

key components o Global Europe and the impact on the

policy options o developing countries. Chapter 4 reviews

Swedish positions related to Global Europe and makes pro-

posals or integrating developing country perspectives on

sustainable development, climate change and ood security

into Swedish and EU trade policy.

1.5 Climate change and ood security

1.5.1 Climate change and the development challenge

Tere is now strong agreement that climate change isman-made: Most of the observed increase in global average

temperatures since the mid-20th century is very likely due

to the observed increase in anthropogenic [greenhouse gas]

concentrationsin the words o UNs Intergovernmental

Panel on Climate Change (IPCC). Greenhouse gas emis-

sions must peak in and decrease between and

beore to avoid a temperature increase above

two degrees according to IPCC. Tis is easible rom a

technological point o view and the economic costs are

modest compared to the costs that would be caused by

higher temperature increase.

It is clear that rich countries are behind most o the

change in climate and the poorest countries will be the hard-

est hit since they are the most exposed to natural vagaries

and oen lack resources to adapt.6 Tis will make an already

unequal world even more unequal. 1.4 billion people or a

quarter o the worlds population lived in extreme poverty

in 5 according to revised data rom the World Bank.7Tis

is beore the impacts o the recent global ood, uel and -

nancial crises have been elt.

Climate change will undermine eorts to ght povertyand reach the Mil lennium Development Goals. UNDP iden-

ties ve key transmission mechanisms to this eect: im-

pacts on agricultural production and ood security (through

changes in rainall, temperature and water availability),

increased water stress and water insecurity, rising sea levels

and exposure to climate disasters, transormed ecosystems

and loss o biodiversity and impacts on human health

through spreading o disease.8

Fighting climate change is an integral part o achieving

sustainable development. Climate policies alone will not

solve the climate problem. Te choice o development path

is in many ways inherently linked to specic measures to

mitigate greenhouse gas emissions and adapt to its impacts.9

Developing countries do not have to ollow in the ootsteps

o the developed countries in terms o energy use.

Nevertheless, as developing countries are vulnerable to cli-

mate change and, at least the poorest ones, are not very

carbon dependent in per capita terms they tend to ocus

more on adaptation than mitigation. However, in terms ochoice o development path, mitigation is highly relevant

since developing countries have substantial investments in

areas such as inrastructure and energy ahead. In addition,

policies aimed at mitigation and sustainable development

may be mutually reinorcing.10

In addition, there is a close connection (and sometimes

contradiction) between mitigation and adaptation. Both

types o eorts depend on the same set o available resourc-

es and capacities and both require international cooperation

and national action.11 Since most poor countries oen lack

adequate capacity, technology and nancial resources to

participate eectively in these eorts, they are dependent

on rich countries to provide support in terms o capacity

building, technological transer and nancial ows (in ad-

dition, to o course or the latter group to take the most

important steps in reducing greenhouse gas emissions).12

1.5.2 Climate change and tradeTere are a number o potential links between climate

change and international trade. Tese have yet to be ex-

plored to the same extent as the trade and environmentnexus, but this is now changing. For example, during the

UN climate meeting in Bali in December , an inormal

meeting between trade ministers rom major trading na-


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tions (but none rom Arica) was organised.

Tere are worries that eorts to reduce greenhouse gas

emissions may have detrimental eects on the competitive-

ness o energy intensive industries and that measures such

as climate taris on imports may be used to protect these

industries and prevent carbon leakage.14 In practise, the

eect on competitiveness o carbon policies seem to be mod-

erate, since other supporting policies oen tend to have

compensatory eect and the use o protective trade meas-

ures is severely constrained under WO rules.15 On the

contrary, there is evidence that carbon policies might even

be benecial rom a competitiveness point o view, since

they oster innovation and industrial adaptation to markets

under transormation.

Another issue is whether carbon emissions should be

counted in producing or consuming countries, which mightaect emission reduction responsibilities. Labelling schemes

that inorm consumers o the carbon content o goods may

constitute a barrier to developing country exports, e.g. i

high weight is given to transport and i transport is a deci-

sive actor or the climate impact.

Regulation on the emissions o international transport

has been lagging behind since it does not all under the ju-

risdiction o a particular country. Emission cut obligations

may increase prices o international transport, which could

have a negative impact on trade and service areas such as

tourism and disproportionally aect poor remote countries.

Tese are not issues directly covered by WO.

rade also aects the diusion o energy technologies -

an issue that will be explored more extensively below in

relation to intellectual property rights. Overall the interace

between trade and energy is complex and also involves trade

in energy itsel and policies such as energy subsidies, stand-

ards and labelling. Below, this issue wil l be touched upon in

relation to EU policies on natural resources.

