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Multilateral financial assistance to Ukraine - January 2024 EN

11-01-2024 PE 733.763 AFET BUDG ECON INTA
Analiżi fil-Fond
Sommarju : This paper provides a snapshot of multilateral financial assistance provided to Ukraine since the start of the Russian invasion in February 2022 by the European Union and its bodies (European Investment Bank), international financial institutions (International Monetary Fund, World Bank Group, and European Bank for Reconstruction and Development) and groups of bilateral creditors (“The Group of Creditors of Ukraine”). The paper aims to increase understanding and support scrutiny of international financial assistance to Ukraine. The Annex provides information on the conditions attached to EU and IMF loans.
Awturi : Drazen RAKIC

Policy Departments’ Monthly Highlights January 2024 EN

Mad-Daqqa t'Għajn
Awturi : ANDRZEJ SANDERSKI, ANNA MANGINI

AT A GLANCE Policy Departments’ Monthly Highlights - December 2023 EN

Mad-Daqqa t'Għajn
Awturi : ANDRZEJ SANDERSKI, ANNA MANGINI

Stakeholder consultation report on the implementation of selected aspects of the EU-Canada Comprehensive Economic and Trade Agreement (CETA) EN

15-11-2023 PE 753.175 INTA
Studju
Sommarju : The European Parliament's Committee on International Trade is currently scrutinising implementation of the EU-Canada Comprehensive Economic and Trade Agreement (CETA) through a dedicated report. This stakeholder consultation report offers evidence in support of the committee's work on the implementation report. The stakeholder consultation report focuses on key areas that have garnered significant attention throughout the CETA negotiations and the ratification process. It also discusses provisions that have posed challenges or remained under utilised. Trade data indicate that CETA has had a positive impact on EU-Canada trade in goods and services. Stakeholders, including businesses and civil society, generally express satisfaction with CETA's implementation after the initial 5-year provisional application period, noting growth in bilateral trade, positive public procurement outcomes, and the absence of major concerns in protecting public service sectors. However, some challenges remain, such as the need for more concrete progress in regulatory cooperation, increased transparency in committee activities, greater business involvement to minimise government-to-government discussions, and improved engagement of civil society, particularly regarding labour and environmental protection issues. Stakeholders have also raised concerns about the incomplete ratification of CETA. Swift ratification is essential to bolster and enhance the EU's trade policy credibility, not least in view of other significant trade agreements, such as the EU-Mercosur agreement, the deal with New Zealand, and potential future trade agreements with other countries.
Awturi : This paper has been written by Dr Matthias Bauer of the Tutwa Europe Network at the request of the Ex-post Evaluation Unit of the Directorate for Impact Assessment and Foresight, within the Directorate-General for Parliamentary Research Services (EPRS) of the Secretariat of the European Parliament.

Dual-use and cyber-surveillance: EU policies and current practices EN

01-10-2023 PE 754.439 INTA
Briefing
Sommarju : This briefing paper on dual-use and cyber-surveillance provides on overview of current EU export controls of dual-use items in general and cyber-surveillance items in particular, and what the approach is in countries such as the US, the UK and Japan. It explains the impact of the sanctions against Russia on the export of dual-use items and the use of cyber-surveillance in the conflict in the Ukraine. The Dual-use Regulation 2021/821 has broadened the scope of export controls and defines a new category of dual-use items, namely ’cyber-surveillance items’ which is incorporated in the list of dual-use items in Annex I of the Regulation. Further-more, the Regulation introduces a catch-all clause which makes the export of cyber-surveillance items not listed in Annex I subject to export authorisation when intended for use in connection with internal repression and/or the commission of serious violations of human rights and international humanitarian law. Regarding the sanctions against Russia, the EU had published 11 sanctions packages by mid-November 2023, including the prohibition of direct or indirect export to Russia of dual-use items listed in Annex I of the EU Dual-use Regulation. In addition, technologically advanced items as listed in Annex VII to the sanctions Regulation 833/2014 are also prohibited for export to Russia. The EU is cooperating with the US, the UK and other allies to align on the sanctions measures against Russia. There is less international alignment regarding export restrictions on semiconductor equipment and technology destined for China.
Awturi : Rudi Du Bois & Alexandre Tapia Reyes

The cumulative effect of due diligence EU legislation on SMEs EN

15-09-2023 PE 702.597 INTA
Studju
Sommarju : This study addresses the expected impact of the EU’s Corporate Sustainable Due Diligence Directive (CS3D) on small and medium-sized enterprises (SMEs). It takes the German supply chain act (Lieferkettengesetz) as an example that may hold lessons for EU due diligence legislation. Against the background of a review of the existing literature on the impact of sustainability regulations, we conducted expert interviews with German business associations, German foreign chambers of commerce in emerging economies, as well as German supporting agencies. The objective was to identify key challenges SMEs in the EU and third countries face when dealing with the requirements of the supply chain act, and to discuss support measures that SMEs need or are already using. Based on the results of this analysis, we provide recommendations as to how the EU can help ease the burden for SMEs when implementing the proposed CS3D. These include targeted capacity-building measures for SME suppliers in developing countries, who mostly know little about European due diligence legislation, and simplifications in the reporting requirements for SMEs in Europe.
Awturi : Rainer THIELE, Aoife HANLEY, Finn Ole SEMRAU, Frauke STEGLICH

Kenya and its role in intra-Africa regional trade: The prospects of the EU-Kenya EPA EN

24-07-2023 PE 702.596 INTA
Briefing
Sommarju : This briefing provides an insight into the implications of the EU's Economic Partnership Agreement (EPA) with Kenya – with a particular focus on the extent to which it could affect regional trade in the East African Economic Community (EAC) and the African Free Trade Area (AfCFTA). It examines the new EPA and its implications in terms of its trade schemes as well as provisions in the area of sustainable development. It provides an overview of key factors that may affect regional and intra-African trade, such as AfCFTA, bilateral trade agreements with key trading partners such as China, the UK, and the US, and new initiatives such as EU-US cooperation on connectivity with Kenya. The briefing concludes with recommendations for Members of the European Parliament.
Awturi : Andreas MAURER et al

EU trade and investment following Russia's illegal invasion of Ukraine EN

20-07-2023 PE 702.591 INTA
Studju
Sommarju : The briefings offer an overview of EU’s trade and investment relations before the start of the full-scale Russian invasion and a data-supported analysis of recent trade developments. They address the trade patterns of Ukraine and Russia, the economic structure of the two countries, and the EU’s dependencies on Russia as well as the EU's alternatives for Russian imports, focusing on the energy sector and critical raw materials. The final briefing provides an overview of the sanctions imposed by the EU and other nations (Australia, Canada, Japan, Korea, the UK and the USA). It analyses the sanction effects accumulated so far and their impact, including the EU’s decoupling process from Russian energy and explanations for the less-than-initially expected contraction of the Russian economy in 2022. The paper analyses the short, medium and long-term effects of the sanctions on the economies of the EU, Russia and Ukraine.
Awturi : Zsolt Darvas et al.

