Joint NGO statement on Sustainability Impact Assessments of EU Trade Policy

Brussels, July 2002

Back in 1998, the European Commission announced its intention to carry out a Sustainability Impact Assessments (SIA) of the WTO negotiations. Many NGOs welcomed that commitment as a necessary first step to ensure that the EU’s negotiating position at the WTO and in bilateral trade agreements was conducive to sustainable development, while enhancing transparency and accountability in EU trade policy-making. At last year's European Council in Gothenburg, the EU commitment to SIA was strengthened further, as European leaders agreed that all major policy proposals in the EU would need to be subject to SIA before being adopted.

Since 1999, the Commission has embarked on an ambitious programme of SIA, spanning WTO negotiations and its major bilateral trade negotiations, which will be reviewed over the coming months and years. However, despite the resources being poured into the SIA programme by the Commission (currently amounting to 10% of DG Trade's total budget) and the reports released so far, there is little evidence that SIAs are influencing EU negotiating positions at the WTO or in bilateral agreements. There is no evidence either of SIA leading to the formulation of trade-related policies and measures that could help to mitigate the negative impacts of trade liberalisation, or to spread its positive effects more equitably and sustainably.

This lack of policy impact of SIA in influencing the formulation of trade policy positions – including their coverage, timing and sequencing – and related policy areas –development, environment, social, health, consumer protection, animal welfare, etc. – in the Commission and more widely in the EU undermines the very purpose of conducting SIAs (i.e. formulating more sustainable EU trade policy) and puts into question the Commission's true commitment to sustainable trade. Neither does the lacklustre performance on SIA so far inspire confidence that new items where impact assessments are needed (like GATS) will be assessed properly.

The undersigned NGOs believe that SIAs will only be successful in informing the formulation of more sustainable trade policies if high political will and buy-in exists from top EU decision-makers, both in Community institutions and in member states. Procedural changes are also needed to ensure that SIAs inform the decision-making process, including at Council level, and allow the full involvement of stake-holders throughout the negotiations. For SIAs to serve their purpose they must be at the heart of the policy-making process, otherwise they become little more than a bureaucratic exercise in greenwash.

With these preliminary comments in mind, the undersigned NGOs call on the Commission, the European Parliament, Council and Member States to take the following actions:

1) SIA should begin at an early stage in order to inform negotiating positions

It is critical that SIAs begin early, even before negotiating positions are formulated. Indeed they should inform these positions. So far, SIAs have only started after negotiations on bilateral agreements have commenced – and sometimes even after negotiations have concluded. This not only prevents them from influencing negotiating positions, but because SIAs are time consuming, many important decisions will have been taken before their output inform the negotiators involved. For example, the EU-Chile SIA was only launched in March 2002 just before the agreement was signed, and the political and co-operation chapters of the EU-Mercosur agreement were almost completed by the time the SIA commenced. Meanwhile, there has been no visible movement on the SIA of the Euro-Mediterranean Free Trade Zone agreement, despite numerous promises going back to 1999.

The EU has an opportunity to address this failing in the negotiations on Economic Partnership Agreements (EPAs) with ACP countries. It is essential that the second stage of negotiations – the substantive negotiations with specific sub-regions – do not commence until the first set of conclusions of the SIA are available. Once this stage of negotiations begins it will be more difficult to change the direction of the negotiations and the SIA will be limited to proposing measures to mitigate the impacts of the agreements.

2) SIA should be fully integrated into the policy-making process

SIAs are being conducted at arms length from policy-making,and policy makers are not sufficiently involved in the SIA process. There must be high-level commitment to, and involvement in, the SIA process. Unless Commissioners, senior officials in the Commission, Member State Ministers, and other senior personnel are committed to and involved in the process, SIA will remain at the periphery of policy-making and rarely go beyond the officials managing the consultants who conduct the research.

At the moment, policy-makers and legislators have a very limited exposure to, and input into, the SIA process. This is especially the case when it comes to informing Council decisions, including those at Ministerial level. The Commission should also be more involved in the day-to-day management of the SIAs and negotiators should be kept close to the procedures.

This problem is exacerbated by the rigid and unresponsive structure of SIAs – they need to be flexible and dynamic to be able to cope with the demands of trade negotiators. The current approach where the contractors report back on pre-ordained timescales is not flexible and contrasts with the rapid and continuous process of liberalisation with new issues continuously being introduced into negotiating agendas.

3) Enhance policy coherence and inter-service co-ordination

SIA should promote the overall coherence of the EU’s external objectives in the fields of trade, poverty alleviation, human rights and environmental protection. SIA is across-cutting tool which has implications for all areas of EU policy. In this context, the results of these assessments should be taken into account in the formulation of the EU negotiating position at international and inter-regional fora, and should highlight the interests of developing countries in the sectors which are important for their national development process and for the self-sufficiency of their population, as well the economic and social rights of women in developing countries and in Europe.

