Following the ‘Europe 2020’ paper adopted by the European Commission on 3 March 2010, the European Commission DG TRADE launched a broad public consultation on the future direction of EU trade policy. The Commission’s intention is to set out its policy during autumn 2010, explaining how trade policy can help achieve the objectives of the ‘Europe 2020’ Strategy. The purpose of this consultation was to gather views from relevant stakeholders regarding the rationale, scope and strategic objectives for a future EU trade policy. The consultation was open to all stakeholders within the EU and in third countries. Below you will find a copy of the consultation questionnaire with Global Health Europe’s responses. While the consultation is now closes, we invite you to continue the debate here through your comment on the GHE contribution.
Public Consultation on a future trade policy
The Lisbon Treaty clearly considers EU trade policy as an integral part of the Union’s overall external action – and therefore it must address development, environmental and social objectives as well as contributing to the other objectives set out in the Treaty on the European Union
Question 1: Now that the new Lisbon Treaty has entered into force, how can we best ensure that our future trade policy is coherent with the EU’s external action as a whole and notably in relation to the EU’s neighbouring countries?
Global Health Europe’s response reflects our central concern with aspects of health and its governance in the interests of the people of the European Union, our neighbours and global citizens. The recent DG SANCO, DG DEV and DG RTD joint communication on the EU Role in Global Health (COM(2010)128) underlines the need for coherence between trade, development, foreign affairs and health policy.
Trade has a direct implications for the health of consumers and is intimately connected to the priorities of access to essential medicines, the migration and retention of health professionals, detection and response to health threats, food security, nutrition and climate change, which are underscored in this new policy framework. All of these issues have both a global relevance and a specific impact upon EU’s neighbouring countries.
As noted in our response to the “EU 2020” consultation we also see health as a major determinant of economic performance and a rapidly expanding global market opportunity for the EU’s knowledge based industries. This is a social market requiring an understanding of local health needs and systems and co-working between academic, business and civil society partners at international level, the EU’s External Action Service can also provide vital coordination and support to this market development.
Inter-service discussions between DG Trade and DG SANCO, DG DEV and DG RTD and consideration of the role and capabilities of the EEAS could usefully start by considering new Free Trade Agreements with neighbouring countries to improved policy coherence.
The principal focus is stimulating growth, creating jobs and increasing prosperity for EU citizens. On 3 March 2010, the European Commission launched the Europe 2020 strategy which sets out a blueprint for achieving and securing smart, sustainable and inclusive growth. The Europe 2020 strategy acknowledges the important role that trade has to play in ensuring these ambitious objectives.
Over recent decades, the EU’s prosperity has to a large extent been built on the internal market, economic integration between the Member States and open markets at home and abroad for trade and investment. Between 1992 and 2006, the single market added 2.15 % to the EU’s GDP and accounted for 2.75 million extra jobs. The 2008 Competitiveness Report found that if internal trade within EU were to cease, average productivity would be down by 13 %.
When the economic crisis erupted in 2008, growth, employment and trade all suffered. Now, the need to contain government deficits may slow down growth and job creation over the coming years. A main Europe 2020 policy objective is to use structural reform policies to restart growth and job creation in the EU, in parallel with budgetary austerity.
However, Europe’s prosperity is not only linked to its (open) internal market but also to the markets of other countries and regions, many of which enjoy much faster economic growth. Current forecasts suggest that by 2025, the volume of trade could double compared with 2005, with a bigger share of exports coming from emerging market economies (more than 30 % as against 20 % in 2005). The EU may no longer be the world’s largest exporter.
In today’s global economy, production will increasingly be organised along global supply chains. They have become an important factor in ensuring competitiveness on domestic as well as global markets. Around two thirds of the EU’s imports are inputs to other products. As a result, open trade helps embed local companies in global production chains, makes them more competitive and creates more jobs. Trade and investment flows are complementary, create jobs and promote transfer of technology. While people may be wary about the impact of all this on their job security and income, the crisis has clearly shown that protectionism is not an option. People are equally wary about the environmental impacts of the way we do business, for instance in terms of resource use and climate change. All major economies are today in the same boat; if one of them closes its markets or pursues unsustainable policies, all will suffer.