Aligning European export credit agencies with EU policy goals EN

09-06-2023 PE 702.590 INTA
Analiżi fil-Fond
Sommarju : Export credits are a traditional instrument used in many member states of the European Union to support the export activities of firms. They are typically provided by export credit agencies (ECAs), which in turn receive support from governments. There are currently 25 such ECAs in 21 EU member states. Financial and indirect support to exporters provided through these ECAs is significant. Recent policy initiatives of the European Commission, such as the European Green Deal and Global Gateway, raise the question of how aligned these transactions and their underlying due diligence practices are vis-à-vis high-ranking policy goals such as the green transition. The objective of the present study is to explore and compare EU trade policy in the field of export credits with a view to their alignment with these policy goals. Drawing on information from ECA annual activity reports in conjunction with expert interviews, this study identifies ongoing commitments, practices and standards and discusses the extent to which ECAs are in line with EU policy commitments. The paper outlines a set of recommendations on how ECA coherence with EU goals could be strengthened in the future, proposing, among other things, that the EU push for more systemic forms of climate risk assessment and more ambitious public disclosure practices among ECAs.
Awturi : Lukas SCHLÖGL, David PFAFFENBICHLER and Werner RAZA

Policy Departments’ Monthly Highlights - March 2023 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

Global value chains: Potential synergies between external trade policy and internal economic initiatives to address the strategic dependencies of the EU EN

01-03-2023 PE 702.582 INTA
Studju
Sommarju : Global value chains enable two-thirds of international trade, notably for the EU. The EU wants to preserve its commercial links with third countries and organisations to make up for trade disruptions. This study examines sustainable supply of raw materials, commodities, and critical goods using the EU's Open Strategic Autonomy concept. It examines which raw material are crucial for sustainable supply and necessary for the green transition. The paper examines EU internal legislation and international cooperation instruments to determine the EU's disruption risk. It evaluates the economic impact of EU preferential trade agreements on raw material availability. The study illustrates the political and economic relevance of raw material partnerships and plurilateral and bilateral trade agreements. It analyses the EU's toolbox for safeguarding its interests and making independent trade choices to counteract other actors' unfair practices and intervention. Finally, the paper examines regulatory frameworks, international alliances, and activities to find ways to strengthen global value chains in critical EU industries.
Awturi : Alessia A. AMIGHINI, Andreas MAURER, Elitsa GARNIZOVA, Jan HAGEMEJER, Peter-Tobias STOLL, Marcus DIETRICH, Riya ROY, Agnieszka SKOWRONEK, Davide TENTORI

Policy Departments’ Monthly Highlights - January 2023 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

Trade aspects of China’s presence in Latin America and the Caribbean EN

08-12-2022 PE 702.572 INTA
Briefing
Sommarju : Over the last 20 years, China has become the second largest trading partner of Latin America & the Caribbean (LAC). Between 2000 and 2020, China-LAC trade grew 26-fold from USD 12 billion to USD 310 billion. China is also among the top sources of foreign direct investment and finance for the LAC region. The impact of China in LAC is closely related to the Latin American boom in commodities extraction, and infrastructure construction. While traditional commodities continue to be important, trade in new sectors (such as minerals that are crucial for renewable energy – e.g. lithium) as well as in services, is growing rapidly. Although LAC profited from expanded economic interchange with China due to positive terms of trade effects, the long-term implications of the asymmetrical dependence of LAC countries on China remain in doubt. LAC countries have not been able to upgrade in many global value chains that rely on inputs from the region, with its technological capabilities stagnating. China has also successfully used soft power instruments to expand its influence in LAC. In reaction to these new realities, the EU should offer LAC a strategic partnership based on fair and sustainable trade and on intensified technological and political cooperation. Raw-material partnerships based on human rights and environmental sustainability should be supported. Finally, the two regions could join forces to promote a new multilateralism.
Awturi : Werner Raza, Hannes Grohs

Ways forward for EU-Africa trade and investment relations EN

30-11-2022 PE 702.567 INTA
Studju
Sommarju : Africa-EU trade relations have a longstanding tradition. The EU remains the biggest trading and investment partner for most African countries, especially for those implementing Economic Partnership Agreement (EPAs) with the EU. The workshop shall provide a data-based discussion of the impact of current EPAs on economic regional development (and recent trends on intraregional economic integration in Africa) as well as an overview of EU's sustainable investment facilitation agreements negotiated with African countries. This workshop also will discuss the strategic economic and trade interests that the EU has in Africa, while looking into the challenges for the EU in these regions.
Awturi : Cecilia Bellora, Cristina Mitaritonna, Andreas Maurer

Trade-related policy options of a ban on forced labour products EN

25-11-2022 PE 702.570 INTA
Analiżi fil-Fond
Sommarju : This in-depth analysis explores how EU trade policy tools can effectively tackle the import and circulation of forced labour products in the European single market in order to help implement the Commission’s decent work worldwide initiative. The report compares the option of an EU import ban on forced labour goods to the option of prohibiting the marketing of such products, in light of the Commission’s proposal for a Regulation on prohibiting products made with forced labour on the Union market published on 14 September 2022. The paper also analyses the likely economic and social impact of the proposed measures (in the EU and abroad), as well as the legal feasibility of these tools.
Awturi : Cécile JACOB, Dr. Pierre HAUSEMER, Dr. Klaus FRIESENBICHLER, Dr. Birgit MEYER

The European Union’s relations with Armenia and Azerbaijan - European Implementation Assessment EN

09-11-2022 PE 734.676 AFET INTA
Studju
Sommarju : In December 2021, the European Parliament's Committee on Foreign Affairs (AFET) launched an own-initiative procedure (2021/2230(INI)) on EU-Armenia relations and another on EU-Azerbaijan relations (2021/2231(INI)). The appointed rapporteurs are, respectively Željana Zovko (EPP, Croatia) and Andrey Kovatchev (EPP, Bulgaria). To accompany its scrutiny work, Parliament's Committee on Foreign Affairs (AFET) requested the Ex-Post Evaluation Unit Ex-post Evaluation Unit of the Directorate for Impact Assessment and European Added Value, within the Directorate-General for Parliamentary Research Services (EPRS) of the Secretariat of the European Parliament, to prepare a European implementation assessment on the implementation of the EU's Comprehensive and Enhanced Partnership Agreement (CEPA) with Armenia, and Partnership and Cooperation Agreement (PCA) with Azerbaijan.
Awturi : HANNAH NAFIZE AHAMAD MADATALI, Talander Hugo JANSEN

Policy Departments’ Monthly Highlights - October 2022 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

EU-US Trade and Technology Council: Impact of the war in Ukraine and the way forward EN

26-09-2022 PE 733.661 AFET INTA
Briefing
Sommarju : The EU-US Trade and Technology Council (TTC) was formally launched during the EU-US Summit in June 2021 to intensify transatlantic cooperation, expand bilateral trade and investment, and reinforce the parties' technological and industrial leadership. Another aim is to ensure that trade and technology serve society and economy while preserving shared values. The TTC has held two high-level political meetings, in September 2021 in Pittsburgh and in May 2022 in Paris-Saclay. These meetings steer cooperation within the TTC and guide its 10 working groups whose remit includes technology standards, secure supply chains, tech regulation, global trade challenges, climate and green technologies as well as investment screening and export controls. Since its launch, the TTC has created a community of experts and policy-makers from both sides of the Atlantic who now regularly work together. Joint work in areas such as standards, integrity of information, supply chains, green public procurement and addressing non-market practices has yielded the TTC's first successful steps. Moreover, Russia's war on Ukraine is thought to have strengthened both the transatlantic relationship as a whole and the TTC, which has played a key role in ensuring swift and coordinated roll-out of export controls. After the war broke out, the TTC started supporting coordinated economic action to counter Russia's autocratic attempts to also undermine the security of other nations. Yet, while the TTC has done well in areas related to war, some underline that it must deliver tangible results across all the work strands to increase its importance and impact. So far, the TTC has focused mostly on information-sharing, joint mapping, risk identification and exploring options for closer cooperation in the future. Its success may well depend on the degree of alignment the parties can achieve across the policy areas and on whether they can move from joint identification of issues to elaborating common responses and solutions to them. The European Parliament supports the establishment and work of the TTC, while calling for a more democratic scrutiny over it. The next TTC meeting will take place before the end of 2022 in the United States.
Awturi : Marcin SZCZEPANSKI

Tracking the EU Commissioners’ commitments - Von der Leyen Commission, 2019 - 2024 EN

Briefing
Sommarju : This document is a compilation of briefings that track the commitments made by the Vice-Presidents and Commissioners to the European Parliament – in their written answers to Parliament’s questions, at their hearings, and, in some cases, in subsequent appearances before Parliament’s committees. The document provides an overview of the state-of-play at the mid-term of the von der Leyen Commission. Since many of these commitments were made, major international crises have shifted some political priorities. The Vice-Presidents’ and Commissioners’ progress on their commitments should be considered in this context.

