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Trade preferences boost developing countries’ exports to the European Union

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Exports to the European Union from developing countries using special tariff preferences under the EU’s Generalised Scheme of Preferences (GSP) reached a new high of €69 billion in 2018. According to the European Commission’s report published every two years on the GSP, released today, exports to the EU from the 71 GSP beneficiary countries increased to almost €184 billion. Nearly €69 billion of these used GSP special preferences.

High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission Josep Borrell said:  “Trade is one of the crucial tools the EU has at hand to address, support and improve human rights, labour rights and good governance, which are pillars of sustainable development, around the world. Through the EU’s Generalised Scheme of Preferences, we support developing countries to grow and advance in a sustainable way, not least when it comes to climate action. Our preferential trade tariffs help to take thousands out of poverty, to reduce inequalities, and to bring economic growth.

Commissioner for Trade Phil Hogan said: “Thanks to our trade preferences, the EU imports twice as much from least developed countries as the rest of the world does. This trademark tool of the EU’s trade policy underpins millions of jobs in the world’s poorest countries and acts as an incentive to countries to implement international conventions on human rights, labour rights, good governance and the environment.

The Generalised Scheme of Preferences removes import duties on developing countries’ exports to the EU.  By creating additional export opportunities, it helps the countries to tackle poverty and create jobs while also respecting sustainable development principles. For instance, today’s report shows that, thanks to the GSP, countries like Sri Lanka, Mongolia and Bolivia are more effectively tackling child labour.

The EU’s trade agenda contributes to the United Nations Sustainable Development Goals around the world. The preferences provide beneficiary countries with an incentive to take further steps towards effectively implementing international conventions related to human rights, labour rights, environment and good governance.

Challenges remain in many of the 71 GSP beneficiary countries, including when it comes to restrictions on civil society and freedom of the media, access to justice, minorities’ rights, capital punishment and freedom of association.  Insufficient progress, including in some of the largest beneficiaries, has resulted in the EU increasing its monitoring and enhancing its engagement, in particular regarding human rights and labour rights.  In the case of Cambodia, this has led to the EU initiating the procedure to temporarily withdraw preferences because of the serious and systematic violation of the principles of core United Nations and International Labour Organization conventions. 

The report looks at the extent to which GSP countries make the most  of the scheme.  It also examines a number of overarching issues such as the freedom of civil society to operate, progress on tackling child labour, and environmental and good governance concerns.  The report gives examples of how the EU works with all stakeholders, such as civil society, international organisations – in particular the United Nations and International Labour Organization monitoring bodies – and beneficiary country authorities to make GSP more effective and to make sure that trade and values advance simultaneously.

EU industry is an important partner in making sustainable development a reality by investing and producing in, and sourcing from, GSP countries and by ensuring that international labour and environmental standards are met.

Background

This third biennial report is accompanied by ten Joint Staff Working Documents written by the European Commission and the European External Action Service.   Nine of the documents assess the performance of each of the nine beneficiaries of the GSP+ arrangement; the tenth assesses the three GSP beneficiary countriesBangladesh, Cambodia and Myanmar, with which the EU started enhanced engagement in 2017 – a more intense dialogue on issues related to human rights and labour rights. 

The EU’s GSP has three arrangements:

A General Arrangement for low and lower-middle income countries, providing the partial or full removal of customs duties on two-thirds of tariff lines (15 beneficiaries);

GSP+ is a special incentive arrangement for sustainable development and good governance.  It slashes these same tariffs to 0% for vulnerable low and lower-middle income countries that implement 27 international conventions related to human rights, labour rights, protection of the environment and good governance (8 beneficiaries);

EBA (Everything But Arms) is a special arrangement for least developed countries, giving them duty-free, quota-free access for all products except arms and ammunition (48 beneficiaries).

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As the climate dries the American west faces power and water shortages, experts warn

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Two of the largest reservoirs in America, which provide water and electricity to millions, are in danger of reaching ‘dead pool status.’ A result of the climate crisis and overconsumption of water, experts say.