The global financial crisis and its effects on the real economy have underscored the importance of sound regulation and the need to avoid major global imbalances. Trade flows were dramatically affected, although protectionism did not spread as widely as feared thanks to coordinated international efforts in G20 and WTO. The current initiatives (both at EU level and as part of the G20 mechanism) envisage a number of solutions to prevent similar crises from happening in the future. They should be part of an integrated coordinated approach:
Question 2: Given the importance of boosting growth, creating more jobs and ensuring a more resource efficient and greener economy, how can EU trade policy help? What should the new trade priorities be in the light of the Europe 2020 Strategy?
Trade which prioritizes the promotion of human and animal health and health system strengthening can boost growth, create jobs and promote a resource efficient and greener economy that also fulfils European health values of solidarity, universality, equity and quality care. Healthcare already accounts for 8.5 % of EU GDP and about 10% of employment, however, when other aspects of social care, and the “second market” for healthcare related products and services are considered the total impact on our economy may be twice this level . Health policies of previous decades were centrally concerned with the need to contain rising costs, viewing the health sector as a drain on public resources. But by 2020 innovation in healthcare markets could be a driving economic force. Improved prevention of chronic diseases will be vital to extend the labour force potential beyond the conventional age limit of 65 years. Furthermore a “second market” for healthcare related and healthy lifestyle goods and services has developed and is projected to provide an area for further growth. This second market includes goods and services not necessarily covered by private or national health services such as fitness, wellness, organic foodstuffs, alternative medicine and healing treatments, and health tourism as well as home and palliative care and rehabilitation services that are shifting to the private sector.
The growth potential of the health sector extends beyond the internal market. The health economies of countries such as Brazil, Russia, India and China will accelerate their demand for health solutions over the next ten years as their citizenry transition from low to middle and higher incomes. Populations at least the size of the current EU are emerging within such countries with similar demands for healthcare and rapidly increasing ability to afford solutions offered by EU healthcare based industries. Opportunities are emerging for new pharmaceutical products, medical devices and living aids, specifically to meet the needs of such markets. Information and communications technology for health is a fast developing market in these economies. Developments in microbiocides, genetics, stem cell research and nanotechnology as well as the “second market” offer global market opportunities for EU based companies. It is also true that health and care in the EU will offer opportunities for producers in BRIC countries.
In today’s multipolar world countries can no longer be categorised as “developed” or “developing”, both BRIC countries and the EU include poor, middle income and rich people. The challenge this poses is to realise the potential of these markets while protecting the basic health rights of all. This will require innovations in the way health research and development is funded, and products are priced for market segments: tiered pricing will be difficult and raise complex issues. This will only be possible with clear and coherent trade and global health policies and capabilities in global health diplomacy.
- World Health Organisation Regional Office for Europe WHO European Health For All Database Update August 2009 accessed on 08 January 2010 at http://www.euro.who.int/HFADB
- Graham Lister and Ray Robinson “What will health cost” Chapter 8 of “Policy Futures for UK Health” edited by Zoë Slote Morris, Linda Rosenstrøm Chang, Sandra Dawson and Pam Garside, The Nuffield Trust, Radcliffe Publishing Oxford 2006
- Klaus-Dirk Henke and Karl Martin “Health as a Driving Economic Force” chapter in “Policy Innovation for Health” edited by Ilona Kickbusch, published by Springer, 2009
2. Multilateral trade negotiations
Multilateral trade liberalisation remains our priority in the years to come because it avoids the costs of trade diversion and minimises transaction costs for a global round of liberalisation. The EU wants to see the Doha Round completed as soon as possible because the potential economic benefits are substantial for both developed and developing countries. However, the value of the WTO to the global trading system goes much beyond the Doha Round: Multilateral rules and trade liberalisation, complemented by a strong dispute settlement system, offer significant long-term gains and are of systemic interest to the EU as a leading trader:
Question 3: In addition to continuing to push for a successful conclusion to the Doha Round, how can the EU best pursue overall EU trade policy objectives in the WTO?