Tracking the EU Commissioners’ commitments - Von der Leyen Commission, 2019 - 2024: Valdis Dombrovskis EN

20-09-2022 PE 695.489 EMPL ECON INTA
Briefing
Sommarju : Follow-up of the commitments made by Dombrovskis in his capacity of Executive Vice-President and in his capacity of Commissioner for Trade (and his predecessor, Phil Hogan) since 2019.

Multilateralism and Democracy. A European Parliament perspective EN

Analiżi fil-Fond
Sommarju : This analysis looks into the complex relationship between two trends in international governance: an increase in multilateral arrangements between countries in order to govern internationally on the one hand, and a lack of democratic control over the decisions taken by multilateral organisations or conferences on the other. Multilateralism in the modern sense refers to an international mode of operation involving peaceful negotiations and diplomacy, also referred to as a ‘rules-based international order’ or ‘rules-based multilateralism’. Several European countries have recently launched initiatives in support of multilateralism, in reaction to the increasingly unilateral behaviour of states undermining the existing rules-based international order. Apart from the European Union, no other multilateral organisation has a parliamentary body with the competence to block or amend its decisions, which indicates that there is a democratic deficit in these multilateral organisations. An initial response to such a democratic deficit is the involvement of national parliaments in international decision-making. This is known as ‘parliamentary diplomacy’. Secondly, the involvement of civil society in international decision-making through protests, petitions, consultations or participation can also enhance democracy. Thirdly, the organisation of national referenda on international decisions can be used by national governments or citizens’ initiatives to increase democratic legitimacy. Fourthly, a lack of democracy at international level can also be countered by creating an ‘alliance of democracies’, aimed at multilateral cooperation between democratic countries rather than the democratisation of multilateral organisations. These are mostly alliances of Western countries, which risks emphasising the differences between West and East or North and South. Three short case studies of parliamentary diplomacy with the strong involvement of the European Parliament (the Parliamentary Conference on the World Trade Organization (WTO), delegations to the Conferences of Parties of climate change agreements and the NATO Parliamentary Assembly) show that enhancing multilateral democracy is not the only aim of parliamentary diplomacy and that each case reveals a different mix between the ‘parliamentary’ aspect of democratisation and the ‘diplomacy’ aspects of information exchange or influencing.
Awturi : Mario DAMEN

Rules on export and import authorisations and transit measures for firearms EN

17-05-2022 PE 699.507 LIBE INTA
Briefing
Sommarju : Regulation (EU) No 258/2012 lays down procedural rules at EU level for export, import and transit of firearms, their parts and components and ammunition. Its overall strategic objective is to reduce the risk of illicit trafficking in firearms for civilian use by ensuring coherence across EU Member States with regard to rules on external trade. The regulation is part of an overall legal and operational framework intended to prevent, detect, investigate and prosecute firearms trafficking. In this regard, the regulation implements Article 10 of the United Nations (UN) Firearms Protocol, a key international agreement adopted in 2001 and ratified by the EU, to ensure firearms traceability. Neither the legislative proposal reviewing the regulation, mentioned in the 2021 Commission work programme, nor the impact assessment are available yet. However, the 2017 Commission evaluation of the regulation had already found scope to address a number of shortcomings. Based on this evaluation, the Commission established that these shortcomings were mainly derived from a lack of clarity in certain parts of the regulation, and legal mismatches generating security risks. The review of Regulation (EU) No 258/2012 also aims to align the regulation's scope with that of Directive (EU) 2021/555 (the 'Firearms Directive'), already revised, and Council Common Position 2008/944/CFSP (as amended), in order to close the gaps between diverging procedures – in particular, gaps concerning diverging import procedures for convertible alarm and signal weapons, and semi-finished unmarked essential components – which cause the smuggling of these weapons and components to prevail.
Awturi : HANNAH NAFIZE AHAMAD MADATALI

Review of Directive 2002/65/EC on distance marketing of consumer financial services EN

11-05-2022 PE 699.505 INTA
Briefing
Sommarju : Adopted in 2002, Directive 2002/65/EC on Distance Marketing of Consumer Financial Services introduced a legal framework for governing the distance marketing of financial services, such as banking, loans, insurance and investment. Back then, when relevant legislation was limited at Member State level, the directive aimed to improve consumer protection rules for financial services sold at a distance and to consolidate the internal market by aligning rules in this area. Since its adoption, however, the legal framework and digital landscape for retail financial services has evolved significantly. A 2020 Commission ex-post evaluation of the directive highlighted that it has been effective in strengthening consumer protection and largely remains relevant through its safety-net function. However, the overlap of its provisions with product-specific and horizontal EU legislation, as well as changes to the financial services market have decreased the EU added value and relevance of the directive over time. In addition, digitalisation is found to have amplified some of its practical weaknesses. Subsequently, a review of the directive was included among the REFIT initiatives of the Commission's 2020 work programme, and an inception impact assessment was published in May 2021.
Awturi : NORA ANDREA WUKOVITS

EU response to economic coercion by third countries EN

11-05-2022 PE 730.326 AFET IMCO INTA
Briefing
Sommarju : This initiative focuses specifically on the issue of economic coercion and the EU's possible response, aiming to preserve the EU's open strategic autonomy and policy-making space. The IA clearly defines the problem, its underlying causes, and the objectives to address it. The creation of a new legal instrument to deter and counteract economic coercion is the only type of option retained for analysis. This presumably follows on from the political commitment made in early 2021 (although this is not stated explicitly in the IA). This option was broken down into several policy options based on possible parameters used for the design of the instrument. The IA is substantiated by academic work, stakeholders' contributions and examples. The majority of stakeholders support a new policy instrument and their input contributed to the design of the proposed instrument. The IA focuses mostly on economic impacts, while social and environmental impacts are assessed briefly. Important benefits are expected from the instrument. Costs are expected only from its use, in particular from the application of countermeasures. The IA focuses on a qualitative assessment of impacts linked to the instrument's creation and existence, acknowledging that the impacts linked to the instrument's use are difficult to estimate at the design stage. Adequate monitoring and evaluation of the use of the instrument and of progress made against the objectives will therefore be important aspects that would have benefited from further detail in terms of indicators and provisions. The proposal generally reflects the preferred option of the IA, although some elements differ from the IA, such as the objectives and definition of economic coercion.
Awturi : VERONIQUE GIRARD

EU-Ukraine trade and investment relations and the impact of Russia’s war EN

06-04-2022 PE 639.321 INTA
Briefing
Sommarju : The EU-Ukraine Association Agreement is the main tool for bringing Ukraine and the EU closer together: it promotes deeper political ties, stronger economic links and the respect for common values. The Agreement was negotiated between 2007 and 2011, signed in 2014, and entered into force on 1 September 2017 after unanimous ratification by EU Member States. The Association Agreement includes a Deep and Comprehensive Free Trade Area (DCFTA) between the EU and Ukraine that has been provisionally applied since 1 January 2016. By 2020, the EU had become Ukraine’s most important export market and principal source of imports, dwarfing Ukraine’s second partner – China – and placing Russia a distant third. Since the Russian Federation launched its military invasion of Ukraine on 24 February 2022, EU-Ukraine trade and investment relations have started to experience constraints, with some European (car) manufacturers reporting disturbances and temporarily halting production due to a lack of Ukrainian components. Ukraine’s future trade prospects will depend not only on its trade partners, but also on rebuilding the physical damage the country has suffered, and on the status of its ports
Awturi : Lorenz KRAMER, WOLFGANG IGLER