Agriculture and orestry account or over 30% o global

greenhouse gas emissions and trade may aect these emis-sions by changing the way land is being used. For example,

in agriculture, subsidy reorms may be aimed at supporting

agricultural techniques that enhances carbon sequestration

and increases resilience by making use o plant varieties

adapted to a changing climate. Another example is biouels;

any certication o biouels would have to comply with

WO rules and the possibilities to trade in biouels will

depend on negotiations on taris and subsidies in agricul-

tural and industrial products.16

Te low competitiveness o the least-developed countries

makes them particularly vulnerable to climate change and

its trade implications. Tese countries have little domestic

production and are reliant on very ew oen primary export

products, such as minerals and agricultura l products. Te

key element o any climate adapting strategy or these coun-

tries is to develop more diversied and less vulnerable econ-

omies. Development policies have always been struggling

with these issues, but the need to adapt to climate changemakes them all the more acute. Te domestic policies o

LDCs may need to be adjusted, in ways such as prioritizing

agricultural production or ood security and industrial

production o manuactured goods or domestic consump-

tion over export-oriented production. LDC are already rel-

atively open economies, so urther liberalising trade is

mostly not sufcient, instead these countries need to be

provided with broad policy space and exibilities within the

international trading regime.17

Article 2 o the Kyoto Protocol obliges participating

countries to adopt climate policies and measures related to

adaptation and mitigation, such as energy efciency and

promotion o sustainable orms o agriculture. A number

o these measures may aect trade, such as technical regula-

tions and standards, subsidies, carbon and energy taxes and

border adjustment measures and land-use activities, and

their use are thereore potentially aected by WO rules.18

Perhaps this issue wil l not be that problematic, according

to the Swedish National Board o rade (2004), which sees

no great conicts between climate measures and WO:

Friendly coexistence should be possible between the UNFramework Convention on Climate Change, its Kyoto

Protocol and WTO rules. In fact, there is ample scope for


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trade-related measures pursuant to the Protocol to be in ac-

cordance with WO rules. Tis requires that the WO rules

are considered while designing and implementing such meas-

ures.(p. 6) For example, GA Articles XX(b) and (g)

make it possible or WO members to justiy measures that

are either necessary to protect human, animal or plant lie

or health, or i the measures relate to the conservation o

exhaustible natural resources, respectively.19

1.5.3 Agriculture and food securityAgriculture is very closely linked to climate change as has

already been indicated. Most poor people live in rural areas

and depend on arming or their survival, while many de-

veloping countries rely on agricultural exports or income.

At the same time agriculture is a sector that is particularly

vulnerable to changes in weather patterns and other eectso climate change. Agricultural production is also an im-

portant source o greenhouse gas emissions and is closely

related to changes in land use, such as deorestation and land

erosion.20

Te world agricultural system has become increasingly

globalised the last decades (se Box). Overall there has been

a prolonged period o rising agricultural production and

alling prices in the world market, uelled mainly by gains

in productivity through irrigation, improved crop varieties,

and use o erti lizers. Tis transormation has been impor-

tant or eeding the world and has been driven by developing

countries, with the green revolution in Asia as an o-cited

example. Globally, there is no ood shortage on average.21

Trade in agriculture

World agricultural exports increased our-old between

1985 and 2005 to around 450 billion USD, excluding in-

tra-EU trade. This corresponds to an annual increase o

6.7% and was driven by trade in horticultural and proc-

essed products, the latter o which now corresponds to

almost hal o all agricultural exports. As a group the

high-income OECD countries are the largest exporters,

with middle-income countries such as Brazil gaining

world market shares. Arican exports have been losing

ground on the world-market over the last two decades.

There are two important characteristics o the world

agricultural markets that have a particular impact onthe ood production o poor countries. First, the whole

agricultural chain rom inputs (seeds, ertilizers, etc) to

retail (supermarkets etc) is dominated by major tran-

snational corporations , which are intertwined in various

partnerships and networks. These include input provid-

ers such as Cargill and Monsanto, processors such as

ConAgra, ood brand companies such as Nestl and

supermarkets such as Carreour.

Second, as is well-known, developed countries apply

agricultural policies to support their own armers. The

main instruments are border protection in the orm o

taris and quotas, export subsidies to enhance com-

petitiveness in the world market and direct support

payments to producers. Despite much criticism, the

reorm process and the WTO negotiations on the topic

are moving very slowly; agricultural support in OECD

countries (mainly EU, US, Japan and South Korea) is still

2.5 times that o international aid disbursements (250

million USD in agricultural support compared to around

100 million USD in international aid).

Source: OECD (2008), Morgan et al (2007), World Bank (2007) and OECDWebsite accessed on 13 October 2008


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But the riches are badly distributed; more than million

people still do not have ood every day, in spite o the act

that ood is a human right according to the UN. 22 Sub-

Saharan Sahara has largely been le out o agricultural

progress, because o bad policies and under-investment, and

agriculture has been largely absent in national development

plans and international development cooperation.

Te current global ood crisis adds to the burden o poor

people. FAO estimates that an additional 75 mill ion people

became subject to undernourishment in 2007 mainly be-

cause o soaring ood prices, with urther increases likely.