Since the Doha trade round began in 2001 international politics has evolved, the world today is both more integrated and more fragmented. Multilateralism has taken on a new meaning in this environment. UN organisations and Nation States are no longer the only players; there is a multiplicity of actors and theatres for international negotiations that are forming into a complex network. Trade issues are being negotiated at the World Health Organization, while health issues are being negotiated at the WTO. Academic business and civil society voices all seek to be heard in these and many other arena.
The EU can best pursue its trade objectives by actively participating as one of the architects and enablers of this open market place. Today coherence means that while the EU pursues its trade interests at the WTO, the same policies should foster the legitimacy and capacity of the EU as a global health actor and vice versa. In both the WTO and the WHO the issue of access to medicines “consistently sparks heated, sometimes divisive and potentially explosive debates.” This issue is exemplary of the plurality of policy solutions which are needed to address a single issue, which involves legitimate concerns over intellectual property and the human right to health. There is a need in this case to reconcile trade opportunities with civil society interests as both consumers and advocates for human rights.
- Speech from WHO Director General Margaret Chan at the WTO-WHO-WIPO joint symposium on Access to medicines. World Trade Organization, Geneva, 16 July 2010
3. Bilateral trade negotiations
After the adoption of the Global Europe communication in 2006, the EU launched a new series of negotiations leading to free trade agreements (FTAs) with fast-growing economies, including for example Korea, India, Singapore and Vietnam. Negotiations with Mercosur were recently re-started. The negotiations between the EU and Korea have now been concluded while others are still ongoing, offering the prospect of important economic gains for the EU.
FTA negotiations have also been launched with Canada. Although Canada was not mentioned explicitly in the Global Europe communication, an FTA would clearly accord with the objectives for FTA negotiations which were set out in Global Europe. Furthermore, trade negotiations have been completed with Central American and Columbia and Peru:
Question 4: Do our current FTA negotiations provide the right geographic and substantive focus for our bilateral trade relationships in the context of the Europe 2020 strategy? (optional)
Over the last decade, the EU has also consistently engaged with its major strategic trading partners (such as the US, Japan, China and Russia) in regulatory dialogue and other forms of economic and trade cooperation. Our economic weight, notwithstanding current conditions, makes the EU an attractive partner for many countries, but this has not always translated into real progress in terms of a level playing field for EU companies, or new opportunities to do business and invest in these important markets:
Question 5: Should the EU now try for closer economic integration and cooperation with such partners? What is the best way to further facilitate trade and investment, overcoming regulatory differences that may have the effect of barriers to trade and deepening our trade relationships with these important economies? (optional)
Regulatory differences are nowadays often a more important source of trade hindrances than tariffs, especially between developed countries, with low tariffs but sophisticated regulatory systems resulting in additional compliance costs for crossborder activities. Reducing these costs can generate significant trade and economic benefits. In today’s world of global production chains, increased regulatory convergence at global level, for instance through the promotion of international standards or by other means such as the development of mutual recognition/equivalence of regulatory systems may help EU companies do business successfully abroad. The precise nature of the model to advance towards regulatory convergence will, however, depend on the specifics of the economic sector concerned:
Question 6: How can the EU improve the effectiveness of regulatory dialogues? How can the EU promote the establishment of and greater recourse to international standards without compromising legitimate public policy choices?
