External Trade
Trade and Environment
The EU approach
Paolo Caridi
First Secretary, Delegation of the European Commission to Japan
1. The EU approach to Climate Change
External Trade
2. The EU in World trade
3. The contribution of the EU trade policy
to environment
•
WTO
•
Bilateral relations
4. An example : biofuels
The EU approach to climate change
• A sense of urgency
External Trade
• Ambitious objectives: Council
Conclusions of May 2007
- Foster renewable energy -> 20% by 2020
- Foster energy efficiency -> reduce CO² by
20% by 2020
- Globalize carbon trade
• Need international cooperation to
limit global warming to 2°C
- Action in the EU not enough
• Trade can be part of the solution
- Factor in environment in our trade negotiations
- Address the competitiveness impact
The EU in world trade
External Trade
19% of world trade, 17.1%
world trade in goods (2006),
26% world trade in services
First exporter
A MAJOR
Second largest
importer
TRADING POWER
Foreign direct investment: EU-25
a major source of the world’s FDI
(€171.8 billion) and host of the
world’s FDI (€ 94.1 billion) in 2005
The EU in world trade
SHARE IN WORLD TRADE IN GOODS (2006)
EU25
17,1%
United States
16,0%
External Trade
Others
50,6%
A
MAJOR
TRADING
POWER
China
9,6%
Source: Eurostat
Japan
6,6%
SHARE IN WORLD TRADE IN SERVICES (2005)
EU25
26,0%
Others
44,9%
Source: Eurostat
China
3,8%
Japan
6,9%
United States
18,4%
The EU Trade policy - basic features
External Trade
Policy concept
A competitive European economy in an open world
trade system organised by multilateral rules
Ensure that the European
economy is open to the
world and competitive in
foreign markets
Secure real market access in
foreign countries
Support a strong multilateral
trading system
Most effective means of
managing trade and enforcing
rules
Promote European values
on democracy, rule of law,
environment, social
rights... enforce sustainable
development
The contribution of the EU trade policy
to environment
External Trade
Policy objectives
1.
Liberalize environmental goods - services
2.
Seek global market for CO² emission trading
3.
Develop renewable energy (increase sustainable trade
in biofuels)
4.
Foster trade cooperation to improve energy efficiency
5.
Help
reversing
deforestation
(FLEGT
Voluntary
Partnership
Agreement
negotiations
:
seeking
commitments on illegal logging and incentive policy)
Measures must remain WTO compatible.
The contribution of the EU trade policy
to environment
External Trade
Existing EU trade instruments in support of
environment
• The GSP : additional trade preferences to countries
committed to implementing environmental and
labour standards.
• The Sustainability Impact Assessments (SIAs) look
at the impact of each trade negotiation in the
economic, social and environmental field…
• …so as to link with specific funding and assistance.
The EU multilateral environment
agenda / WTO Doha Round
External Trade
Implementing the Doha Declaration on trade and
environment (paragraph 31) :
 open trade for environmental goods and
services: no quota/no tariff trade for goods and
services that contribute to combating climate
change
 equal relationship between WTO rules and
Multilateral Environment Agreements (MEAs)
need legal certainty that trade multilateral rules
acknowledge environmental commitments
 observership status for MEAs in the WTO
The EU bilateral environment agenda
External Trade
• "Global Europe" communication of November
2006 : a set of new FTA negotiations
• Environment will be part of the negotiations,
with
a
view
to
ensuring
substantial
commitments – from both sides
• Possible
market
assistance incentives
access/development
An example : renewable
energies/biofuels
External Trade
• Objective : 10% of biofuels in road transport by
2020
• Room for increased market access in EU
• Foster imports through ethanol tariff reduction
and tariff free quotas in FTAs
• Biofuels should be produced in a sustainable
way to bring real benefits
The EU focus on sustainably
produced biofuels
External Trade
• Commission working on an incentive based
scheme
− to be applied without discrimination to
domestic production and imports
− potentially
taking
into
account
:
greenhouse gas emissions and biodiversity
• FTA negotiations to encourage sustainable
production and import