Tis has reversed a positive trend o alling hunger, with

Asia and Sub-Saharan Arica being the hardest hit, and will

make it even harder to halve hunger in the world by 2015,

which is one o the Millennium Development Goals.24

Looking ahead, climate change is not the only challengeto agricultural production. Environmental degradation,

rising competit ion or land and water, higher energy prices,

and doubts about uture adoption rates or new technologies

also constitute uncertainties or uture ood production. In

addition, it is estimated that global cereal production will

have to increase by nearly 5% and meat production by 85%

rom 2000 to 2030 to meet projected demand, to which

should be added booming claims or crops that can be

turned into biouel.25

How should the challenges outlined above be met? Te

dominating model is to rely on a global division o labour,

in which countries specialise in certain types o ood pro-

duction. Food becomes a commodity to be exported or im-

ported. Production is large-scale and based on convention-

al methods to increase productivity through monoculture,

external inputs and ossil uels.

However, while having enabled increased harvests, the

environmental, health, cultural and social costs o conven-

tional agriculture are high and there is a growing critique

o its methods. Morgan et a l. (2007) argues that ood is not

a commodity like any other good and that globalization o

the ood sector is uniquely constrained by nature and culture;

ood production requires the transormation o natural enti-

ties into edible orm, while the act o eating itsel is a pro-

oundly cultural exercise (p. 8)

Food sovereignty

The concept o ood sovereignty is advocated by many NGOs .

Food sovereignty is the right o peoples to healthy and cultur-

ally appropriate ood produced through ecologically sound

and sustainable methods, and their right to dene their own

ood and agriculture systems. Food sovereignty is a more

holistic concept than that o ood security that tends to ocus

on access to an adequate ood supply.

Source: www.viacampesina.org, www.nyeleni2007.org and FAO (2003)

Instead, sustainable approaches, ocusing on e.g. organic

agriculture, local resources and eco-system services receive

increasing attention world-wide, in particular to counter

climate change (see Box).26 Such alternatives have the po-

tential to greatly contribute to ood security, in particular

in the worlds most vulnerable environments, while consid-

erably reducing the costs associated with conventional ag-

riculture.27 In addition, growing demand is creating an in-

creasingly large market or organic produce.

Organic agriculture can be broadly described as a ho-

listic production management system that avoids use o

synthetic ertilizers, pesticides and genetically modied

organisms, minimizes pollution o air, soil and water, and

optimizes the health and productivity o interdependent

communities o plants, animals and people. (FAO, 7, p.

2) Certied organic agriculture is commercially practiced

worldwide in 120 countries, representing 0.7% o global

agricultural lands and a market o USD 40 billion in 2006.

Non-certied organic systems may represent at least anequivalent share in subsistence agriculture o developing

countries (see Box).28


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Sustainable agriculture in Ethiopia

Sustainable agriculture and ecological land management

has been promoted in the Ethiopian region o Tigray by the

Institute or Sustainable Development in collaboration with

regional and local actors. The project used sustainable

practices such as composting, water and soil harvesting

and crop diversifcation to the beneft o poor armers and

communities. These benets include increased yields and

productivity o crops, improved hydrology through raised

water tables and permanent springs, improved soil ertil-

ity, rehabilitation o degraded lands and increased incomes.

The project is armer-led and the successes are such that

the approach is spreading to other parts o the country and

getting attention at national level.

Source: Araya and Edwards (2006)

Organic and related agricultural methods are well suited or

poor smallholder armers, as they rely on low levels o ex-

ternal inputs, locally available materials and a diverse ap-

proach to ood production.29 Tis approach is advocated by

civil society, researchers, institutions, and even govern-

ments, but stronger public intervention is in general neces-

sary to create a air playing eld as the sector expands, in

order to protect small producers and strengthen the position

o developing countries actors on international markets.

Policy-makers are increasingly becoming aware o the im-

portance o organic agriculture, as is exemplied by the

conerence on Ecological Agriculture: owards Food

Security and Sustainable Rural Development in Arica or-

ganised by the Arican Union and FAO at Arican Union

headquarters in November this year.30

1.5.4 The road ahead: policy options for climate

change and organic agriculture

So what policy choices are there or developing countriesconronted with climate change? As emphasised in the

cal leadership; integrated approaches; and policy coherence.

(Sathaye et al, 2007, p. 717)

Consequently, climate policies need to be integrated into

the national development policy at all levels. Decisions in

areas such as scal policy, insurance practices, electricitymarkets, trade and orest management, seemingly unre-

lated to climate policies, may have proound eects on mit-

igation and adaptation choices.31 A key issue is the capacity

o developing countries to design and implement appropri-

ate climate policies (response capacity). Tis capacity is

closely related to a countrys development path and in par-

ticular the income level. o put it bluntly, wealth increases

the ability to pay or adaptation and mitigation.

It ollows that EU trade policies aect the climate policy

o developing countries at two levels: First, they inuence

the overall ability o countries to grow in a sustainable man-

ner and develop response capacity in relation to climate

change. In this respect the quality o growth matters and a

key issue is i trade reorm allows poorer countries to diver-

siy their economies to al low or broad-based growth, re-

duce dependence on a ew economic activities or goods,

preserve natural resources and spread the wealth to all

groups o the population.