Shifting the regulatory dialogue from bilateral negotiations to multilateral negotiations would assist in aligning the diverse regulatory systems. There are also synergies to be achieved in working with other policy spheres. For example, regulatory regimes for food safety are a crucial trade issue and one that has even stood in the way of establishing free trade agreements between the EU and its neighbours. Measures to regulate food safety, especially when concerning cross-border trade have been negotiated in the WTO (the Agreement of Sanitary and Phytosanitary Measures), and in UN specialized agencies such as the WHO and the FAO (Codex Alimentarius). The WTO’s dispute settlement mechanism provides a means to achieve better recourse to international standards, and the WTO acknowledges the Codex Alimentarius as the reference point for settling disputes concerning food safety. This shows the importance of having standards which are based on sound scientific evidence – evidence which demands recourse.
The EU should support international organizations to develop evidence based norms and standards that can serve to align regulatory regimes and thereby facilitate trade by cutting transaction costs. It is equally important that action at the global level be supported with action on the ground. Many countries need support in order to build effective regulatory capacity to meet exacting standards. At the same time governments and international organization are only some of the actors that need to be involved. Industries need to cooperate I order to provide global public goods from which all can profit.
Securing a reliable and sustainable supply of raw materials is crucial for EU industry. Taking into account development policy and environmental sustainability concerns, securing this supply from third countries requires a coordinated approach regarding EU external relations and trade policy:
Question 7: How can the EU, and in particular trade policy, help to secure a reliable and sustainable supply of raw materials by third countries?
Current working conditions and business practices in the extractive industries are unsustainable in many countries. As a bastion of the enforcement of human rights, the EU has a responsibility to source raw materials ethically, and in coherence with its social and environmental policies. In negotiating trade agreements which secure raw materials from third countries the EU should also promote better worker safety measures and fight corruption.
Services are an increasingly important part of the global economy. A manufacturing supply chain is unthinkable without services inputs. Tackling barriers to trade with major partners in areas such as financial services and communication services; business services and Information and Communication Technology (ICT) too could give an important boost to EU economic recovery. At the same time, trade in many services, especially those that can be delivered through digital communication channels, has increased rapidly. Services negotiations, both under the WTO General Agreement on Trade in Services (GATS) and in Free Trade Agreements, have so far focused mainly on consolidating market access conditions already in place, and only rarely on creating new openings for services trade. The difficulties in securing significant new market access are holding back potential productivity increases and job creation in EU services sectors – and in manufacturing sectors:
Question 8: Should the EU aim for more trade in services, and if so, how?
Multilateral and bilateral negotiations have only partially succeeded in opening trade in services so far, so would a renewed focus on trade in services among key trading partners (plurilateral approach) offer a useful alternative avenue?
Yes, the EU should aim to increase trade in services and it should do this by bringing its trading partners together. In doing so the EU can look to agreement with other countries for multisource support for health and health services. In this regard international standard can guide the EUs action. The newly agreed WHO code on the ethical international recruitment of health workers and other WHO guidelines on the trade in health services can support EU activities in this area.
However, it is increasingly clear that delivering health solutions requires long term partnership at government and national health system level and with global and local academic/professional groups, businesses and civil society. Thus coherence between trade, foreign affairs and health policy, as expressed through global health diplomacy based on a European understanding of social markets offers the key to sustained export opportunities for the knowledge based health industries of the European Union.
Foreign direct investment (FDI) is an increasingly important means for businesses to participate in the dynamic economic development of markets around the globe.
Supplementing as well as complementing trade, FDI creates more direct and deeper links between economies. It is a source of extra capital, encourages efficient production, stimulates technology transfer and fosters the exchange of managerial know-how. However, the increasing importance of FDI as a driver of economic activity – the EU itself is one the largest source of FDI in the global economy – is not yet fully reflected in its global governance: the current differences in national rules and policies create an uneven playing field for economic operators. The Commission is currently preparing a Communication on this subject:
Question 9: Given that the Lisbon Treaty gives the EU greater competences in international investment policy, how should we contribute to facilitating crossborder direct investment (both outward and inward)? What are the key issues to be addressed in agreements governing investment?
The EU must insure that investment practices are coherent with other aims of European external, social and environmental policies. EU investments should also adhere to fundamental EU values. The EU should also work with business and trade partners to encourage that their investment strategies also reflect common values.
