Brussels,4 February2012/ EUTheEuropean Commission has recently adopted a Communication that outlines how the EU's trade, investment and development policies can work hand-in-hand to support poverty reduction as well as inclusive and sustainable growth in developing countries for the next decade.

The Communication aims to reflect changes in the relative trade power of developing countries, notably with respect to the growing weight of emerging economies and the struggle that Least Developed Countries (LDCs) have in reaping the benefits of world markets. The Communication also takes stock of how the EU has delivered on its commitments and outlines the EU's trade and investment policies for development for the next decade.

The Communication is accompanied by a staff working paper which presents supplementary information and analysis on progress made since 2002, and provides detailed background on the EU's instruments and initiatives to support developing countries.

Trade, growth and development

In setting out the EU's trade and development priorities for the next decade, the Communication calls:

for more differentiation among developing countries to focus on the poorest;

to intensify efforts to look beyond tariffs and reduce the remaining barriers to trade;

to improve the way our trade and development instruments deliver and to enhance their complementarity;

for our partners to undertake domestic reforms necessary to a sustained tradeand investment-led growth;

for other developed and emerging economies to match our initiatives to open markets to countries most in need; and

for emerging economies to take up more global responsibilities for opening their markets to least developed countries.

What does the Communication recommend?

In support of its overarching aims, the Communication calls for:

going beyond unilateral trade preferences for goods by addressing issues through bilateral and regional trade negotiations with developing countries, to include such issues as: trade facilitation, social and environmental regulations, foreign direct investment, intellectual property rights, services, competition policy and public procurement;

the fast adoption by the EU of a revamped Generalised System of Preferences (GSP) scheme to ensure that only LDCs, low-and lower-middle income countries benefit from the system in sectors where they need help, while offering different forms of trade and investment partnerships to countries who have outgrown the scheme;

the rapid conclusion of Economic Partnership Agreements with African countries based on a shared commitment to a trade and development partnership as well as a pragmatic approach to remove remaining obstacles to negotiating and implementing these agreements;

pursuit of a partnership for democracy and shared prosperity with the Southern Mediterranean;

continuation of the EU's ambitious negotiation agenda with several countries in the Eastern Neighbourhood, Asia and Latin America for deep and comprehensive Free Trade Agreements;

using EU instruments to promote foreign direct investment, including relevant provisions in EU Free Trade Agreements to enhance legal certainty and combining EU grants with loans or risk capital to support the viability of strategic investments; and emerging economies to assume more responsibility for opening their markets to LDCs through preferential schemes but also on a non-discriminatory basis towards the rest of the WTO membership, of which four-fifths are developing countries. At the same time, the EU offers emerging economies a more mature partnership that includes regulatory cooperation and engagement on global issues which are essential for development such as food security, sustainable use of natural resources, green growth and climate change.

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rade, growth and development: Tailoring trade and investment policy for those countries most in need