Values on the retreat? The role of values in the EU’s external policies EN

Studju
Sommarju : There is a general perception in Western countries that the role of values as a foreign policy driver is currently on the decline. This study in the series ‘global trends in external policies’ seeks to contribute to the debate by investigating what is meant by ‘values’, whether their importance is on the wane and, if so, how this manifests itself, and how the European Union (EU) can respond to these trends. The broad concept of values has therefore been split into five categories. Socio-cultural values are implicit drivers of foreign policy. In the case of the EU, these are characterised by diversity. ‘Political values’ is used as a term to describe the fundamental principles of political and public action, defining the relationship between the state and its citizens. For the EU, these are often referred to as the triad of human rights, democracy and the rule of law. Economic values characterise the nature of the prevailing economic system in a country. The EU advocates a social market economy. The term ‘Earth values’ refers to the inclusion of environmental considerations in external policies. The EU has become a leader in promoting sustainability. Resulting from the preceding four are ‘international order values’, which characterise the overall international outlook of actors. The EU’s international order value is ‘principled pragmatism’. This study compares the EU’s values with those of four reference countries: the US, Turkey, Russia and China. The US in the West comes closest to many of the EU’s values, but does not overlap completely. Turkey and Russia are in the EU’s Eastern neighbourhood and increasingly disagree with the EU on values. Chinese values overlap least with the EU’s values. The study confirms a decline in the influence of the political values preferred by the EU. This decline appears to correspond to a clear West-East spectrum. However, the study also notes an opposite trend of increasing influence of Earth values. For these, a Eurocentric spectrum appears more adequate. For economic values, the definition of trends depends on benchmarks and methodology. The international order notion of ‘principled pragmatism’ has been extended to ‘EU strategic autonomy’. Values are often considered as part of EU strategic autonomy and some policies, such as EU accession or trade policy, incorporate them. A values-based approach to external policies should differentiate according to the partner country and the value category concerned. Whereas cooperation on political values does not appear to be fruitful with certain countries, continued efforts on economic or Earth values may still be possible. The study explores what such a differentiated approach could mean for the four reference countries in the near future. Such an approach should also take into account the differing perceptions of partner countries. Although positive avenues of cooperation on, for example, Earth values are still possible, geopolitical tensions, partly rooted in differing values, are overshadowing this path.
Awturi : Mario DAMEN

Policy Departments’ Monthly Highlights - January 2022 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

Trade aspects of the EU-Mercosur Association Agreement EN

30-11-2021 PE 653.650 INTA
Studju
Sommarju : In this study we analyse the provisions of the EU-Mercosur trade agreement (EUMETA) in its form presented by the European Commission. Our analysis covers the potential macroeconomic effects of the agreement that are based on the analysis of the extent of trade liberalisation through the lens of a computable general simulation model, as well as more detailed analysis of trade structure, tariff structure, non-tariff protection and the trade-related provisions of the agreement including trade in services and government procurement. Moreover, we analyse the institutional provisions of the EU-Mercosur Association agreement (EUMEAA) in relation to the positioning of the European Parliament and civil society. We place a special focus on the agri-food sector and some selected sensitive subsectors. The quantitative assessments are amended by qualitative analysis, in particular with regard to the trade and sustainable development chapter of the agreement, issues related to food security and an overview of existing approaches on sustainable development in the Mercosur countries.
Awturi : Jan Hagemejer, Andreas Maurer, Bettina Rudloff, Peter-Tobias Stoll, Stephen Woolcock, Andréia Costa Vieira, Kristina Mensah, Katarzyna Sidło

Policy Departments’ Monthly Highlights - November 2021 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

Foreign subsidies and public procurement EN

30-09-2021 PE 653.648 INTA
Analiżi fil-Fond
Sommarju : The EU has helped shape an international economic system based on openness and fair competition. Over the past few years, the benefits of this approach have come under pressure from foreign trade practices which undermine the principle of recip¬rocal treatment. In particular, this is the case with subsidies granted by non-EU governments and protected public procurement markets. This in-depth analysis reviews the state of play of EU policy action on foreign subsidies and in public pro¬curement markets and identifies gaps in existing EU instruments. The analysis shows that the EU took the initiative with: (i) the completed FDI screening and trade defence reforms; (ii) the proposal for an International Procurement Instrument; and (iii) the proposal for a Regulation targeting the distortive effects of foreign subsidies. In addi¬tion, the EU is taking the lead at the multilateral level, promoting coordinated action in the WTO, G7, G20, OECD, and GAMS fora.
Awturi : Michael BÖHEIM, Nazareno BRAITO, Davide CECCANTI, Davide FINA, Duy HUYNH-OLESEN, Cécile JACOB, Katarína KUBOVICOVÁ

EU-India trade relations: assessment and perspectives EN

06-09-2021 PE 653.646 INTA
Analiżi fil-Fond
Sommarju : Following the EU-India summit in May 2021, talks on both an EU-India trade and an investment agreement have resumed. This analysis provides background on where EU-India economic relations stand and why it is important to maintain momentum following this breakthrough, despite a somewhat unpromising domestic political environment in India. This new impetus largely reflects a transformed geopolitical landscape since the last round of EU-India talks were abandoned in 2013. The increased tension between India and China, as well as the EU’s intent to reduce its reliance on Chinese manufacturing have created the conditions for changes in policy by both parties. However, many of the issues that bedeviled the 2007-2013 negotiations remain unresolved. In this analysis, we provide an overview of EU-India trade and investment relations as well as the major topics in these negotiations. The impact of key global initiatives on climate change and WTO reform that will shape the negotiations is also briefly discussed. Based on this analysis, we discuss three potential ways forward for EU-India trade and investment negotiations: a comprehensive agreement similar to that reached between the EU and Vietnam; a limited investment deal primarily focused on manufacturing; and a reinforced status quo with trade and investment relations growing organically under the existing multilateral umbrella.
Awturi : Niclas Poitiers, Suman Bery, Sonali Chowdhry, Alicia García-Herrero

Tackling distortions of foreign subsidies EN

19-07-2021 PE 694.218 INTA
Briefing
Sommarju : The IA underpinning the proposal to tackle foreign subsidies is based on solid internal and external research, which compensates an admitted lack of data. It is transparent about methods, underlying assumptions and certain limitations. The intervention logic of the IA is clear, even if the complex set-up of the policy options and their assessment could have been more structured and coherent. The IA does not present operational objectives and few, yet pertinent, monitoring provisions. While the mostly qualitative assessment is thorough and contains selective quantitative information, total cost and benefits could not be estimated. Potential negative effects in case of a significant drop of foreign investments, for instance on employment or prices, could have been addressed in more detail.
Awturi : Esther KRAMER

The EU-Turkey Customs Union and trade relations: what options for the future? EN

07-07-2021 PE 653.640 INTA
Analiżi fil-Fond
Sommarju : This in-depth analysis summarizes the main effects of the Customs Union (CU) on EU-Turkey trade and the economic situation in Turkey. Whereas the CU offers Turkey several economic benefits, it also implies some downsides, in particular asymmetric tariffs in relation to third countries. Against the background of the dynamic development of EU-Turkey relations, the authors assess the impact of four different options for developing EU-Turkey economic and trade relations: (i) Continuation of the current Customs Union framework as it stands, (ii) Modernization and upgrading of the Customs Union, (iii) A transformation of the bilateral trade relations into a deep and comprehensive free trade agreement (DCFTA), (iv) Suspension of the Customs Union (in which case WTO rules would apply). The in-depth-analysis describes the options, the challenges the EU-Turkey Customs Union faces and seeks solutions for these issues.
Awturi : Erdal YALCIN; Gabriel FELBERMAYR

