EU study recommends impact assessments for WTO agreements

The EU's international trade negotiators will promote the use of sustainability impact assessments as a way of judging international trade agreements at the WTO Millennium Round meeting, beginning next week.

Work on how international trade agreements could be assessed for their impact on economic growth, social equity and environmental protection has been undertaken by researchers at the Institute for Development Policy and Management (IDPM) of the University of Manchester. Commissioned by the EU’s trade department, IDPM has developed methodology for assessing the impacts of trade agreements and has also ‘screened’ 15 proposed agreements that will be discussed at the WTO meeting to begin next week in Seattle.

IDPM’s screening has shown that of the 15 proposed WTO measures all are likely to give rise to significant impacts – either economic, social or environmental – and should therefore be subjected to a sustainability impact assessment. IDPM’s report on screening concludes that “all the measures appraised may give rise to significant social and/or environmental as well as economic impacts” and “amongst the target groups which may experience significant impacts, the developing country/least developed country group appears to be particularly prominent”.

Thus far, no impact assessment systems are used by WTO to judge or modify proposed trade agreements. The EU views IDPM’s work as furthering its agenda of incorporating sustainable development principles into the process of global trade liberalisation. The EU has welcomed the IDPM’s progress and argues that it puts the EU “at the forefront of analysis of the relationship between trade liberalisation, economic growth, social equity and environmental protection”.

IDPM’s methodology involves assessing trade agreements against a core group of sustainability indicators in order to measure the agreements’ likely impacts on:

  • average real income
  • employment
  • net fixed capital formation
  • equity and poverty
  • health and education
  • gender inequality
  • environmental quality of air, water and land
  • biological diversity
  • other natural resource stock

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