Second, as highlighted above poor countries commit to

constraining their policy space as regards certain instru-

ments and specic sectors in negotiations with EU. A numbero the specic instruments will be reviewed in chapter 3.

methodology section above, each country has a uniqueset o capacities and pre-conditions that make the designo development and climate policies highly context-specic. Climate benets need to be weighed againstdevelopment benets or drawbacks. Tis should be done

through a democratic process with the involvement okey stakeholders in the public and private sectors andcivil society, like any other decisions:

Ultimately, devising eective climate change mitigation

strategies depends on good governance practices, which is the

essence o sustainable development, or example, whole-o-

government decision-making; synergies among economic,

environmental and social policies; coalition-building; politi-


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At sector level there are a number o adaptation and mitiga-

tion options available to developing countries, in particular

in relation to energy, orestry, agriculture, water and waste

management (see able). As apparent rom the table, the

adaptation and mitigation options are in many instances

closely related. In some cases they yield benets in terms o

sustainable development, while in others trade-os will

have to be made.32

Specic policy actions to promote organic agriculture

include investment in training and ski lls development, sup-

port to smallholders, development o national and interna-

tional regulation and standards33, integration o organic

practices into national agricultural development plans and

poverty reduction strategies, targeted subsidies, scal meas-

ures and other policy instruments to inuence producers

decisions, removal o disincentives (e.g. subsidies or syn-

thetic agricultural inputs), protection o organic lands rom

transboundary contamination (e.g. government procure-

ment o local organic produce to supply public institutions

canteens, such as schools and hospitals.34

In addition, the share o organic research in agriculture

is almost nil in most countries and current allocations in

developed countries do not exceed 1 percent o total research

budgets. Key areas or uture research include areas such as

organic soil ertility, organic animal husbandry, breeding,

landscape management, arm economics and organic mar-

ket dynamics.35


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Mitigation

Energy supply and use

Energy efciency improvements in all areas, including buildings,

transportation, industry, and energy supply, and increased

reliance on domestic or imported low-carbon energy sources

Forestry Deorestation control, aorestation and ossil uels substitution

Agriculture Crop land, water, grazing and livestock management

Waste management Landfll controls and gas recovery, biological treatment o waste and

wastewater, incineration and waste minimisation

Adaptation

Water resourcesImproved water management or drinking and agriculture,

including rainwater harvesting, water storage and diversifcation

o irrigation techniques

Agricualture and ood saety

Crop diversifcation and improvement, improved livestock and

fsheries breeding and arming techniques, development o local

ood banks or people and livestock, and improved local ood

preservation

Human health

Improved health care through community emergency preparedness

programmes, better health education, better access to primary

health care including measures to fght malaria

Terrestrial ecosystems (including

orestry)

Better land and land use management through erosion control

and soil conservation measures, agroorestry, orest fre

management, alternative energy sources to wood and charcoal,

and better town planning

Coastal zones and Coastal zone management including coral monitoring and

restoration and improving coastal deences through

aorestation, reorestation,Marine ecosystems Set-back areas and vegetation buers

Source: Adapted from Sathaye (2007, table 12.4, pp. 727-728) and UNFCCC (2007, table V-5, p. 31)

Table: Examples o mitigation and adaptation policies in developing countries


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1.6 EU trade policy and climate change

1.6.1 Multilateral and regional trade negotiationsEU trade policy needs to be discussed in the context o glo-

bal multilateral and regional trade negotiations. At multi-

lateral level, the most recent WO trade negotiation round,

the so-called Doha Development Agenda is moving very

slowly and in the summer o 8 talks collapsed.36 In paral-

lel with multilateral eorts, countries have engaged in re-

gional economic integration. In recent years, this process

has accelerated or both political and economic reasons;

there are now nearly 400 so-called regional trade agree-

ments (RA) scheduled to be implemented by 2010.37 In

particular, there is rustration with the slow progress o the

multilateral trade negotiations, not the least rom the side

o the US that embraced regionalism in the 1980s .38 Te

North American Free rade Agreement (NAFA) betweenthe US, Canada and Mexico was created in 1994.

1.6.2 EU trade policy: Global EuropeTe Global Europe strategy was adopted in 2006 and basi-

cally aims to promote European competitiveness. EU had

until recently mainly pursued its interests through multi-

lateral negotiations, but the regional approach o the US and

the emergence o new large trading nations, such as China,

India and Brazil, have incited the EU to adopt a more re-

gional approach to deend its interests. Te Global Europe

strategy is part o the so-called Lisbon process, which orig-

inally aimed to make the EU the worlds most competitive

economy. In 2005, the process was reoriented to ocus on

economic growth and job creation in Europe and Global

Europe is the contribution o trade policy to these objec-

tives.39

Te Global Europe strategy emphasises the importance

o both good internal policies to uphold competitive mar-

kets, openness and social justice and external policies di-

rected at opening markets abroad:

rejection o protectionism at home must be accompaniedby activism in creating open markets and air conditions or

trade abroad. Tis improves the global business environment

and helps spur economic reorm in other countries. It rein-

orces the competitive position o EU industry in a globalised

economy and is necessary to sustain domestic political sup-

port or our own openness. Tere are two core elements in

pursuing this agenda: stronger engagement with major

emerging economies and regions; and a sharper ocus on bar-

riers to trade behind the border. (p. 6)

Te main elements o the strategy are:

a) aris and non-tari barriers, such as unnecessarily

trade-restricting regulations and procedures.

b) Access to resources in the areas o energy (in particular),

metals and scrap, primary raw materials, including certain

agricultural materials, hides and skins.

c) Intellectual property, in particular as regards enorce-ment o existing commitments in emerging economies, such

as China.

d) Services, which are the cornerstone o the EU economy.

e) Investment, to create a more predictable investment cli-

mate or EU business.

