The EESC Section for External Relations
with internal trade and climate change and EU-ASEAN relations on its agenda
On 11 May the Section for External Relations (REX) of the European Economic and Social Committee (EESC) held a meeting in Brussels. The first part of the meeting was focused on international trade and climate change. The guest of the panel discussion were Mr. Jadot, Vice-President of the International Trade Committee of the European Parliament, Mr. Melendez Ortiz, Chief Executive of the International Centre for Trade and Sustainable Development (ICTSD), and Mr. Garcia Bercero, European Commission, DG Trade.
Member of the EESC Ms. Pischenot presented her opinion:
REX/267 International trade and climate change
As an integral part of the Europe 2020 Strategy, any new trade policy must respond to environmental concerns, while avoiding the temptation of reverting to protectionism. It must help develop a more innovative, environmentally friendly marketplace and promote the social welfare of its people. To embody this aim, the EU can lead by example, adopting a different path for its growth and steering it towards a low-carbon model; in this way, it will be able to retain its leading role in efforts to combat climate change. The impact of economic growth, transport and the spread of technologies means that international trade represents one aspect of the debates on climate change and the transition to a green economy which cannot be ignored.
The Committee strongly hopes that any overall conclusion of the Dohà round at the WTO will facilitate trade in environmental goods and services by a substantial reduction in tariff and non-tariff barriers. At the same time, the Committee also feels that the EU must lead by example by facilitating the transfer of "green" technologies in its bilateral and regional trade agreements.
With a view to any future trade strategy, the EESC recommends that more research be carried out into the social and trade impact on climate change, including the management of water issues. It calls on civil society in Europe and in non-member countries to take part in impact studies ahead of bilateral and regional trade negotiations, particularly in the area of sustainable development.
With regard to transport, the EESC supports the adoption of global UNFCCC objectives to cut air transport emissions by 10% and maritime emissions by 20%. The decision to share reduction efforts will also affect the transport sector, since air transport will be gradually included in the Emissions Trading System (ETS) from 2012. A European initiative to identify ambitious energy efficiency objectives in transport by sea would help in these efforts.
Given the uncertainty surrounding the climate change agreement and follow-up measures adopted in Copenhagen in December 2009, provision was made in the Climate and Energy Package that a report would be published in June 2010 using the co-decision procedure with the European Parliament and setting out "appropriate measures" for sectors at risk of carbon leakage as a result of exposure to international competition and/or the additional costs imposed by the EU's CO2 price. Although the problem is not yet in evidence, carbon leakage may well be an issue from 2013 on. This risk is likely to grow as the EU gradually increases the volume of auctioned quotas and as major non-EU emitting countries stall over the introduction of an emissions trading system or internal tax.
In the short-term, moves to curb the risk of carbon leakage must include, as a matter of priority, an increase in the number of emission quotas allocated free of charge, with actual figures contingent on the progress and outcome of the multilateral climate change negotiations. Free allocation – focusing on at-risk sectors and framed in line with best practice, taking due account both of the need for more open trade and of the additional cost of carbon – must be seen as a transitional solution, based on empirical reasoning and compliant with international trade rules and a low-carbon model.
It will not be possible to justify border adjustment at the WTO if the European Union continues to favour free allocation – the ETS may only be considered to be a tax (and therefore adjustable at borders) if all the quotas are auctioned. The best way forward would be to make use of adjustment mechanisms for a transitional period on a handful of tariff lines where there is a genuine risk of carbon leakage and where all recourse to free allocation has been exhausted. Any adjustments must be highly focused, duly warranted and designed solely to keep any temperature increase to less than 2 C° – which is after all the principal achievement of Copenhagen – if they are to hold water before the WTO's Dispute Settlement Body.
Considering the slow and uncertain progress of the plans to set up emissions trading schemes around the world, the EU Member States will, for a number of years to come, remain among the few countries to have set a price for CO2. Given the future risk of carbon leakage in a number of European sectors subject to the ETS, the European Economic and Social Committee also recommends a significant increase in long-term investment levels designed to foster the decarbonisation of the economy, and the establishment of a stable and predictable incentive-based framework for the promotion of innovation, research and development in the field of as-yet unmarketable clean technologies.
If it is to develop a green economy and maintain its leading role in this area, Europe should, in its own interest and in the interest of the climate, retain its very ambitious goal of gradually cutting its emissions by 80% by 2050 with, for example, an intermediary objective of 25 to 40% between 2020 and 2030. The Committee suggests carrying out impact assessments (environment, employment and development) to plan for the transitions between 2020 and 2050.