Health and many other areas of high market demand for EU services are knowledge based industries that require infrastructure including internet capacity and the capability to make use of knowledge based services. The Pan African Network (PAN) developed through cooperation between the African Union and the Government of India provides both an example of an investment intended to foster social and economic benefits and to provide increased opportunity for profitable trade. Engagement by the EU with PAN could offer benefits to all the partners in this development.
6. Sustainable trade
Environmental and social concerns extend beyond EU borders: climate change and degradation of natural resources, for example pose a threat to the prosperity and well being of people in rich and poor countries alike. Trade policy should to the extent possible support green and inclusive growth around the globe. This could be by including the opening up of trade in environmental goods and services or via trade incentives promoting labour and environmental commitments. Greening the world economy and putting it on a more sustainable footing, in particular, will require considerable regulatory work. We should be careful however to avoid ‘green protectionism’. On the other hand, possible negative environmental and social effects should be appropriately addressed:
Question 10: How can trade policy best support green and inclusive growth around the globe including through Sustainability Impact Assessments?
The EU should conduct values based impact assessments and focus strengthening coherence between trade and EU cross-sector policies, such as the EU Role in Global Health (COM(2010)281; Council Conclusions 10 May 2010). A thorough system of impact assessments has already been established and refined by the European Commission:
In accordance with the 2009 revision of impact assessment guidelines before the European Commission proposes new initiatives it must assess the potential economic, social and environmental consequences they may have. The specific questions to consider when assessing potential impacts are listed in tables 1, 2 and 3 (p.35-38). Implication for the external action of the EU is considered in relation to economic, social and environmental impacts. Further details on how to address specific aspects related to EU external action are listed in section 8.3.
The process of impact assessment supports the implementation of policy coherence; however the impact assessment guidelines should be strengthened in this regard. In most cases policy coherence is an implicit, and in some cases the guidelines call for “reference” to be made to existing policies. This is the case with EU external action where guidelines call for reference to be made to existing bilateral and multilateral agreements, and the EU framework Policy Coherence for Development. Firstly the language here should be strengthened. The support of policy coherence must be an explicit aim of impact assessments and impact assessments must to explicitly state whether a proposed policy may undermine, help or hinder not only the implementation of existing EU policies, but also the realization of stated fundamental principles and values of EU action.
Article 3 of the Lisbon Treaty states that in its relations with the wider world, the Union shall uphold and promote its values. Currently the impact assessment guidelines do not include an analysis of how this article is being fulfilled. In the case of global health, trade can have pronounced implications. A values based impact assessment would ensure that the EU is consistent in its external action. For trade policies in particular, new initiative should be cross-checked against the new EU framework policy on global health (COM(2010)128; The EU Role in Global Health; SEC(2010)380; SEC(2010)381; SEC(2010)382) and their accompanying Council Conclusions (3011th Foreign Affairs Council Meeting; 10 May 2010).
Applying a values based approach would allow for beneficial nuances in trade policy avoiding blanket one-size-fits all policies. For example, and with particular regard to neighbouring EU countries, regulatory alignment may be generally seen as a mutually beneficial objective leading to more efficient trade. Regulatory alignment is already an objective of external action implemented through free trade agreements (FTA) between the EU and third countries. Such alignment can have great benefits for human health in Europe as well as in third countries. For example, pursuing regulatory alignment in food safety and agricultural production through FTAs safeguards public health in the EU and abroad. However, regulatory alignment can also have negative consequences for health. With regard to protection of intellectual property rights regulatory alignment needs to satisfy the legitimate concerns of both patent holders and consumers. Price should not be a bar to access to life saving medicines or technologies. The strict property rights protections enforced in the EU should not be forced on third countries as prerequisites for FTAs, such as in the case of TRIPS-plus rules.
The EU is a major market for agricultural imports from developed and developing countries. The EU is also a key producer and exporter of processed food and other high value agricultural products:
Question 11: Given the forthcoming revision of the Common Agricultural Policy and the continuing need to foster a sustainable agricultural sector in Europe, how should EU trade policy develop in this area consistently with the overall objectives of the Lisbon Treaty?