) Public procurement, which is still sheltered rom multi-

lateral regulations and constitute major trading opportuni-

ties or EU exports.

g) Competition, to ensure European rms do not suer in

third countries rom unreasonable subsidisation o local

companies or anti-competitive practices

Te strategy underlines that EU remains committed to

WO, but argues extensively or increased use o regional

trade agreements. Here an interesting distinction is being

made, which is sometimes overlooked; on the one hand

between negotiations with ACP countries, the Andean

Community and Central America, which are related to EUs

development and neighbourhood objectives; and new ree

trade negotiations with regions, such as Asia, o economic

interest to the EU and which are underserved by currentagreements.


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On the Economic Partnership Agreement (EPA) negotia-

tions with ACP, the Commission states: [a]symmetric

trade liberalisation and attention to sustainability consid-

erations rather than reciprocal trade opening are the objec-

tive here (EC, 6b, p. 11), in addition to providing trade-

related technical assistance. In practice though, the EU does

not seem to make a very clear distinction between agree-

ments with a development ocus and agreements with a

narrow EU-oriented economic ocus as will be discussed in

chapter 3.

Overall, the criteria or selecting potential ree trade

areas are economic, in a EU-geographically narrow and

short-sighted interpretation, and include market potential

and the level o protection against EU export interests.

Priorities in this group are ASEAN, Korea and Mercosur,

ollowed by India, Russia and the Gul Co-operationCouncil. EU believes China requires a separate approach

because o its importance. Negotiations have recently been

launched with all these parties, except with Mercosur, which

started in 2000.40

In October 2008, the EU rade Commissioner Peter

Mandelson stepped down and was replaced by Catherine

Ashton, previously the leader o the British House o Lords.

At the time o writing it is unclear i and how this will aect

EUs trade policy.41

It is important to view Global Europe as only the recent

contribution to EUs external regional trade policies. EU

had concluded a number o bilateral agreements with se-

lected third countries prior to the adoption o Global

Europe. Tese include a Customs Union with urkey,

Stabilisation and Association Agreements with South-

Eastern Balkan, Association Agreements with countries in

the Southern and Eastern Mediterranean (e.g. Algeria and

Jordan), agreements with Chile and Mexico, and a rade,

Development and Cooperation Agreement with South

Arica.42

Te negotiations or EPAs have a history o its own. TeArican, Caribbean and Pacic countries involved share a

colonial past with Europe and relations between the two

country groupings became regulated by the Lom

Convention in 1975. It provided aid and preerential market

access to the EU market or ACP countries. In the 199s the

Lom Convention was challenged in the WO because it

was more generous to the ACP countries than the preer-

ences EU oered to other developing countries under its

General System o Preerences (see Box).

EUs system o trade preerences towards

developing countries

Like other developed economies, EU oers non-

reciprocal preerential access to the EU market to

developing countries through its General System o

Preerences (GSP). There are three separate

arrangements:

1. The standard GSP, which provides preerences to 176

developing countries and territories through duty-ree

access or tari reductions;

2. The GSP+, which oers additional preerences to

support vulnerable developing countries in their

ratication and implementation o relevant

international conventions in the elds o core human

rights and labour standards, sustainable development

and good governance;

3. The Everything But Arms arrangement, which

provides duty-ree, quota-ree access or the 50

Least-Developed Countries.

The total volume o imports to the EU market under the

three arrangements amounted to around 57 billion

EUR in 2007. The GSP o developed countries is

regulated in the WTO by the so-called Enabling Clause

that was adopted in 1979. It enables developed

members to give dierential and avourable treatmentto developing countries.

Source: http://ec.europa.eu/trade/issues/global/gsp/index_en.htm and www.wto.org


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Te Cotonou Partnership Agreement, which replaced the

Lom Convention in 2000, reects the WO ruling. In the

agreement, EU and ACP commit to negotiate and conclude

reciprocal trade agreements (EPAs) that comply with WO

rules by the end o 2007. Tis requires the phasing out o

ACP trade preerences and progressive removal o trade

barriers between the ACP and EU. Most o the trade liber-

alisation will have to come rom the ACP side, since almost

all imports to the EU rom the ACP already enter reely.43

EPAs have to comply with the WO rules that regulate

regional trade agreements; in particular, the requirements

o Article XXIV o the General Agreement on aris and

rade (GA) on regional trade agreements. Article XXIV

sets clear guiding principles, in particular by stating that

substantially all the trade has to be liberalised in an RA.

However, the actual application is problematic, both be-cause o uncertainties related to the legally binding inter-

pretation o the provisions and because the rules are subject

to on-going negotiations. Particular uncertainties relate to

the share o trade that needs to be liberalised (90% o the

total volume according to EU) and the transition periods

allowed (10 years is the base-line, but longer periods exist).