Policy Departments’ Monthly Highlights - April 2021 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

EU Trade Policy: how can FTAs better deliver for SMEs? EN

08-03-2021 PE 653.627 INTA
Briefing
Sommarju : These briefings discuss how free trade agreements (FTAs) can help small and medium-sized enterprises (SMEs). It provides an overview of FTAs with provisions supporting SMEs internationalise. Based on a literature review, we also discuss the main challenges and concerns for SMEs doing business in third countries. First, we show the current situation of European SMEs with respect to internationalisation and highlight the corresponding benefits. Following previous literature on the topic, we distinguish between SMEs without international operations and SMEs that are already internationalised and discuss how different barriers can affect them. Finally, the last section discusses initiatives at the EU and national level to support SMEs and concludes with a set of recommendations how to better support them.
Awturi : Thibo CLICTEUR, Frauke DE TEMMERMAN, Duy HUYNH-OLESEN, Katrien NUYTS, Nazareno BRAITO, Davide CECCANTI

Benefits of EU trade agreements for small and medium-sized enterprises (SMEs) EN

08-03-2021 PE 653.628 INTA
Briefing
Sommarju : This briefing discusses how free trade agreements (FTAs) can help small- and medium-sized enterprises (SMEs). It provides an overview of the FTAs that the EU has concluded, along with a classification and a discussion of key provisions on and for SMEs. Several pioneering agreements are studied more closely, including the EU-Japan, EU-Canada, EU-Mercosur and EU-UK agreements. To conclude, the briefing assesses SME awareness of FTA chapters and analyses the related benefits.
Awturi : Thibo CLICTEUR, Frauke DE TEMMERMAN, Duy HUYNH-OLESEN, Katrien NUYTS

Challenges and concerns for small and medium-sized enterprises (SMEs) doing business in third countries EN

08-03-2021 PE 653.629 INTA
Briefing
Sommarju : This briefing discusses the main challenges and concerns for SMEs doing business in third countries. First, we show the current situation of European SMEs with respect to internationalisation and highlight the corresponding benefits. Second, based on previous literature on the topic, we distinguish between SMEs without international operations and SMEs that are already internationalised and discuss how different barriers can affect them.
Awturi : Nazareno BRAITO, Davide CECCANTI, Duy HUYNH-OLESEN

EU actions to overcome challenges of small and medium-sized enterprises (SMEs) EN

08-03-2021 PE 653.630 INTA
Briefing
Sommarju : This briefing discusses the actions that the EU could take to properly tackle the challenges that SMEs are currently facing. Several initiatives have already been launched, such as the EU Helpdesk, the Access2Markets Platform and the CTEO. The pros and cons of these initiatives are outlined, and examples and a general assessment are provided. In a second step, several actions of Member States and commerce organisations are highlighted and a detailed classification provided. In a final step, recommendations are formulated for helping the EU to overcome the challenges and concerns of SMEs, to support and improve day-to-day business activities, and facilitate internationalisation.
Awturi : Nazareno BRAITO, Davide CECCANTI , Frauke DE TEMMERMAN, Duy HUYNH-OLESEN

Post Covid-19 value chains: options for reshoring production back to Europe in a globalised economy EN

19-02-2021 PE 653.626 INTA
Studju
Sommarju : Against the background of supply shortages with respect to medical products during the COVID-19 pandemic, and the shift in the international order towards geopolitical rivalry between the US and China, reshoring of production has become a topical issue in the recent EU policy debate. The study discusses economic and political justifications for reshoring with respect to security of supply concerns and the debate on the EU’s strategic autonomy. With reshoring pre-COVID-19 having remained an empirical phenomenon of limited significance, potential for reshoring at the sector and GVC level are assessed in light of recent economic changes, the digital transformation and the changing geopolitical environment. Though reinforced in the recent past, the success of reshoring policies of the US, the UK and Japan is found to have been modest. While a more proactive policy approach to mitigate security of supply concerns and to promote strategic autonomy in the EU is important, reshoring should be primarily focused on specific critical sectors and products with pronounced supply bottlenecks.
Awturi : Werner Raza, Jan Grumiller, Hannes Grohs, Jürgen Essletzbichler, Nico Pintar

Short overview of the Regional Comprehensive Economic Partnership (RCEP) EN

10-02-2021 PE 653.625 INTA
Briefing
Sommarju : 15 countries signed the Regional Comprehensive Economic Partnership (RCEP) on 15 November 2020. Upon ratification, it will become the largest preferential trade agreement by economic output in the world, with the potential to increase trade and integration among the economies of East Asia. This briefing presents the structure and the content of the agreement, its relationship to existing cooperation in the region, and discusses important economic and political implications. Several notable takeaways stand out. First, we highlight the economic and political significance of RCEP for the region stressing that it is the culmination of past efforts by East Asian countries to pursue economic integration. Second, we show that the agreement itself is considerably less ambitious than comparable agreements such as the Comprehensive and Progressive Transpacific Partnership (CPTPP) and European Union Free Trade Agreements with Asian countries. Third, we document that the final legal text itself does not seem to be dominated by any specific party. Fourth, despite its lack of ambition, the agreement is still expected to provide substantial trade gains for signatories, especially if it helps to consolidate global supply chains based in the region. Fifth, because of its structure, it is likely to be an important focal point for trade liberalization in the future providing European companies with important opportunities.
Awturi : Joseph FRANCOIS, Manfred ELSIG

Policy Departments’ Monthly Highlights - December 2020 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events. regional development, cohesion policy, COVID19, WTO, budget control, budget, economy, international affairs, international law, Schengen governance, single market, European court of Auditors, energy.

Extraterritorial sanctions on trade and investments and European responses EN

20-11-2020 PE 653.618 INTA
Studju
Sommarju : Recent US measures directed against Iran, Cuba and Russia (North Stream 2) have become indirectly a critical challenge for the European Union as well. As they purport to deter economic actors under EU jurisdiction from engaging with target countries, they have an important extraterritorial dimension, which affects EU business and individuals and ultimately the sovereignty of the EU and its Member States. A review of the existing sanction regimes and of the geopolitical context reveals that other international players and the PR China in particular may follow suit in using such measures. The study shows that extraterritorial sanctions have important economic implications, particularly for the EU and its vulnerabilities. Extraterritorial sanctions also raise critical questions as to their legality under general international law, WTO law and other specific international rules. The EU is especially affected by these measures and has taken some measures already in response. These could be improved and additional measures could be taken, as the policy recommendations set out.
Awturi : Tobias STOLL, Steven BLOCKMANS, Jan HAGEMEJER, Christopher A. HARTWELL, Henner GÖTT, Kateryna KARUNSKA, Andreas MAURER

Socio-economic effects of digital trade and artificial intelligence on EU industries including their value chains and EU imports and exports with major trade partners EN

11-11-2020 PE 603.516 INTA
Briefing
Sommarju : Artificial intelligence and new digital technologies are transforming digital trade. They facilitate the development of new business models of trade and reduce the geographical barriers of economic transactions. Such transformations are quite useful for the small and medium enterprises. Artificial intelligence is being adopted by both digital and non-digital sectors, but its adoption varies a great deal across countries, including within the EU. Data and information flow play a crucial role in digital trade by allowing personalization. Digital trade is not new, but it is taking new forms that are ushering a new phase of globalisation. So far digital trade mainly affected trade in goods, including through global value chains, though some service activities have already become more tradeable thanks to digital technologies. The new phase of globalisation driven by artificial intelligence and new digital technologies is likely to do for services what the previous phase did for manufacturing: to vastly increase trade between advanced and emerging economies. This prospect raises important issues for domestic policies and trade policy.
Awturi : Georgios PETROPOULOS, André SAPIR, Michele FINK, Niclas Frederic POITIERS, Dennis GÖRLICH.

