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Sustainable development or fish eat fish world? 'EU external trade policy'.

Extracts from this document...

Introduction

Sustainable development or fish eat fish world? 'EU external trade policy' University of Portsmouth M.A. European Law and Policy Emilija Jurakic Contents 1. Introduction....................................................................................3 2. EU External Relations - overview..........................................................4 3. WTO..............................................................................................5 4. GATT, GATTS, TRIPS, TRIMS.............................................................6 5. Decision making process......................................................................9 6. Conclusions.....................................................................................10 7. Bibliography...................................................................................11 Introduction External trade policies of the European Union have a direct impact on the economic livelihoods of people living in poverty. The policies of the European Union matter for developing countries. They matter a great deal. With 36% of world GNP, 38% exports of the world market, 23% of the votes in the World Bank, 29% of the votes in the International Monetary Fund and largest collective number of votes as a regional grouping in the World Trade Organizations the EU emerging as a very important actor in the trade (and other) policy arias1. The EU has agreements with more than 120 countries, and many multilateral agreements. Around 130 countries have diplomatic relations with EU itself, as distinct from the Member States. Because the EU is such a large trading bloc, trade agreements and foreign policy goes hand in hand2. In September this year, the 5th Ministerial meeting of the World Trade Organization (WTO) will take place in Cancun, Mexico. There, the 146 member countries of the WTO will intensify negotiate to complete the Doha Development Agenda, which was launched at the 4th Ministerial meeting of the WTO in Doha, Qatar, in November 2001. WTO leaders - the European Union (EU) and the United States - have set the end of 2004 as the final deadline to conclude this 'round' of negotiations. The Maastricht Treaty (now Article 177) stipulated that all EU policies affecting developing countries must take development objectives into account. This is called 'coherence'. It means that all EU policies must consider the following objectives in relation to the developing countries: * promoting social and sustainable development of the developing countries (especially most disadvantaged among them) ...read more.

Middle

In the late 19th century, the USA even banned the employment of foreign workers thus forcing foreign firms to train local workers. The exact strategies that were used to regulate foreign investment varied from country to country however, one common factor is that they all took a strategic approach to foreign investment. As a result, countries generally moved towards a greater degree of liberalization as they developed. In that sense, liberalization of foreign investments is better seen as an outcome of development (and not as a tool to develop). This is totally in contradiction with the common investment politics of the EU. Like said before the MAI (Multilateral Agreement on Investment) failed, which was abandoned in the face of massive civil society resistance (in both developing countries as in the EU Member States). But even in the absence of an MAI, many of the policy measures on foreign investment adopted in the past by today's developed countries are already constrained by WTO agreements such as the TRIMS agreement on which EC is now concentrating. The powerful corporations and investors are seeking binding protection for foreign direct investment around the world, and want WTO rules that would drastically limit the right of national governments to set any conditions whatsoever on this money. There preference definitely goes in the direction of the MAI agreements, but these agreements were to 'ambitions', so another approach is necessary. On the other hand many developing countries have turned proposals on investment rights away before, calling them a form of 'neo-colonialism'20. These two totally different worlds are very difficult to combine, but EC suggests having solution for this problem. In its discussion paper on trade and investment21 the Commission says that the elements of an ideal result that at the same time opens markets to new investments and then protects those that are made would include: - A broad definition of investment; - National Treatment/MFN; - Investment protection (expropriation, compensation); - Free transfer rights; - Disciplines of performance requirements; - Free ...read more.

Conclusion

Despite much liberalization, the EU continues to maintain strong defenses against 'sensitive' imports. Balancing the conflicting interests of domestic lobbies, not least agriculture, as well as of the developing countries seems to be very difficult for the EU. The European Union is demanding that many countries offer up water, energy, transport, agriculture, intellectual property, competition policy, etc. to the discipline of the WTO. Since its creation in 1995, the WTO has become a major influence in the lives of the world's citizens. Using both the fundamental rules of most WTO-enforced agreements combined with WTO enforcement mechanisms, the major power blocks and their big business sectors are forcing many countries to weaken their regulatory frameworks in several important areas. Regarding GATS, it's obvious what the dangers of further liberalization of foreign investments are. Like formulated above, liberalization of foreign investments is better seen as an outcome of development and can never be seen as a tool to achieve development. Finally, is the EU commitment to sustainable development likely to be compromised by the EU commitments to free trade? Throughout the day, there has always been a split Commission: we see parts of the European Commission fighting very strongly for sustainable development, and having very good intentions with the Doha Development Agenda. At the same time, we have other parts of the European Commission very aggressively promoting a free trade agenda with very different interests, even though they sometimes use exactly the same arguments. It's very difficult to resolve the imbalance between sustainable development agreements on one side and the strong and strict enforcement rules of the WTO on the other. The only conclusion which can be drawn is that EC external trade policy is not consistent with the objectives of EU development policies and that the EU is not put forward any practical proposals. As long as the Comission is not having 'fast-track' powers over external trade policies, bypassing the current system of ratification we will still as a community have powers to influence EC external trade agreements and new polices. 7. ...read more.

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