The effective delivery of mitigation and enhancement measures will require a close degree of co-operation between DG Trade and other DGs (such as DG Development, DG Environment, DG Relex, DG Agriculture, etc.) Those involved in the on-the-ground delivery of EU policies should be closely involved in the SIA process from setting the terms of reference through to the formulation of mitigation and enhancement measures.

SIAs should be able to bring to the fore cross cutting issues including the distributional impacts of trade not illuminated by conventional policy analysis. However, a major failing of the studies so far is their neglect of gender issues. An analysis of the trade negotiation from a gender perspective would permit the anticipation of the differentiated effect and impacts of trade liberalisation by gender and the identification of sectors that represent opportunities for women.

4) Increase stakeholder involvement in the process

Opportunities for stakeholder involvement are limited and despite the Commission’s efforts at consultation, stakeholders have only had a limited input into the studies so far. The current reporting structure gives civil society little opportunity to influence the direction of the studies and most key decisions are made before the studies are presented.

In particular, the involvement of the EU's trading partners in the exercise has been virtually non-existent, despite the fact that one of the studies specifically focussed on the agricultural sectors of eight non-EU states. SIA should not only inform EU negotiating positions, but also inform the negotiations with third countries and regions. It therefore becomes essential that the Commission involves its trading partners on the SIA process at an early stage, and encourages and supports them to carry out national SIA of the agreements under negotiation. Consideration should be given to conducting SIAs in partnership with trading partners so that they can help inform policy development by these countries. In any event, it is essential that the results of SIAs be available to all parties including non-EU negotiators.

The exclusion of civil society and governments from non-EU countries makes it particularly difficult to assess the impacts of trade policies at a local level. SIAs are a starting point for an on-going process of consultation to allow informed responses from national and regional stakeholders. Only through an open and well structured consultation process can SIAs hope to bridge the gap between macro policy formulation and micro-level impacts. Greater involvement of women’s organisations, for example, would be an important stepping stone to greater gender integration.

5) Expand the roles of other EU institutions

As things stand, SIA is a Commission-led and Commission-focused exercise. While the Commission plays a key role in the formulation of EU trade policy, SIA should also inform other EU institutions and Member States. Therefore, a focus in the Commission only can be considered as a weakness. It reduces the opportunity for co-ordinating EU policies more widely to deliver more sustainable outcomes; hinders the integration of SIA into policy-making; makes it more difficult to deliver SIA recommendations; and reduces transparency. SIA should inform all EU institutions, and Member States should be intimately involved in the exercise.

  • European Parliament: There is a great deal of scope for an expanded role for the European Parliament – particularly in providing oversight of SIAs and increasing transparency. The Commission should report regularly to Parliament and whenever there is a discussion with Parliament on Bilateral trade agreements or WTO negotiations – both in Committee and Plenary – the results of the relevant SIA should be presented along with an explanation how these have informed negotiations. The Parliament Secretariat should be charged with monitoring the progress of SIAs and should have the resources to do so. The Parliament should take on the role of overseeing the conduct, quality and implementation of SIAs.
  • Council: The General Affairs Council, being responsible for the co-ordination of EU policies, should be intimately involved in the SIA process. There should be a formal organising structure in the GAC and high-level commitment to the process. SIAs should be mainstreamed into the discussions of the 133 Committee, not just tagged on to the end of the agenda, and Trade Ministers in the Council should be regularly briefed by SIA on trade policy issues addressed in their meetings. When a trade issue is being discussed, Ministers and officials should be provided with the relevant SIA findings to aid their deliberations.
  • Member States: Member States should play a greater role in the elaboration of SIA. Key decisions on trade policy are made in Capitals before they even reach the 133 Committee in the Council. More effort should be made to inform Member States of SIA findings, and they should give SIA higher political priority and become more involved in the review process. There should be designated contact points within different Ministries in Member States responsible for SIAs, and for informing civil society at the national level.
  • Transparency: Trade policy making is opaque – the agendas and minutes of the meetings of the 133 Committee are not published and as long as these meetings are closed the way that SIAs inform trade policy will remain hidden. It is unclear how SIAs are influencing trade policy. Whenever the Commission reports on SIAs to stakeholders and the Parliament, it should outline how the findings of SIAs are influencing policy formulation and negotiations.

The undersigned NGOs

Signatories:

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Aprodev

Begegnungszentrum fuer Aktive Gewaltlosigkeit

Berne Declaration

Campagna per la Riforma della Banca Mondiale Center for International Environmental Law

Center for Environmental Public Advocacy

Eurostep

Fern

Friends of the Earth Europe

Green Alternative

ICDA

International Confederation of Free Trade Unions (ICFTU)

K.U.L.U.-Women and Development

Solidar

Solidaridad Internacional

Weltladen-Dachverband e.V.

Network Women in Development Europe (WIDE)

Weltladen-Dachverband e.V.

Werkgroep Globalisering DD

World Development Movement

WWF European Policy Office

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