Legal Analysis of International Trade Law and Digital Trade EN

11-11-2020 PE 603.517 INTA
Briefing
Sommarju : This brief provides a legal analysis of existing rules in digital trade regarding the various components of artificial intelligence (‘AI’), in particular (personal and nonpersonal) data, computer code in the form of algorithms, and computing power (including cloud computing). To do so, the first part of this analysis will map various international trade rules that affect cross-border flows of data, computer code and computing power to determine their respective advantages and disadvantages. This will form the basis for the second part of the analysis, which will address the desirability and necessity of global rulemaking in this area.
Awturi : Georgios PETROPOULOS, André SAPIR, Michele FINK, Niclas Frederic POITIERS, Dennis GÖRLICH

Geopolitical Aspects of Digital Trade EN

11-11-2020 PE 653.616 INTA
Analiżi fil-Fond
Sommarju : This in-depth analysis discusses issues in trade in digitally deliverable services and the geopolitics of digital trade policy. Digitally deliverable services are becoming increasingly important for global value chains, both in terms of final products exported to other countries, and in terms of inputs embedded in manufactured goods. To harness the potential of digital trade in services, both the regulation of the digital means by which a service is traded and the regulation of the services themselves have to be accommodative. Digital trade policy is still in its infancy, and many challenges in terms of policy and measurement remain. Looking at regulation of data flows, the EU’s focus on privacy policy is incompatible with the laissez-faire approach pursued by the US administration and the political control of the internet by the Chinese government, limiting the potential for trade in digitally deliverable services and plurilateral agreements on digital trade. However, a number of other major economies are following similar approaches to the EU, which creates the potential for cooperation and intensifying trade in digital services. The EU should also increase its competitiveness in this strategically important services sector by completing the single market with respect to services and capital, and by strengthening research and development in digital technologies.
Awturi : Georgios PETROPOULOS, André SAPIR, Michele FINK, Niclas Frederic POITIERS, Dennis GÖRLICH

Data flows, artificial intelligence and international trade: impacts and prospects for the value chains of the future EN

11-11-2020 PE 653.617 INTA
Analiżi fil-Fond
Sommarju : Socio-economic effects of digital trade and artificial intelligence on EU industries Artificial intelligence and new digital technologies are transforming digital trade. They facilitate the development of new business models of trade and reduce the geographical barriers of economic transactions. Such transformations are quite useful for the small and medium enterprises. Artificial intelligence is being adopted by both digital and non-digital sectors, but its adoption varies a great deal across countries, including within the EU. Data and information flow play a crucial role in digital trade by allowing personalization. Digital trade is not new, but it is taking new forms that are ushering a new phase of globalisation. So far digital trade mainly affected trade in goods, including through global value chains, though some service activities have already become more tradeable thanks to digital technologies. The new phase of globalisation driven by artificial intelligence and new digital technologies is likely to do for services what the previous phase did for manufacturing: to vastly increase trade between advanced and emerging economies. This prospect raises important issues for domestic policies and trade policy. Legal Analysis of International Trade Law and Digital Trade This brief provides a legal analysis of existing rules in digital trade regarding the various components of artificial intelligence (‘AI’), in particular (personal and non-personal) data, computer code in the form of algorithms, and computing power (including cloud computing). To do so, the first part of this analysis will map various international trade rules that affect cross-border flows of data, computer code and computing power to determine their respective advantages and disadvantages. This will form the basis for the second part of the analysis, which will address the desirability and necessity of global rulemaking in this area. Geopolitical Aspects of Digital Trade This in-depth analysis discusses issues in trade in digitally deliverable services and the geopolitics of digital trade policy. Digitally deliverable services are becoming increasingly important for global value chains, both in terms of final products exported to other countries, and in terms of inputs embedded in manufactured goods. To harness the potential of digital trade in services, both the regulation of the digital means by which a service is traded and the regulation of the services themselves have to be accommodative. Digital trade policy is still in its infancy, and many challenges in terms of policy and measurement remain. Looking at regulation of data flows, the EU’s focus on privacy policy is incompatible with the laissez-faire approach pursued by the US administration and the political control of the internet by the Chinese government, limiting the potential for trade in digitally deliverable services and plurilateral agreements on digital trade. However, a number of other major economies are following similar approaches to the EU, which creates the potential for cooperation and intensifying trade in digital services. The EU should also increase its competitiveness in this strategically important services sector by completing the single market with respect to services and capital, and by strengthening research and development in digital technologies.
Awturi : Georgios PETROPOULOS, André SAPIR, Michele FINK, Niclas Frederic POITIERS, Dennis GÖRLICH

How can international trade contribute to sustainable forestry and the preservation of the world’s forests through the Green Deal? EN

19-10-2020 PE 603.513 INTA
Analiżi fil-Fond
Sommarju : High deforestation rates, particularly in tropical areas, remain a pressing concern for the international community, given their impacts on the global climate and the loss of biodiversity. The EU has committed to promoting sustainable forest management both domestically and internationally. However, efforts so far have concentrated on promoting the legality of trade in timber and timber products, via policy instruments such as FLEGT and the EU Timber Regulation. EU trade policy could be employed more systematically to promote sustainable forestry and deforestation-free value chains. The report proposes eleven measures to this end, both at the unilateral, bilateral and multilateral level, that inter alia combine market access incentives on the part of consumer markets such as the EU with obligations to promote principles of sustainable production on the part of producer countries.
Awturi : Werner RAZA, Bernhard TRÖSTER, Bernhard WOLFSLEHNER, Markus KRAJEWSKI.

Commitments made at the hearings of the Commissioners-designate - von der Leyen Commission 2019-2024 EN

Mad-Daqqa t'Għajn
Sommarju : This document provides links to all Briefings produced by the Policy Departments of the Directorate-General for Internal Policies and of the Directorate-General for External Policies of the European Parliament, with salient points and essential commitments made by the Vice-Presidents and Commissioners-designates at their respective hearings before the European Parliament, in September-November 2019 and in October 2020. For an exhaustive list of all commitments made and positions taken by the candidates, the full verbatim report of each public hearing is available on the dedicated hearings website of the European Parliament, as are the written questions and answers.

Commitments made at the hearing of Valdis Dombrovskis Commissioner for Trade EN

Briefing
Sommarju : The Commission Executive Vice-President/Commissioner-designate, Valdis Dombrovskis, appeared before the European Parliament on 02 October 2020 to answer questions put by MEPs from the Committee on International Trade, in association with the Committees on Foreign Affairs, on Economic and Monetary Affairs, on Development and on Budgets. During the hearing, he made a number of commitments which are highlighted in this document. These commitments refer to his portfolio as Trade Commissioner, as described in the mission letter sent to him by Ursula von der Leyen, President-elect of the European Commission, including: - A level playing field for all; - Strengthening Europe’s global leadership; - Trade for sustainable development and climate action
Awturi : Mario DAMEN, WOLFGANG IGLER

Policy Departments' Monthly Highlights - June 2020 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

EU-China trade and investment relations in challenging times EN

25-05-2020 PE 603.492 INTA
Studju
Sommarju : This report examines key aspects of the European Union-China economic relationship, including trade, investment and China’s key strategic project overseas, the Belt and Road Initiative (BRI). We conclude that China is, and will continue to be, a major trade and investment partner for EU countries. In this context, it seems clear that regardless of the direction of the United States-China relationship, the EU needs to explore options for fruitful co-existence with China. Trade continues to be the least problematic aspect of the EU-China economic relationship, although challenges need to be dealt with in a number of areas. There is hardly any EU-China trade in services, and the value added of Chinese exports and competition on third markets is increasing. As for investment, although EU companies have built up more foreign direct investment in China than the other way around, Chinese investment in Europe is growing and has focused strongly on technology. This raises the question of whether the EU should fear losing its technological edge, especially when Chinese state-owned companies might distort competition, not only in China, but also overseas through acquisitions. Finally, we review the significance of the BRI from the European perspective. The BRI offers potential trade gains for Europe by improving physical connectivity with countries along the route to China, but it also poses challenges for the EU. The main challenge is China’s increasing soft power, which is being felt in the EU’s neighbourhood and even in a growing number of EU countries. A more united approach to managing the EU-China economic relationship is required to improve the bargaining power of EU countries when dealing with China.
Awturi : Alicia GARCIA-HERRERO, Guntram WOLFF, Jianwei XU, Nicolas POITIERS, Gabriel FELBERMAYR, Rolf LANGHAMMER, Wan-Hsin LIU, Alexander SANDKAMP