As a consequence, it is possible to consider reciprocal EPAs

o dierent scope and depth that sti ll are WO compatible,

while other alternatives, not based on reciprocity, would

require changes in the WO rules.44

Aer an initial period o discussions at all-ACP level,

negotiations between EU and various regional ACP constel-

lations were launched in 3 and 4. ACP countries that

are LDCs do not need to conclude an EPA to enjoy duty-ree

access under the Everything But Arms arrangement, while

non-LDCs would be conronted by less benecial GSP pre-

erences in the absence o an EPA.

Inormation on the current status o negotiations or

EPAs and the other negotiations reviewed in this report can

be ound in chapter 3.

1.6.3 Global Europe and sustainable developmentSustainable development is clearly not the overriding con-

cern o Global Europe. Tere are, however, a number o

complementary EU mechanisms that could be used to re-

ocus the market-opening ocus o the strategy.

First, there are other EU policies that ocus on sustain-

able development, in particular the EUs Sustainable

Development Strategy, to which there is a brie reerence in

the beginning o Global Europe strategy.45 It states as regards

global poverty and sustainable development challenges that

the overall objective is to actively promote sustainable

development worldwide and ensure that the European

Unions internal and external policies are consistent with

global sustainable development and its international com-

mitments. (p. 20) In particular, EU will increase eorts

to make globalisation work or sustainable development by

stepping up eorts to see that international trade and invest-

ment are used as a tool to achieve genuine global sustainable

development. (p. 21) EU is also rather advanced in terms opolicies to deal with climate change (see Box).

More generally, policy coherence or development is em-

bedded in the EU treaties. Te EU is obligated to take into

account the development objectives in any policy that is

likely to aect developing countries according to articles 177

and 178 o the reaty establishing the European Community.

However, the EU Commissioner or Development Louis

Michel recently admitted that the EUs policies will not al-

ways be coherent with development objectives.46

Second, Global Europe mentions some issues related to

the process and content o uture agreements. Tey should

cover sustainable development concerns by addressing en-

vironmental and social issues in addition to economic con-

siderations. Sustainability Impact Assessments (SIAs)

should be used to incorporate environmental and social

chapters and clauses covering in particular the necessity not

to relax existing standards to attract oreign investment, the

importance o enorcement, exception clauses related to the

protection o human health and the environment, capacity

building and technical assistance(EC, 2006b, p. 18)


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Tird, EU has high ambitions as regards trade-related de-

velopment cooperation (Aid or rade). Tis type o sup-

port can contribute to enhancing the development eective-

ness o trade policy, by strengthening capacity and

institutions and nancing necessary inrastructure, but also

distort domestic policy making in poor countries and be

used by donors or political ends. 47 Tere is a huge literature

on best practice and eectiveness o development coopera-

tion in general and Aid or rade in particular.48 Sufce to

state in this context that aid cannot at all substitute ully or

air trade agreements or good domestic policy making.

EUs policies on climate change

In a global perspective EU is somewhat o a precursor in

terms o climate policies, not the least because o the poor

perormance o other developed countries, in particular

the US, and other large emitters. EU is taking positive,albeit insufcient, steps in fghting climate change, by e.g.

actively promoting the Kyoto agreement and committing

to cut greenhouse gas emissions by 8% rom the 1990

levels by 2012. In addition, the EU Emission Trading System

is, despite its faws and criticism, an innovative model or

emission reduction.

EU leaders have committed to cut its greenhouse gas

emissions by 30% o 1990 levels by 2020 provided other

developed countries commit to comparable reductions

under a global agreement and by at least 20% independ-

ently o what other countries decide to do. At the same time

experience shows that it is easier or EU countries to com-

mit to emission targets than to actually implement them.

On the trade side, the ormer EU trade commissioner

Mandelson argued that a solution to climate change needs

to incorporate the right o developing countries to grow.

As a consequence, ha saw a need to break the link between

economic growth and rising carbon emissions through new

power sources, more ecient energy use and new behav-

iour patterns. Trade policy should, according to the com-

missioner, contribute by spreading green technology and

by giving incentives to good environmental policy.

Source: Harris (2007), http://ec.europa.eu/environment/climat/home_en.htm accessed, http://www.euractiv.com/en/transport/france-pushes-leniency-car-co2-caps/article-175945 a, http://ec.europa.eu/commission_barroso/mandelson/speeches_articles/sppm217_en.htm


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2. Perspectives rom partners

Te ollowing three sections are summaries o a number o

papers produced by AIPAD (Southern Arica perspective),

IBON and REDES. Tey are presented to give a Southern

perspective and interpretation in this report and do not

necessarily reect the opinions o the author o this report

or SSNC.

2.1 Arica

Tis section is a summary o the ollowing documents pro-

duced by AIPAD: Masiiwa and Hazvina (2008), Hazvina

(2008) and Masiiwa (2008).

