Coherence for Governance:
The European Parliament &
EU Trade and Investment Policy
Christopher A. Hartwell
President, CASE
September 23, 2014
Overview
• Policy Coherence in trade and investment policy
is a difficult goal for any government
• EU has been no exception, with unclear
objectives in external policies (especially in
regards to trade)
• This paper suggests a way to create policy
coherence around a specific theme: “coherence
for governance”
• European Parliament has a dedicated role to
play in ensuring coherence at the beginning and
end of the coherence process
Opportunities and Obstacles in
Policy Coherence
• Policy coherence is a difficult concept to measure
• Refers to both process (institutional coordination) and
outcomes (policies that result are harmonized)
• Coherence falls along several axes:
• Horizontal: coordination between target policy (say,
aid) and non-target policies
• Vertical: coordination across actors or groups (i.e. the
EU)
• Internal: consistency across modalities (grants, aid,
technical assistance)
• Multilateral: consistency across international financial
institutions
EU Experience with Policy
Coherence: PCD
• Policy coherence for development: a first attempt
to coordinate EU external policies
• Original conception was EU member states
coordinating national development policies with
each other (vertical coherence)
• With OECD prodding and UN guidance (MDGs),
shift towards horizontal coherence
• Inclusion in Lisbon Treaty
• With legal basis for PCD established, problem has
shifted to implementation/administration
• EU’s double role as implementer of its own
development policies and as the coordinator of
member states’ policies complicates implementation
Coherence in Trade and Investment
Policy: An Added Challenge
• Trade policy is always difficult for coherence, because
little sense of what it is for:
•
•
•
•
Liberalization in a pure sense?
Enabling market access for specific export sectors?
Protecting domestic industries?
Ease access to the single market for developing countries?
• Benefits of trade dispersed, costs concentrated
• Political lobbying rife in the trade arena
• Also several modalities for undertaking trade policy:
•
•
•
•
Multilateral
Regional
Bilateral
Unilateral
• Investment policy in EU less fragmented in concept
but more in practice
• Idea of shared competence
EU Trade/Investment Policy:
Intended Incoherence?
• From
liberalization
(1950s/60s)
to
protectionism (1970s/80s)
to staunch multilateralism
(1990s) to bilateral focus
(2000s)
• Common
Agricultural
Policy an example of the
difficulties in defining a
goal/coherence for trade
policy
• Acknowledged
that
removing CAP would
immensely
benefit
developing countries
• Is policy coherence with
CAP maintaining it rather
than working around it?
Introducing Governance:
A Nucleus for Coherence
• Overwhelming economic evidence of the
importance of governance – “institutions
matter”
• Consensus within the EU on the need for
governance improvements
• “Trade in itself is not sufficient to secure
development. Good governance and sound
domestic policies are needed to maximize the
benefits of trade-induced growth and make it work
for inclusive and sustainable growth” (EC 2013).
• Governance is not exclusively democracy
promotion
Benefits of CFG
• All member states behind at least the
concept already
• No one is arguing that poorer
governance/less investor protection
will lead to growth
• CFG will help maximize trade
liberalization gains in a shorter timeframe…
• …and ensure EU monies are spent in a
more cost-effective way
• Perhaps most importantly,
governance conditionality already
tried out with the EU
• Economic Partnership Agreements
(EPAs)
• CEE accession to the EU
Difficulties with CFG
• EU’s own complicated institutional framework
• “Do as I say, not as I do.”
Difficulties with CFG (II)
• Even with EU policy coherence, there might not be
the results needed
• Many variables take over after coherence is even achieved
• Coherence in the EU doesn’t mean coherence in the
partner country
• How can one realistically sanction or encourage when
things go off track?
• However, empirical evidence that results are better with
coherence than without it
• Partner countries may not accept conditionality
• Singapore issues and EPAs were already a target for antiglobalization activists
• Self-selection of countries can alleviate this issue
somewhat
The Role of the European
Parliament in CFG
Elevation of EP in trade policy
in recent years means it can:
• Support
political
commitment and issuing
policy statements
• Ensure coherency in trade
and
investment
negotiations
• Oversee and monitor end
products for CFG
1. Political
commitment
and policy
statements
3. Systems for
monitoring,
analysis and
reporting
2. Policy
coordination
mechanisms
The Role of the European
Parliament in CFG (II)
• Already a shift in political commitment towards
governance and support of PCD
• Singapore issues and EPAs need more operational
guidance for coherency, which EP can provide
• EP can verify that governance is a part of any trade
negotiation or draft treaty
• While politics could manifest itself for MEPs on trade or
investment issues, governance should be relatively more
insulated
• Less of a sanctioning than a refusal
• Once CFG is adopted, EP can play a role in
monitoring governance changes from the partner
country side
Conclusions
• Coherence for Governance is a way to bring
policy coherence to EU trade and investment
policies…
• …and attempt to improve utilization of trade
and investment agreements in partner
countries.
• The European Parliament has a large role to
play as overseer and guarantor of this
consistency
• Implemented correctly, this form of coherence
can have great rewards for both the EU and
partner countries
Thank you for your attention!
Dziękuję!
Merci!