Four briefings on Trade-related aspects of carbon border adjustment mechanisms EN

14-04-2020 PE 603.493 INTA
Briefing
Sommarju : Compilation of four briefings made up by European Parliament's external contractors to the attention of INTA Committee, on trade-related aspects of carbon border adjustment mechanisms.
Awturi : Dr. Cecilia Bellora and Prof. Lionel Fontagné, Centre d'Etudes Prospectives et d'Informations Internationales (CEPII) ; Prof. Gabriel Felbermayr and Prof. Sonja Peterson, Kiel Institute for the World Economy (IfW Kiel); Prof. Joost Pauwelyn, The Graduate Institute of International and Development Studies (IHEID) and Georgetown University Law School and Dr. David Kleimann, Johns Hopkins School of Advanced International Studies; Prof. André Sapir and Prof. Henrik Horn, Bruegel.

Possible carbon adjustment policies: An overview EN

14-04-2020 PE 603.500 INTA
Briefing
Sommarju : The new European Commission has announced policies to reduce greenhouse gas emissions drastically. Reaching an ambitious target for a global good – the climate – would require a common price for carbon worldwide. This however clashes with the free-riding problem. Furthermore, unilateral policies are not efficient since they lead to carbon leakages and distort competitiveness. To tackle these issues, the European Union can rely on different policies. Firstly, a carbon pricing of imports can combined with an export rebate to constitute a ‘complete CBA’ (Carbon Border Adjustment) solution. Alternatively, a simple tariff at the border can compensate for differences in carbon prices between domestic and imported products. A consumption-based carbon taxation can also be contemplated. Last, a uniform tariff on imports from countries not imposing (equivalent) carbon policies may help solving the free-riding problem.
Awturi : Dr. Cecilia Bellora and Prof. Lionel Fontagné, Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)

Economic assessment of Carbon Leakage and Carbon Border Adjustment EN

14-04-2020 PE 603.501 INTA
Briefing
Sommarju : The European Union is the world’s largest importer of virtual CO2-emissions: its net imports of goods and services contain more than 700 million tons of CO2 emitted outside of the EU’s territory. This is more than 20 % of the EU’s own territorial CO2 emissions. Therefore, shifting carbon pricing away from pricing the EU’s territorial emissions to pricing the EU’s CO2-footprint (by means of carbon border adjustment) enhances the reach of European climate policy activities and increases their effectiveness for promoting global abatement activities. The above result relies only on the EU being a net importer of CO2 emissions embodied in international trade. It does not rely on the answer to the question, whether stronger unilateral CO2 mitigation efforts in the EU cause the imports of embodied carbon to increase (direct carbon leakage). Direct carbon leakage refers to the possibility that stringent unilateral CO2 policies in the EU, e.g. in the form of high carbon prices or regulatory measures, might lead to an increase in the carbon imports embodied in trade of goods and services: as European firms’ relative production costs are driven up relative to firms in non-committed foreign countries, domestic production is replaced by imports and domestic emissions are replaced by foreign ones. This compromises the effectiveness of the EU’s climate policies and endangers jobs and value added in exposed sectors. Ex post evaluations of existing carbon policies arrive at mixed conclusions. On the one hand, emission pricing in the EU ETS, so far, is mostly not found to cause direct carbon leakage. On the other hand, studies based on a broader focus of climate policies (not just carbon prices) suggest that measures, e.g., in the context of the Kyoto Protocol, have indeed led to carbon leakage. In countries that have committed to emission targets, imports of goods have gone up by about 5 % and the carbon-intensity of imports has gone up by 8 %. Ex-ante predictions by simulation models indicate that direct leakage is indeed likely. Its size depends on the difference between the EU’s carbon prices and those of its trading partners. On average, studies indicate that about 15 % of domestic emission savings are offset by additional foreign emissions. However, the range of estimates is very large. In most studies, indirect carbon leakage that operates through global markets for fossil fuels, however, is quantitatively more important than direct carbon leakage operating through international markets for goods and services. Ex-ante models show that carbon border adjustment can reduce carbon leakage. In complete setups, it can fully eliminate direct leakage. It does little to reduce leakage through energy markets, or to incentivise countries to engage into more ambitious climate policies. Results depend crucially on the design of the mechanism. Moreover, simulations also show that the adjustment burden is shifted to non-abating countries, many of which are poor and underdeveloped. The note concludes that carbon leakage is an empirically relevant concern. Carbon border adjustments (CBAs) can lower carbon leakage occurring through goods markets. CBAs need to be treated very carefully because they might provoke retaliation by non-committed countries and because they may shift the burden of adjustment to poor countries. In the context of the EU ETS, one promising strategy could be to grant free allocations of emission permits to leakage-prone industries but combine this with a consumption tax, applied to domestic and foreign goods produced by those exempted industries.
Awturi : Prof. Gabriel Felbermayr and Prof. Sonja Peterson, Kiel Institute for the World Economy (IfW Kiel)

Trade Related Aspects of a Carbon Border Adjustment Mechanism. A Legal Assessment EN

14-04-2020 PE 603.502 INTA
Briefing
Sommarju : This briefing provides a legal assessment – under WTO and EU law - of three policy options for an EU carbon border adjustment mechanism. These options are, first, a carbon tax adjusted at the border; second, the inclusion of importers under the EU emission trading scheme; and, third, import tariffs on products from third countries that do not pursue climate policies in line with the Paris Agreement. In the first part of the briefing, these three policies are evaluated against the benchmark of vulnerability to WTO legal challenge. The second part of the briefing assesses the EU decision-making procedures that are applicable to the three policies and the varying degrees of efficiency and democratic participation they imply.
Awturi : Prof. Joost Pauwelyn, The Graduate Institute of International and Development Studies (IHEID) and Georgetown University Law School and Dr. David Kleimann, Johns Hopkins School of Advanced International Studies

Political Assessment of Possible Reactions of EU Main Trading Partners to EU Border Carbon Measures EN

14-04-2020 PE 603.503 INTA
Briefing
Sommarju : This briefing discusses the possible reactions of the European Union’s larger trading partners to carbon border measures. Section 1 discusses experiences of carbon border adjustment-like regimes prior to the European Commission’s announcement of the Green Deal. It focuses on the EU Aviation Directive, the US policy debate, and the Californian CBA for electricity. Section 2 considers reactions to the Green Deal announcement, based on informal discussion with officials from major trading partners to the EU. It identifies positive and negative reactions to the principle of an EU CBA, concerns about its design, criticisms and potential policy responses by these partners. Section 3 discusses the implications of our findings. It points to several features in the design and introduction of an EU CBA mechanism that we believe will importantly affect how partners will react to such mechanism.
Awturi : Prof. André Sapir and Prof. Henrik Horn, Bruegel

Balancing Integration and Autonomy. How EFTA countries reconcile EU-approximation and independence EN