Greenhouse gas is mainly emitted in developed coun-

tries, but it is the poor in developing countries that are the

most aected. Climate change has shown itsel in Southern

Arica through droughts and ooding, with negative eects

on ood security and livelihoods. Tis is compounded by alack o local adaptive capacities and technology. In addition,

Arican countries are currently being squeezed between

competitive pressures to boost productivity caused by lib-

eralisation and the wish to avoid pursuing a greenhouse

intensive development path.

Inormation on trade and climate change in Arica is

scant, but AIPAD has identied some general issues. On the

negative side, these issues include:

Increasedemissionscausedbytradeliberalisationthrough

boosted production and transport.

Moreimportsandlesslocalproductionusingenviron-

mentally riendly labour intensive methods (e.g. in agricul-

ture) caused by tari cuts.

Increasedexploitationandexportsofresource-intensive

products. Instead Arican countries should develop energy

sources, including lobbying in the WO or more avour-

able policies in the areas o RIPs, investment, energy and

sanitary and phytosanitary measures (SPS) to enhance in-

vestments and technology transer.Constrainedpolicyspacetopursueenvironmentalpoli -

cies, such as export taxes and environmental taxes on im-

ports currently banned by EPA and WO respectively.

Lossofexportmarketsbecauseofhighenvironmental

standards. In the short term, Arican countries need to par-

ticipate in developing environmental standards in export

markets. In the long terms, they need to invest in environ-

mentally clean technologies or both production and trans-

port. Support rom developed countries and appropriate

IPR and investment policies are needed. Te box lists some

measures suggested by AIPAD to improve transer o clean

technologies in the RIPS agreement.

Promoting clean technology transer in the

TRIPS agreement

Amend TRIPS so that developing countries can be

excluded rom patentability o green technologies. Make developed countries pay for the licenses to pro-

duce such technologies in the South, where there is

interest by the developing country governments. The

drawback is that this could divert existing aid money

rom other essential areas i the resources used are not

additional.

Make developed country governments provide re-

search and development unds or climate-riendly

technology innovation so that the knowledge remains

in the public domain or easy access.


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Te trade and climate nexus may also, according to AIPAD,

provide opportunities or Arican countries, i suitable sup-

port policies are put in place:

Enhancedlocalvalue-addedinAfricancountriesinsec -

tors such as ood processing, textiles and clothing, chemi-

cals and l ight machinery to enhance employment and re-

duce greenhouse gas emissions rom transports.

Productionofenvironmentalgoodsandservices,e.g.re-

lated to natural resources and renewable energy.

Productionofbiofuels,inparticular,eventhoughtheissue

is complex. Opportunities include improved energy secu-

rity and efciency, new market opportunities, rural develop-

ment and reduced greenhouse gas emissions. Potentialproblems are linked to land ownership, competition or

land, deorestation, monocropping, water pollution, ood

security problems, poor labour conditions and unair dis-

tribution o benets along the value-chain. Te net eect is

dependent on a number o actors, such as crop, cultivation

method, conversion technology and area.

Exportsoforganicagriculturalproductsbasedontradi -

tional low-input and labour-intensive arming. Appropriate

inrastructure and institutions need to be put in place and

support assistance rom developed countries should be

sought.

Revenuegenerationfromtraditionalenvironmentalprod -

ucts and services such as handicra and eco-tourism.

However, this sector is dominated by small rms or house-

holds, which have difculties in reaching the international

market due to poor inrastructure, lack o capital and inac-

cessibility o export credits.

Overall, trade liberalisation can give access to clean tech-

nologies. But climate considerations need to be incorpo-

rated in trade liberalisation schemes that should not solely

be based on competition, but instead avour local value-

added. In EPAs climate change issues have been clearly mar-

ginalised.

As ar as EPAs are concerned, AIPAD is o the opinion

that Arican countries were pressed by the EU to conclude

interim-EPAs under the threat o raised taris on the EU

market. Reciprocal trade relations between EU and ACP

countries oer an opportunity to overcome the traditional

donor-beneciary relationship and create benets in the

orm o cheaper producer and consumer goods. However,

the AIPAD identies a number o problematic areas related

to the negotiations, including:

ebreakingupoftheexistingAfricanregionalgroupingsand the detrimental eects that will have on regional coop-

eration.

etendencyforEUtoopenupothermarketswhilepro -

tecting its own through subsidies.

everywidecoverageofnegotiationsandstringencyof

the conditions that go beyond WO requirements, includ-

ing new areas such as services, government procurement

and national treatment o companies.

edemandsbytheEUintermsofmarketopenings,such

as the stand-still clause that compels ACP countries to

reeze their current taris, the absence o a dynamic inant

industry saeguard, the ast pace o liberalisation, the re-

moval o export taxes, and the Most-Favoured Nation

(MFN) clause, which means that i ACP oers better market

access in any other trade negotiations, these conditions

must also apply to the EU.


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ethreattoclimateandfoodsecuritycausedbyincreased

movement o goods, avouring o commercial ood produc-

tion and enhanced control by EU companies on natural

resources and land. Biouel production has already led to

changes in land ownership as oreign companies race to buy

or lease large Arican land areas.

2.2 AsiaTis section is a summary o the ollowing documents pro-

duced by IBON: IBON (2008), Goodman and Wolendon

(2008) and Quintos (2008).