The fight against climate change requires strong collective public action at both national and European level. In addition to market pressure (ETS), governments must quickly put in place targeted financial and tax incentives and boost R&D investment in as-yet unmarketable technologies and services. Local and regional authorities can support the development of clean technologies through the public procurement process.
Consumers – along with producers who emit CO2 – are also urged to play a role in combating greenhouse gas emissions directly through trade. The Committee calls for harmonisation and greater stability in the methodology used to measure the carbon impact of products, covering all stages of the production process, from conception to distribution. Accordingly, the Committee recommends improving life cycle analyses by boosting methodological research on "carbon accounting." If the introduction of carbon content standards and labelling is to remain a matter for the private sector and decentralised across the EU, it will be essential to put in place a joint framework for measurement and assessment under the responsibility of the Commission or a dedicated agency.
In the second part of the meeting Mr. Cappellini has presented his opinion:
REX/276 relations EU-ASEAN
The EESC stresses the centrality and need for renewed and more incisive relations between EU institutions and ASEAN. To this end, this opinion follows up on earlier EESC opinions on the same issue which as long as ten years ago had already stressed how important it was for the EU to focus more on Southeast Asia. They also pointed out the fundamental contribution that the EU could have made to regional integration in Asia.
The EESC notes, however, that the hoped-for progress in EU-ASEAN dialogue has still not been achieved. Despite financial and other efforts to promote structured EU-ASEAN dialogue, bilateral negotiations in various areas (political, cooperation, trade, etc.), concrete results are poor and dialogue with and between civil society is still operating below its potential. The intervening decade seems to have been more of a missed opportunity than a time for developing a partnership with a region that is considered strategic to EU interests in the world. Trade negotiations are emblematic of the situation. While the EU and ASEAN agreed to suspend negotiations, ASEAN has concluded trade agreements with other key geo-economic entities (China, India, Australia, and negotiations are underway with the USA, South Korea and Japan).
Today, in a profoundly different international environment, where political and economic constraints are stronger than they were a decade ago but where new opportunities for integration and dialogue have emerged, this REX opinion seeks to put forward a number of practical proposals for relaunching EU-ASEAN relations.
The Committee reiterates the fact that guarantees for working conditions that respect human dignity and compliance with the eight ILO Conventions embodying core labour standards remain absolute prerequisites for moving forward in regional partnership. In the case of Burma, the issue of human rights protection is an additional obstacle to entering into negotiations with this country, as effectively underlined by the European Parliament in January 2008. The EESC nevertheless welcomes the fact that EU-ASEAN trade negotiations are setting more ambitious targets than other trade agreements concluded with ASEAN, especially for labour and environmental standards, and social dialogue. However, the Committee recommend that these ambitions should not preclude the conclusion of a regional EU-ASEAN agreement. Viewed from this angle, the bilateral approach should be seen as a first step towards regional or multilateral trade agreements, and not their abandonment.
Experience has shown the advantages to both sides of cooperation and dialogue with international partners in various parts of the world. They permit better mutual understanding and a more effective approach to the challenges and problems to be resolved. For this reason, the EESC stresses the need for greater social partner and civil society involvement (at EU level as well as in third countries) in socio-economic sustainability impact assessments on free trade agreements with ASEAN countries. Their involvement is also required in assessing the vulnerability of the social groups most exposed to competition and the need to build the capacity of civil society and foster sustainable development in the EU-ASEAN structured dialogue. It is worth stressing that relations with the EU have been more effective in those ASEAN countries (such as Indonesia, Thailand and the Philippines) where civil society organisations are more deeply rooted. The current challenge is to find effective ways of cooperating with the weaker civil society organisations in the other countries of the region.
The EESC hopes – and is ready – to work with other EU institutions in this area in order to foster and facilitate strengthened dialogue with civil society in ASEAN countries and contribute its expertise to that end, especially with regard to the most vulnerable groups. This could certainly be facilitated and bolstered if carried out in close cooperation and coordination with the new diplomatic service for EU external relations.
The Committee advocates the launch of an integrated and inclusive platform of EU-ASEAN social organisations to support key themes in the inter-regional integration process, as well as to support the capacity building of organisations that represent the needs of local civil society, especially in countries where such organisations are weakest. This new instrument for cooperation between EU-ASEAN civil society players would promote an integrated capacity building strategy through experience sharing on specific case studies and various aspects of the integration process, such as socio-cultural dialogue, cooperation in science and production, services of general interest and crisis management.
Vladimíra Drbalová
International Organisations and EU Affairs
