Trade investment presentation

Coherence for Governance:
The European Parliament &
EU Trade and Investment Policy
Christopher A. Hartwell
President, CASE
September 23, 2014
• 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
• Internal: consistency across modalities (grants, aid,
technical assistance)
• Multilateral: consistency across international financial
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:
• Investment policy in EU less fragmented in concept
but more in practice
• Idea of shared competence
EU Trade/Investment Policy:
Intended Incoherence?
• From
protectionism (1970s/80s)
to staunch multilateralism
(1990s) to bilateral focus
• Common
Policy an example of the
difficulties in defining a
goal/coherence for trade
• Acknowledged
removing CAP would
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
• 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
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
• 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
The Role of the European
Parliament in CFG
Elevation of EP in trade policy
in recent years means it can:
• Support
commitment and issuing
policy statements
• Ensure coherency in trade
• Oversee and monitor end
products for CFG
1. Political
and policy
3. Systems for
analysis and
2. Policy
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
• 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
• Coherence for Governance is a way to bring
policy coherence to EU trade and investment
• …and attempt to improve utilization of trade
and investment agreements in partner
• The European Parliament has a large role to
play as overseer and guarantor of this
• Implemented correctly, this form of coherence
can have great rewards for both the EU and
partner countries
Thank you for your attention!

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