Advancing development through trade

Trade can be an important lever for fostering development, but whereas EU trade policy seeks to integrate developing countries more closely into the international trade system, this strategy has not actually fostered development.

Despite the EU's declared aim of eradicating poverty, trade agreements with the EU have failed to help the least developed countries overcome their dependency on exports of unprocessed raw materials.

Their economies remain poorly diversified, regional integration is not visibly working and their domestic productive capacities and local markets are not fully functional.

The Greens believe that liberalising trade does not automatically lead to development. Many of the least developed countries have been more open to trade over the past 20 years than their most advanced counterparts, yet have remained poor.

Consequently, we advocate the imposition of strict rules on specific problems like land-grabbing, the abuse of tax havens, legally imbalanced trade agreements (as in investor-state dispute settlement clauses) and lack of respect for environmental regulations and human rights.

The implementation of binding rules on corporate social responsibility would be one way of addressing these problems.

The Greens succeeded in improving the final report in two main ways.

Firstly, we ensured that it contains very strong statements on investment policy (e.g. questioning the benefits of investor-to-state settlement mechanisms) and on trade liberalisation's failure to automatically trigger fair commerce and eradicate poverty.

Likewise, the EPP failed in its attempt to delete the paragraph calling for a ban on agricultural subsidies that harm development. Such a deletion would have effectively breached the EU's legal obligations under the WTO system. EU agricultural subsidies threaten food security in developing countries and violate the principle of policy coherence for development.

The Greens were unable to convince Parliament that countries depending heavily on exports of raw materials need export taxes to finance their budgets.

African, Caribbean and Pacific (ACP) countries had called for the possibility of imposing such taxes but the EU had already opposed such a demand.

Our amendment pointing out the damage caused, particularly to emerging industries in developing countries, by requiring reciprocity in public procurement was not supported either.

The explicit paragraph on legally binding rules governing corporate social responsibility was also rejected.