EU highlights trade-led growth as central to modern development agenda

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A range of proposals to make trade and development instruments work hand-in-hand to ensure real poverty reduction across the world have been announced by the European Commission.

The proposals aim at reinforcing the trade capacities of developing countries by making trade part of their development strategy. To ensure targets are reached the EU is currently looking into better ways of differentiating between developing countries to ensure the world’s poorest countries receive the most help.

The role of trade is underlined in the proposal as one of the key drivers to support development, stimulate growth and to lift people out of poverty.

The Commission proposes a number of ways to improve the effectiveness of EU trade and development policy, including:

• reforming the EU’s preferential trade schemes to focus more on the poorest countries
• stepping up negotiations on free trade agreements with our developing country partners. These must look beyond tariffs to tackle the real barriers to trade
• increasing the use of EU instruments to promote foreign direct investment, including relevant provisions in free trade agreements to enhance legal certainty and combining EU grants with loans or risk capital to support the financial viability of strategic investments
• facilitating developing country exporters, especially small operators, to enter the EU
• assisting developing countries to improve their domestic business environment, meet international quality, labour and environmental standards and take better advantage of trade opportunities offered by open and integrated markets
• using trade measures to help mitigate the effects of natural disasters and tackle conflict catalysts, including in mining activities

The Union also calls on 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.