27-02-2020 PE 639.315 INTA
Studju
Sommarju : In 2020, the European Free Trade Association (EFTA) celebrates its 60th anniversary. During this respectable lifetime, its composition has frequently changed, starting with seven founding members in 1960 and having four today. EFTA has turned out to be an ‘antechamber’ for the EU, as well as a distinct organisation with its own purpose. Since the foundation of the European Economic Area (EEA) in 1992, EFTA states Norway, Iceland and Liechtenstein have joined this area, whereas Switzerland has chosen a relationship with the EU based on a number of bilateral agreements. These four EFTA states have in common that they perform a delicate and dynamic balancing act between integration into the EU and preservation of their own autonomy. Reasons for the strong desire for autonomy can partly be found in geographic or historic factors, but these cannot explain their position entirely, as existing EU Member States may also have such particularities. That all EFTA countries have a strong economy based on specific sets of natural resources and/or financial legislation, certainly is another element that explains the desire to keep matters in their own hands as far as possible. Strong consensus oriented democratic systems with components of direct democracy complete the picture. External events, such as the creation of the Internal Market, EU enlargement or the 2008 financial crisis have regularly challenged the balance EFTA countries have built with the EU. Even though they have led to initiatives to integrate closer with the EU or apply for membership, in the end such steps have not been completed. Whereas the UK is an important partner of all EFTA countries, mostly of Norway, its withdrawal from the EU has created another challenge to the balance. In a larger perspective, balancing autonomy and integration is not unique to EFTA countries, but happens also within the EU in the form of opt outs or arrangements for enhanced cooperation. And in view of a large number of countries aspiring for future EU membership, concepts such as flexible arrangements or associate memberships are not likely to disappear from the EU agenda.
Awturi : Mario DAMEN

Policy Departments' Monthly Highlights - December 2019 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

Policy Departments' Monthly Highlights - November 2019 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.
Sommarju : Dan id-dokument huwa kumpilazzjoni ta' punti importanti u impenji essenzjali li saru mill-Viċi Presidenti u l-Kummissarji nnominati fis-seduti ta' smigħ rispettivi tagħhom quddiem il-Parlament Ewropew. Huwa maħsub biex jipprovdilek għodda prattika u konċiża sabiex issegwi l-isforzi u l-azzjonijiet tal-Kummissjoni futura. Għal lista eżawrjenti tal-impenji kollha li saru u tal-pożizzjonijiet li ttieħdu mill-kandidati, ir-rapport verbatim kollu ta' kull seduta ta' smigħ pubbliku huwa disponibbli fuq is-sit web iddedikat għas-seduti ta' smigħ 2019 tal-Parlament Ewropew, bħalma huma disponibbli l-mistoqsijiet u t-tweġibiet bil-miktub. Dan id-dokument jinkludi addendum li fih l-impenji li saru waqt is-seduti ta' smigħ ta' Ottubru 2020.

Commitments made at the hearing of Phil HOGAN, Commissioner-designate - Trade EN

22-11-2019 PE 639.308 INTA
Briefing
Sommarju : The Commissioner-designate, Phil Hogan, appeared before the European Parliament on 30 September 2019 to answer questions from MEPs in the Committee on International Trade (INTA). During the hearing, he made a number of commitments which are highlighted in this document. These commitments refer to his portfolio, as described in the mission letter sent to him by Ursula von der Leyen, President-elect of the European Commission, including: - A level playing field for all; - Strengthening Europe’s global leadership; - Trade for sustainable development and climate action; and - Making trade more transparent.
Awturi : Mario DAMEN, WOLFGANG IGLER

The Mekong River: geopolitics over development, hydropower and the environment EN

Studju
Sommarju : The Mekong River is a vital source of livelihoods and economic activity in continental South-East Asia and extends from the Tibetan Plateau to the South China Sea. Its length is 4 800 km. More than half circulates in China, but its channel runs through Myanmar, Laos, Cambodia, Thailand and Vietnam. The Mekong has the world's largest inland freshwater fishery industry, vital to the region's food security, representing around USD 3 000 million per year. Its unique and rich biological habitat provides diverse livelihoods as well as four fifths of the animal protein for more than 60 million people. At the level of biodiversity, the importance of this river for global nature is vital. The Mekong region is extremely vulnerable to the impacts of climate change and to the degradation of ecosystems. The uncontrolled growth of the population both in China and in Southeast Asia is exerting unsustainable pressure on the Mekong in terms of a massive exploitation of all kinds of resources linked to the River: water, food, wood, energy, especially recent infrastructure and hydropower development, together with deforestation, illegal wildlife trade and habitat fragmentation. Water scarcity leads to reduced agricultural productivity, unemployment and poverty Four countries (Cambodia, Lao PDR, Thailand, and Vietnam) formed an intergovernmental agency in 1950, The Mekong River Commission (MRC), to defend the sustainable development of the Mekong River and to plan its future. The absence of China and Myanmar mitigates and erodes the effective dialogue of the MRC on the management of the River. The lack of implementing mechanisms denatures the organization itself..
Awturi : Jorge SOUTULLO SANCHEZ

Diversifying unity. How Eastern Partnership countries develop their economy, governance and identity in a geopolitical context EN

30-10-2019 PE 639.307 INTA
Studju
Sommarju : This study analyses the Eastern Partnership (EaP) in the year of its 10th anniversary. The Eastern Partnership was set up in 2009 as a joint policy initiative aiming at deepening and strengthening relations between the European Union, its Member States and the six EaP countries of Belarus, Ukraine, Moldova, Georgia, Armenia and Azerbaijan. While each of these countries shares a past in the former Soviet Union, they have developed over time in different directions. Ukraine, Moldova and Georgia have concluded Association Agreements with the EU, which include Deep and Comprehensive Free Trade Areas. They will have to fulfil conditions laid down in the Association Agreements to make progress on reforms of governance, the judiciary and fighting corruption. Moreover, Georgia and Ukraine are seeking to integrate more deeply into the Western world order, aspiring to membership of NATO and the EU. Armenia and Azerbaijan have different ways of cooperating with the EU. Belarus is furthest from the EU because of its poor record on democracy and human rights. All six countries are to a certain extent within Russia’s sphere of influence and have to deal with several geopolitical constraints, but they have increasingly developed economic relations and national identities of their own. It will be a challenge to maintain a common perspective for the next 10 years of the Eastern Partnership and a further divergence between the countries is likely. This will not only be between countries with an Association Agreement and the others, but along multiple vectors. While further developing statehood, the eastern partners will want to decide increasingly for themselves which forms of cooperation they want to pursue in the future. They may choose international partners according to their perceived needs, including Russia, the US, China or Turkey. The EU for its part should continue to pursue its strengths of assisting in achieving better governance and democracy and strengthening economic ties, while contributing to diminishing geopolitical tensions.
Awturi : Mario DAMEN

Policy Departments' Monthly Highlights - October 2019 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

Free trade or geo-economics? Trends in world trade EN

27-09-2019 PE 639.306 INTA
Analiżi fil-Fond
Sommarju : The European Union (EU) is the biggest integrated economic zone and a guarantor of an open and predictable regulatory system able to determine its own economic destiny. But the behaviour of other global powers is increasingly calling this ability into question. China and the United States, especially, do not separate economic interests from geopolitical interests in the same way the EU does and are increasingly trying to gain geopolitical advantage using their economic might. The EU is known as a fierce defender of a multilateral rules - based trade system with free but fair trade as its strategic policy objective. The EU will therefore do its utmost to save a ‘meaningful multilateralism’ by helping to reform the WTO, improve multilateral investment protection and conclude multilateral trade agreements. At the same time, the EU will defend its own interests by negotiating bilateral trade deals and applying trade defence and investment screening where needed. The EU has a strong interest in keeping the use of geo-economic measures manageable and avoid escalation into a trade war.
Awturi : Mario DAMEN, WOLFGANG IGLER

Policy Departments' Monthly Highlights - September 2019 EN

Mad-Daqqa t'Għajn
Sommarju : The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.