The burden of diet-related disease has grown considerably since CAP was first implemented. Once thought of as the pestilence of wealthy nations, obesity, diabetes and cardiovascular disease are now some of the most common causes of death in middle and even low income countries. CAP reform offers a significant opportunity to address the determinants of this trend. Under CAP there are still a number of significant “market distortions” in relation to certain food prices and production processes which potentially increase the burden of disease. Further reform should aim to remove these distortions to promote health and wellbeing.
EU trade policy is closely linked to the CAP “market measures” which aim to make European agricultural products competitive on the world market despite higher costs of production in Europe. The European sugar industry is one problematic sector which has been in the spotlight since a 2004 WTO ruling declared EU support to the sugar industry violated international trade rules. According to figures released in April 2010 the European sugar industry raked in some of the largest CAP subsidies in 2009. Justification for these subsidies were that they were one-off payments for the implementation of sector wide reforms and that much of the funding was actually from a tax that had been levied on sugar producers themselves. Nonetheless, the Commission spokesperson for Agriculture, Roger Waite fully acknowledges these payments as “aid for exporting”.
The trend in recent CAP reform has shifted money from market measures to rural development policy which focuses more on “public goods”, though health has not been formally recognised as a public good. A clearer focus on reducing support to the production of foods high in fat, sugar or salt is needed. EU Trade policy needs to work in cooperation with agricultural policy to promote the provision of global public goods for health. The EU should work with multilateral agencies such as the WTO, the WHO and the FAO, to establishing international standards that put the right to health before the pursuit of profits. In addition, EU trade and common agricultural policy should work to promote the production and export of highly nutritious foods such as fruit, vegetables, whole grains and leaner meats.
- UK National Institute for Health and Clinical Excellence. Preventing of cardiovascular disease at population level. NICE public health guidance 25, June 2010. http://guidance.nice.org.uk/PH25 accessed 22 July 2010
7. Inclusive trade
The distribution of the benefits to trade is also affected by the changes in the way business in conducted today. The European economy is increasingly dependent on the participation of its businesses in global value chains. A final product often incorporates hundreds of subcomponents, which are traded back and forth around the globe before reaching the final consumer. Greater openness in trade has allowed this to happen:
Question 12: How can EU trade policy ensure that the benefits of global value chains are shared by European producers, consumers and jobholders?
The health sector provides several examples of the need to establish global value chains. In addition to the development of ITC infrastructure and capability to deliver knowledge based services such as health as noted earlier, improved access to medicines also requires the development of pharmacy knowledge and skills plus infra structure for the delivery of drugs, such as cold chain supplies.
The gains from trade are not evenly distributed, and adjustments can lead to short-term costs in the form of unemployment, retraining the workforce and converting production structures. The EU has a number of instruments available to address the problem of adjusting to new global trade patterns, such as EU Structural Funds, he European Social Fund (ESF), and the European Regional Development Fund.
In addition, the EU launched the European Globalisation Adjustment Fund (EGAF) in 2007, which offers a general response in terms of managing the negative employment effects of globalisation. The EGAF is designed to provide one-off individual support for a limited period to workers who are ‘severely and personally affected by trade adjustment redundancies’. In the longer term, the aim is to help redundant workers find and hold on to jobs:
Question 13: Are existing ‘flanking’ policies sufficient to ensure that the benefits of trade are shared among different people and across different regions and markets in the EU? And how can the EU best ensure, where necessary, that trade and other policies play their part in helping people, sectors and communities adjust? (optional)
8. Trade and Development
The link between trade and development has become a major issue in recent decades as more and more countries, especially in Asia, have shown that trade can be an important means of boosting economic growth and lifting people out of poverty. The EU is a global player and takes its development responsibilities seriously. It is negotiating and implementing Economic Partnership Agreements with a view to sustainable development and regional integration in Africa, the Caribbean and the Pacific. Negotiations have also taken place with the Central American and Andean Community countries. A parallel consultation is already in progress on reforming the EU’s general system of preferences for developing countries. However, trade policy alone cannot address the development challenges some countries face. Note that in light of the importance and scope of the topic, a future communication on trade and development will address these complex linkages between these policies. This too will be preceded by a public consultation:
Question 14: How can the EU best strengthen the issue of trade and development in its trade policy? Should the EU pursue a more differentiated approach in its trade relations to reflect the level of development of particular partners? How should the EU approach the issue of trade preferences in relation to the generally low level of EU Most Favoured Nation (MFN) tariffs, which will further be eroded following the possible conclusion of the Doha Round?