Asias greenhouse emissions have grown in step with

economic growth and increasing exports. China is now the

leading greenhouse gas emitter in the world. Tis is due to

a development path based on carbon-intensive energy and

inefcient technologies, deorestation, plantation agricul-ture, mining and dam projects. A non-negligible part o

these emissions are associated with outsourcing o low-cost

production by multinational corporations. rade in envi-

ronmental goods and services is still limited, even though

there are some Asian export products in the area such as

solar water heaters and certied t imber products.

IBON argues that WO rules constrain the possibilities

o countries to pursue policies related to climate change, as

i trade liberalisation is paramount to ghting a changing

climate. Tese rules include disciplines on border measures

related to the carbon content o imports, standards on pro-

duction methods, government procurement avouring low

greenhouse gas emitting goods, avouring o local produc-

ers, discrimination o oreign producers and intellectual

property rights. GA allows measures that protect hu-

mans or nature and promote development under certain

conditions, but in IBONs opinion it is difcult or develop-

ing countries to invoke these exceptions in practice because

o opposition rom developed countries.

WO and regional trade rules now need to be subordi-

nated to climate policies. According to IBON this wouldinvolve:

DiscardingtheWTOTRIPSagreement,especiallyinrela -

tion to renewable energy and climate-riendly technologies

and the developed countries must bear the cost o transer-

ring these technologies.

Endsubsidiesandotherformofsupporttogreenhousegas

intensive industries in the developed countries. Instead ap-

propriate adaptation unds or developing countries should

be collected.

Allowingdevelopingcountriestheoptionofusingsubsi-

dies, government procurement rules, regulations or oreign

investments, and other orms o state support or nurturing

domestic renewable energy development, sustainable or-

ganic arming, and climate riendly technologies.

Allowingdevelopingcountriestoretaintheexibilityto

use taris, quotas and other non-tari measures including

taxes to discourage or, i necessary, ban the importation o

GHG-intensive or pollutive goods such as ertilizers and

agro-chemicals. Te same exibility must be available to

developing countries who wish to discourage or limit their

exports o oil, gas, timber and other natural resources in

order to conserve them or to reserve their use or local pop-

ulations most dependent on such resources.

Allowingcountriestheexibilitytouselabelling,manda-

tory energy-related standards or technical regulations as

instruments or reducing greenhouse gas emissions.

Global Europe does not integrate climate concerns, and is

in IBONs opinion driven by prot-maximization on behal

o the EU. A particular problem is the desire by the EU or

unimpeded access to energy and raw material resources

rom the developing world. In the same vein, the demand

or stricter IPR enorcement is based on protecting the in-

terests o corporate Europe rather than enable transer ormore energy-efcient and climate-riendly technologies.


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In parallel the EU adopts market-based approaches to re-

duce their own greenhouse gas emissions; the EU emissions

rading Scheme (ES). However, the emission cap is set too

high to drastically reduce emissions and the scheme has

turned into a lucrative business opportunity, involving

among other things trade o carbon credits between Europe

and the developing world. o IBON the system amounts to

privatisation o the global atmosphere and uses markets to

realise social ly desired outcomes.

Overall, Global Europe aims to establish relations with

its target partners based on WO plus terms that are un-

equal and biased against developing countries. Particular

issues that IBON emphasises include:

Reductionoftarisandnon-taribarriersresultsinloss

o revenue and exposes local producers to unair competi-tion, in particular in agriculture because o EU subsidies.

In the same vein, restrictions on the use o export taris on

raw material deny the EUs partner countries the sovereign

right to apply policies they need to develop.

Liberalisationschedulesthatarefasterthanrequiredby

WO jeopardize the economies o developing countries

leaving them little space or meaningul economic develop-

ment.

IPRclausesandenvironmentalmeasuresinFTAswould

provide monopoly to EU in advanced technology, such as

environmentally and energy saving technologies.

Studies show that even i ASEAN countries may gain rom

a ree-trade agreement with the EU, most o these gains are

associated with liberalisation in services. On the goods side,

ASEAN countries would become more specialised in pri-

mary production, while industrial production would de-

cline. EU would reap 7% o the benets. ASEAN countries

could experience considerable economic losses o revenuebecause o al ling tari revenue and repatriation o prots.

2.3 Latin America

Tis section is a summary o texts produced by REDES.

REDES argues that ree trade agreements between Latin

America and Europe are not aimed at promoting coop-

eration to oster development in the South, but rather at

opening and securing markets or transnational corpo-

rations and oreign investments. Tis is clear rom EUs

Global Europe strategy that explicitly aims at urther

liberalization o international trade to open markets or

the European companies in order to stimulate growth

and employment in Europe.

In addition, agreements between unequal partners lead

to suppression rather than promotion o sustainable devel-

opment and the EU association agreements are examples o

this. Tey incorporate issues not negotiated in the WO and

demand extensive liberalization in areas such as goods,services and government procurement. Tey destabilize

regional integration in the developing regions, as exempli-

ed by the splitting o the Andean block. At the same time

global europe and sustainable development

Documents