Globalisation and the Importance of Trade Trade and the Johannesburg Summit on Sustainable Development The Johannesburg Summit

on Sustainable Development (WSSD) taking place within the framework of the United Nations between 26 Aug and 4 Sept 2002 is the largest such gathering ever held. The issues of globalisation and trade and how they are bound up with sustainable development will be high on the agenda at the Summit. The phenomena of globalisation - national and regional world economies integrating into a global economy at an extraordinary pace - is extending and has a great impact on the economic environment. Governments around the world have liberalised trade and financial markets leading to intensified international flows of goods, capital and services. A world-wide trend towards privatisation and deregulation of economic activities has opened up a wider arena for investment. Meanwhile, the rapid development of information and communication technologies has put the world of finance, trade and services into the fast pace of real time across the time zones of the world. Due to these unprecedented developments the 1990s saw increasing prosperity for countries and enterprises able to take advantage of globalisation and new information and communications technologies. International trade has flourished and the European Union, alongside the USA and other dynamic regions, has enjoyed a record period of economic expansion. Crucially, this growth was not confined to the richer nations. Developing countries as a block experienced healthy growth in the 1990s with GDP increasing from 2.7% in the 1980s to 4.3% in the 1990s. Globalisation of trade offers immediate benefits: faster growth, higher living standards and new economic opportunities. On the downside, not all countries have benefited equally from the globalisation phenomena. Those that do not have the technical capabilities, infrastructure and institutional capacity found themselves falling behind even further. Africa for instance has only experienced marginal growth over recent years and its share in world trade dropped from 2.7% in 1990 to 2.1% in 2000. And yet equitable spread of the benefits of globalisation is vitally important for the health of the whole system. Witness for instance the regionalised financial crises over recent years in South America and the Far East that can have significant destabilising effects globally. Further concerns regarding the globalisation of trade include negative environmental and social implications and loss of cultural diversity. It is the responsibility of world governments, particularly in the developed world, to ensure that systems are in place that do not marginalise already fragile or vulnerable economies. The Johannesburg Agenda The world community, particularly in the developing world, has become all too aware of the impact of globalisation and trade on their economic futures. And yet the regulatory frameworks that govern trade do not at present offer the same advantages to all. Johannesburg will seek to address these issues and the UN Secretary General has outlined the areas through which the benefits of globalisation in trade can be spread more equitably, notably in:

Improving market access of products and services of developing countries to developed countries - particularly for products in which developing countries have a competitive advantage such as agricultural and textile goods. Eliminating all exceptions to duty-free and quota-free treatment for exports from the least developed countries (LDC). Assisting developing countries (particularly LDCs) to integrate into the world trade system and participate effectively in multi-lateral trade negotiations. Strengthening the World Trade Organisation (WTO) to provide a framework for an unbiased, rule based and non-discriminatory international trading system. Assisting developing countries in narrowing the digital divide.

The European Union is fully behind the Secretary Generals proposals and has itself produced a detailed outline of how these objectives can be realised (see below). The EU, Trade and Sustainable Development The EU is convinced that trade and finance issues will form a large part of the solution for the successful outcome of the WSSD and is resolved to respond to the concerns of developing countries in these areas. A successful outcome depends on finding ways of bridging the gap between the developed and developing countries over trade and finance issues and the EU is set to play a constructive role in bringing the parties together. Although this is not going to be simple, the pre-Johannesburg discussions have shown that an EU alliance with the developing nations is possible. The EU believes that a positive trade agenda will lead to a beneficial agreement. As regards the regulatory framework for trade, the EU argues that a balanced outcome at Johannesburg will be based on substantially greater market access opportunities, especially for developing countries as provided for under the World Trade Organisation Doha Development Agenda. This may also include reviewing all WTO special and differential treatment provisions with a view to strengthening them and making them more precise, effective and operational. In the same way it is vital to reduce or eliminate tariffs on non-agricultural products, including the reduction or elimination of tariff peaks, high tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries. By extension the EU is seeking to current WTO members members to push for the accession of developing countries, particularly the least developed and countries with economies in transition. An important initiative in this respect will be to provide commodity-dependent countries with the capacity to diversify their export activity. International financial and technical assistance for economic diversification and sustainable resource management are important elements of this respect programme. The EUs own initiatives Beyond the framework of the overall trade system the EU will be promoting some of its own initiatives at Johannesburg, namely to:

Develop targeted, sustainably-financed technical assistance and capacity building programmes that ensure that trade and environmental issues are more effectively mutually supportive. Encourage all developed countries to emulate the EUs Everything But Arms (EBA) initiative by providing duty and quota free access to all exports except arms that originate in the least developed countries. Promote new methods to encourage trade in environmentally friendly products, such as organic produce, animal-friendly and eco-labeled production and encourage fair trade initiatives that maximise environmental and social benefits for producers in developing countries. Encourage more countries to adopt the single international instrument designed to integrate environmental considerations into Export Credit Agencies activities (which support almost 10% of world trade) and which would constitute the first step in the process of greening export credits. Strengthen the sustainability dimension of bilateral and regional trade agreements by developing commitments to sustainable development within these agreements as well as by encouraging the use of Sustainability Impact Assessments. Develop the Trade Related Technical Assistance programme in which training and capacity building is offered to boost trading capacity. The EU has already committed substantially to the WTO Trust Fund and spends much more at Community and at Member State levels in this respect. Support the establishment of Sustainable Trade and Innovation Centres which aim to be centres of excellence around the world that will help developing country producers and traders to take advantage of increasing consumer demand for sustainable products. The aim of the centres is to help producers gain easier access to these niche markets by navigating the environmental, health or other legislative (or market) requirements in target markets which currently make such trade difficult.