The growth in income inequality (definition of inequality) not just between, but within nations, demands that the EU take a much more differentiates approach to trade relations that reflect development levels of partners – not only at national level, but also in the case when trade is negotiated directly with subnational government entities. Trade preferences need not only be linked to tariff levels. For example, the flexible application of TRIPS in the case of generic medicines and the use of tiered pricing even within countries.
9. ‘Smart’ trade
The Europe 2020 strategy emphasises the ‘smart’ growth dimension, that is to say growth driven by innovative products, services and industries. A number of emerging market economies are likely to catch up with the technologies of the developed economies, at least in some sectors. Convergence between developing and developed countries can boost our economy, including in new and innovative ‘smart’ high-tech goods and services. While tariffs may be an issue in some instances, de facto barriers might arise as a result of divergent regulatory developments. Fortunately, in many of these high-tech domains, regulation is still on the drawing board. Upstream regulatory dialogue on these newly emerging technologies, addressing both risks and the response to risks, could facilitate international convergence and avoid the emergence of new barriers to trade:
Question 15: What initiatives could the EU take and which EU trade policy instruments could we mobilise to complement and reinforce the ‘smart’ dimension of the Europe 2020 strategy and facilitate trade in high-tech goods and services?
As we have noted health provides a broad range of opportunities for knowledge based high tech goods and services. To fully develop the potential of this field the EU needs to undertake a long term strategic assessment of global health markets over the next 20-30 years. This will help to identify the investments in basic research, infrastructure and training needed to support the development of opportunities in genetics, bioengineering nano-technology and other fields which will be important to EU and global health. Such a long term view would also provide opportunities for European companies, who might be considered as competitors in the short term to work together with basic research teams to develop multi technology solutions to health challenges.
10. Enforcement and dealing with unfair practices
The EU benefits from being one of the most open economies in the world by having access to cheaper goods and services, for citizens, the public sector and companies. It is in a strong position to shape globalisation and promote its interests. At the same time, we should not be naively open and defenceless in the face of unfair practices by some of our trading partners, e.g. distortion of international competition by the payment of unfair subsidies, in cash or in kind, or by dumping practices.
To defend the EU against such practices, we have recourse to trade defence instruments, in line with WTO obligations. In addition, existing multilateral, bilateral and plurilateral agreements provide for enforcement tools, including dispute settlement. This is particularly important with risk of protectionist measures still high in the aftermath of the economic crisis:
Question 16: How can the EU best safeguard its firms or interests against trading partners who do not play by the rules? Are the existing tools and priorities sufficient to address unfair competition from third countries?
The EU should continue to work globally with existing tools for trade dispute settlement, however playing by the rules needs to start at home. Trade policies should encourage European industries to adhere to European values, good governance practices, and the put an end to corrupt practices. Trade disputes are also increasingly important aspects of global diplomacy not least with regard to pharmaceutical products in which field counterfeit products are a common problem. The EEAS could therefore play an important role in protecting EU trade interests in health and other spheres.