Lake Mead, in Nevada and Arizona, and Lake Powell, in Utah and Arizona, are currently at their lowest levels ever. ‘Dead pool’ status would mean the water level in the dams was so low it could no longer flow downstream and power the hydroelectric power stations.

The Lake Mead reservoir, which is the largest artificial body of water in America, was created in the 1930s by the construction of the Hoover Dam, an engineering masterpiece. Lake Powell, the second largest, was created in the 1960s, with the construction of the Glen Canyon Dam.

“The conditions in the American west, which we’re seeing around the Colorado River basin, have been so dry for more than 20 years that we’re no longer speaking of a drought,” said Lis Mullin Bernhardt, an ecosystems expert at the United Nations Environment Programme (UNEP), “We refer to it as “aridification” – a new very dry normal.”

Lake Mead and Lake Powell, which is created by the Glen Canyon Dam, not only provide water and electricity to tens of millions in Nevada, Arizona, California, Wyoming, Colorado, New Mexico and Mexico, but they also provide irrigation water for agriculture. Experts warn that as the crisis deepens, water cuts will need to be introduced, but this may not be enough.

“While regulating and managing water supply and demand are essential in both the short and long term, climate change is at the heart of this issue,” said Maria Morgado, UNEP’s Ecosystems Officer in North America. “In the long term we need to address the root causes of climate change as well as water demands.”

Over the last 20 years, 90 per cent of major disasters were caused by floods, droughts and other water-related events. With more frequent droughts, people in water-scarce areas will increasingly depend on groundwater because of its buffer capacity and resilience to climate variability.

Increases in water demand due to growing populations and irrigation for agriculture have been compounded by climate change impacts such as reductions in precipitation and temperature rises. A rise in temperature leads to increased evaporation of surface water and baking of the earth, decreasing soil moisture.

“These conditions are alarming, and particularly in the Lake Powell and Lake Mead region, it is the perfect storm.”

This is part of a wider trend affecting hundreds of millions of people across the planet. As climate change wreaks havoc on the Earth’s interconnected natural systems, drought and desertification are swiftly becoming the new normal, everywhere from the United States to Europe and Africa.

Drought in Numbers, a 2022 report from the UN Convention to Combat Desertification, found that since 1970 weather, climate and water hazards have accounted for 50 per cent of all disasters and impact 55 million people globally every year. The report also found that 2.3 billion people face water stress annually.

Drought is also one of several factors that impacts land degradation, with between 20 and 40 per cent of the world’s land being classed as degraded, affecting half the world’s population and impacting croplands, drylands, wetlands, forests and grasslands.

The UN Decade on Ecosystem Restoration, of which UNEP is one of the leading members, was set up to halt and restore ecosystems around the world. The Decade runs until 2030, the same timeline as the Sustainable Development Goals, and aims to counteract climate change and halt biodiversity collapse through restoring ecosystems.

UNEP

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WFP: First Ukrainian humanitarian grain shipment leaves for Horn of Africa

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photo © UNOCHA/Levent Kulu

The first vessel transporting Ukrainian wheat grain to support humanitarian operations run by the World Food Programme (WFP) has left the port of Yuzhny, also known as Pivdennyi, the UN agency reported on Tuesday. 

The MV Brave Commander departed with 23,000 metric tonnes of wheat grain for WFP’s response in the Horn of Africa, where the threat of famine is looming due to severe drought. 

This is the first shipment of humanitarian food assistance under the Black Sea Grain Initiative signed by Ukraine, Russia, Türkiye and the UN in July. 

Feeding the world’s hungry 

It marks another important milestone in efforts to get much-needed Ukrainian grain out of the war-torn country and back into global markets, to reach people worst affected by the global food crisis. 

“Getting the Black Sea Ports open is the single most important thing we can do right now to help the world’s hungry,” said WFP Executive Director David Beasley.  

“It will take more than grain ships out of Ukraine to stop world hunger, but with Ukrainian grain back on global markets we have a chance to stop this global food crisis from spiraling even further.” 

WFP will use the wheat grain shipment to scale-up its efforts in southern and south-eastern Ethiopia, supporting more than 1.5 million people affected by drought. 