Many partner countries still give limited access to their markets, for example to their procurement markets by giving national preferences to their enterprises. The EU is also looking into new areas such as access to raw materials and energy (see question 7 above). Furthermore, the EU has developed a comprehensive Market Access Strategy which uses a variety of formal and informal tools to make sure that European companies can make use of the market access opportunities which have been negotiated in trade agreements.6 Following the recommendations of the Europe 2020 Communication, an annual trade and investment barriers report identifying ways to improve market access and regulatory environment for EU companies will be presented to the Spring European Council starting in 2011:
Question 17: How can the EU best safeguard its firms or interests against major trading partners who maintain an asymmetric level of openness and resort to protectionist measures? Are the existing tools and priorities sufficient to address practices such as keeping EU suppliers out of government procurement markets, market access restrictions, restricted and insecure access to energy and raw materials?
As noted above health provides examples of the way in which trade, health and diplomacy need to be drawn together to protect the interests of EU and partner country consumers in health. In this as in other fields local intervention needs to be linked to action at global level to establish and apply international agreements to ensure a level playing field in terms of information and enforcement of standards.
One important factor in promoting ‘high-quality’ growth is innovation, for which the Europe 2020 strategy also has a number of initiatives. Ideas and innovation need to be protected through effective protection of Intellectual Property Rights (IPR), including geographical indications (GIs). This is why the Commission in November 2004 put in place a strategy for enforcing IPR outside the EU. The strategy is currently being evaluated, and an Enhanced IPR Protection and Enforcement Strategy in third countries is due to be launched in 2011. Cooperation is also underway with major partners in order to promote better respect of IPR rules in third countries. Other issues such as access to medicines in developing countries need to be taken into account:
Question 18: What else can EU trade policy do to further improve the protection of IPR in key markets? (optional)
11. An open approach to shaping trade policy
The Commission is committed to shaping trade policy as openly and democratically as possible. Thanks to the Lisbon Treaty, the increased role for the European Parliament in trade policy improves both the accountability and the transparency of trade policy. However, in addition, trade policy should build on a wide range of points of view inside the EU and from other parts of the world. There are a number of structures, such as DG Trade’s Civil Society Dialogue to assist with this, but the approach can further evolve to take full account of the new EU institutional environment and changes in modern communications technology:
Question 19: What more should the Commission do to ensure that trade policy becomes more transparent and to ensure that a wide variety of views and opinions is heard in the policy-making process?
Trade is not simply driven by tariffs and production and distribution costs, ultimately consumer preferences play a vital role in trade, in many EU countries the “Fair Trade” movement has played a growing role in purchasing patterns. Thus steps to enhance trade should go hand in hand with raising consumer awareness and engaging civil society. This should ensure that the public has a realistic understanding of what products are good for health and what impact these products have on health and wellbeing in the countries from which they are derived – for example was child labour used or are local producers exploited. DG Trade should therefore work to ensure policy coherence by engaging with the institutional forums that have been established by other directorates, such at DG SANCO’s European Health Forum, the EU Platform for Action on Diet, Physical Activity and Health, and the European Alcohol and Health Forum.
Question 20: Are there additional priorities in relation to trade policy that the Commission should pursue?
EU Trade policy needs to work with other EU policy spheres to promote mutual legitimacy and capacity across various directorates. Just as the 2010 phasing out of tobacco subsidies boosts the legitimacy of the EU as a global leader in the fight against tobacco related deaths and disease, DG Trade must do more to boost the EU’s legitimacy as a bastion for human solidarity, universal and equitable access to quality health care products and services. Trade policy must reconcile EU interests with EU social and environmental responsibilities and commitments. Trade more than any sector should understand the implications of increased global interdependence, the great benefits it brings and the risks that also have to be collectively managed. Trade is not an end in itself, it must be understood as one of the tools the EU has to achieve goals beyond the creations of jobs and wealth. The health sector increasingly realized that coherence is a two way road, that there is no coherence for health, or for development – coherence is achieved between policy spheres, bridging difference and negotiating compromises for the greater good.
Question 21: Do you oppose publication of your contribution? If yes, please provide the specific reasons for which you consider that your interests would be harmed if it was put in the public domain