Globally, a record 345 million people in more than 80 countries are currently facing acute food insecurity, while up to 50 million people in 45 countries are at risk of being pushed into famine without humanitarian support. 

The current hunger crisis is being driven by several factors including conflict, climate impacts, and the COVID-19 pandemic.  

The war in Ukraine is another catalyst as the country is a major grain exporter.  Ukraine was exporting up to six million tonnes of grain a month prior to the start of the conflict in February, but volumes now are at an average of one million tonnes per month. 

More action needed 

WFP said that with commercial and humanitarian maritime traffic now resuming in and out of Ukraine’s Black Sea Port, some global supply disruptions will ease, which will bring relief to countries facing the worst of the global food crisis. 

Crucially, Ukraine will also be able to empty its grain storage silos ahead of the summer season harvest, the agency added. 

However, despite these developments, the unprecedented food crisis continues. 

WFP stressed the need for immediate action that brings together the humanitarian community, governments, and the private sector to save lives and invest in long term solutions, warning that “failure will see people around the world slip into devastating famines with destabilizing impacts felt by us all.” 

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New WEF ESG initiative looks to improve socioeconomic conditions in Northern Central America

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The World Economic Forum announced a new initiative in three Central American countries that will support the private sector apply Stakeholder Capitalism Metrics and better environmental, social and governance (ESG) reporting to improve local socioeconomic conditions and environmental resilience.

The announcement was made at events convened by the Forum with CentraRSE in Guatemala, COHEP in Honduras and Fundemas in El Salvador. These were attended by leaders from the public and private sector, civil society and international organizations who discussed the benefits and opportunities of implementing structured ESG reporting metrics, practices and global corporate trends. National and regional efforts and best practices were also showcased.

The Measuring Stakeholder Capitalism initiative has identified a set of 21 core and 34 expanded universal metrics and disclosures drawn from existing standards. The metrics and disclosure seek to improve how companies measure and demonstrate their performance against environmental, social and governance indicators and consistently track their positive contributions towards achieving the UN Sustainable Development Goals (SDGs).

Strengthening sustainability credentials and building the capacity to report this information will represent a significant advantage for businesses and the economy as a whole, particularly to attract foreign investment and integrate into regional and global value chains.

“Amid an increasingly challenging context confronted with overlapping global crises, public-private collaboration and the decisive action of local leadership are even more necessary to improve economic, social, environmental and governance conditions. All sectors must work together to build a prosperous and resilient ecosystem, offering hope and real opportunities for people in the region to develop their potential at home,” said Marisol Argueta, Head of Latin America at the World Economic Forum.

The initiative is a response The initiative is a response to US Vice President Kamala Harris’s Call to Action, which calls on businesses and social enterprises to promote economic opportunities for people in the region as part of a comprehensive strategy to address the root causes of migration. Vice President Harris has announced a total of more than $3.2 billion in new commitments to the region in coordination with the Partnership for Central America since the effort was launched in May 2022.

“As we look to multi-sector approaches to solve the social challenges facing our communities globally, the World Economic Forum’s ESG framework provides a structure for businesses to drive greater economic development. Working with public and private sector partners, this can translate into quality jobs, environmental protections and better lives for families,” said Jonathan Fantini-Porter, Executive Director of the Partnership for Central America.

The areas of focus, led by the Partnership for Central America (PCA), intend to support the region’s long-term development through digital and financial inclusion, food security and climate-smart agriculture; climate adaptation and clean energy; education and workforce development; and public health access. The planned ESG metrics and corporate reporting activities also aim to motivate local leaders to take measurable action on their contributions to enhancing socioeconomic conditions and environmental resilience in the region.

Based on existing standards, this framework provides a set of metrics that can be reported by all companies, regardless of industry or region. These metrics also offer comparability, which is particularly important for creating a systemic and globally accepted set of common standards for reporting corporate sustainability performance.

As part of the activities carried out in Central America, the Guatemalan company, Grupo Mariposa announced the adoption of the global metrics framework promoted by the World Economic Forum (Stakeholder Capitalism Metrics) and declared its commitment to include them in future reporting cycles. Grupo Mariposa is the first company in Central America to incorporate the metrics in its reports.

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