environmental goods agreement trade sia- kick-off meeting · strategy, design of content for...

Environmental Goods Agreement Trade SIA- Kick-off Meeting

SUSTAINABILITY IMPACT ASSESSMENTS IN SUPPORT OF FREE TRADE AGREEMENTS BETWEEN THE EUROPEAN UNION AND THE PHILIPPINES, BETWEEN THE EUROPEAN UNION AND INDONESIA, AND THE EUROPEAN

UNION AND MALAYSIA

Civil Society Dialogue June 5, 2018 - Alfred Borschette Centre

REVISED-TRADE2016/C2/C06

Agenda – Discussions of the Draft Inception Report

1. Project Objectives and Overview

2. Methodological Approach

3. Stakeholder Engagement

4. Project Deliverables and Timeline

5. Individual SIAs:

Introduction

Proposed Sector Selection

Project Objectives

3REVISED-TRADE2016/C2/C06

Project Objectives

To present a robust analysis of the potential economic, social, human rights andenvironmental impacts that the trade agreement could have, in the EU, in thepartner countries, as well as in other relevant countries.

To deploy a continuous and wide-ranging consultation process which ensuresa high degree of transparency and the engagement of all relevant stakeholders inthe conduct of the SIA inside and outside the EU; and

To provide recommendations regarding positive impacts and best-practices, how to enhance these, and how to avoid or minimise any compromising and unintended negative effects.


Project Overview • Sustainability Impact Assessments (SIAs) are key tools for the conduct of

sound, evidence-based and transparent trade negotiations.

• SIAs help to steer FTA negotiations, assessing likely changes, identifyingpossible trade-offs, and ensuring policy changes are optimised.

• SIAs should be integrated; independent; evidence-based,transparent; participatory; and proportionate.

• For this project, three separate and stand-alone SIAs are beingundertaken in support of free trade agreement (FTA) negotiationsbetween the EU and the Philippines, the EU and Indonesia, as well as theEU and Malaysia.


Methodological Approach


Economic Impact Assessment

Quantitative approach Use of multi-region CGE model based on the GTAP framework.Modelling to be undertaken by DG Trade; interpretation, analysis and recommendations to be undertaken by Study Team. Results of model will serve as important inputs for social, human rights and environmental impact assessments. Model indicators to be explored: welfare, GDP, trade flows (imports and outputs), sectoral output, consumer prices, wages, sectoral employment, reallocation of jobs, and CO2.Modelling scenarios - (i) an ‘ambitious’ degree of liberalisation and (ii) a more ‘conservative’ degree of liberalisation.

Qualitative approach Review of tariff and non-tariff barriers, including SPS, technical regulations, local content requirements, export restrictions, customs procedures, etc. Additionally, a review of restrictions in the trade of services, investment barriers, barriers to access to government procurement, competition policy, etc., will be undertaken. “SME Test” - Assessment of the potential impact on SMEs, including competitiveness, compliance costs, administrative costs, and market entry costs.


Social Impact Assessment

Overview

Primary basis for quantitatively assessing social impacts will be derived from CGE model.

Estimates on wages and labour costs (skilled and unskilled labour), anticipated reallocation of jobs and labour demand across economic sectors.

Estimate impact on job creation and for specific sectors, as well as on professions and skill levels.

Due to anticipated adjustment costs, significant emphasis will be placed on the Philippines/Indonesia/Malaysia for the descriptive statistics of social indicators – employment, female employment, youth unemployment, wage, social protection rating, social inclusion rating, poverty rate, civil liberties index, inequality rate, education, health, and implementation of ILO Core Labour Standards.

Comprehensive screening and scoping exercise that highlights: The relevant social issues in the Philippines/Indonesia/Malaysia, and to a lesser extent, in the EU; The components of a potential FTA that may enhance or exacerbate these issues; and The particular groups that are most likely to be impacted by the FTA.


Human Rights Impact Assessment


Comprehensive screening and scoping exercise based on the EC’s Guidelines for impact assessments that seeks to:

Identify the policy measures that are most likely to impact human rights; andIdentify the groups that are most likely to be impacted.

It is anticipated that adjustment costs will be greater in the Philippines/Indonesia/Malaysia than is the case for the EU; therefore, greater focus on the human rights impacts on the former countries.

Focus on descriptive statistics of human rights indicators, including: the right to adequate standard of living; right to the best standards of physical and mental health; the right to education; equal rights for men and women, etc. Additionally, emphasis will be placed on implementation of international human rights frameworks.

Quantification of human rights impact are often difficult. Primary analysis will be qualitative in nature, aided by results from econometric modelling, detailed sectoral analyses, and information derived from stakeholder consultation activities.

Environmental Impact Assessment

Overview Primary basis for quantitatively assessing environmental impacts will be derived fromCGE model.Estimates on expected changes in carbon emissions resulting from the FTA as well as onchanges in sectoral input.Environmental impact will be derived from estimated changes in production and trade.Due to anticipated adjustment costs, significant emphasis will be placed on thePhilippines/Indonesia/Malaysia for the descriptive statistics of environmental indicators –GHG emissions, air quality, energy use, water quality and resources, land use,waste and waste management, biodiversity and forest area coverage.Additional qualitative assessment will examine the potential interaction between the FTAand MEAs to which either the Philippines/Indonesia/Malaysia and the EU are a signatory.

Comprehensive screening and scoping exercise that seeks to:Identify key environmental issues that are relevant to sustainability in both the FTApartner countries;Identify regions and sectors most impacted by these issues; andIdentify the components of a potential agreement that are likely to produce the greatestpositive and negative impact.


Stakeholder Engagement


Stakeholder Engagement

Online presence

Online public consultation

Website online contact form

Social media channels

Electronic newsletters

Dialogues

Civil Society Dialogues

Inter-Service Steering Group

Interviews and meetings

Local workshops13REVISED-TRADE2016/C2/C06

Local Workshops

3 full-day local workshops will be held:Jakarta, Indonesia – July 2018 (TBC)Kuala Lumpur, Malaysia – September 2018 (TBC)Manila, Philippines – September 2018 (TBC)

The workshops will be designed to promote a genuine and comprehensivedialogue and gather perspectives of relevant stakeholders

Particular emphasis to be placed on stakeholders from local publicadministrations, businesses involved in environment technology trading andservices, environmental and social NGOs, trade unions and civil society;

The outputs of these workshops will feed into the results of the respective SIAs.


Stakeholder Engagement –Survey

• 12 week online public consultation

• Distributed via the dedicated websites as well as in hardcopy during workshops and

other meetings

Dedicated websites

Visibility of progress on the project by

publication of relevant information and

documents

Main platform for conducting online

stakeholder outreach and consultation

www.eu-indonesia-sia.com

www.eu-philippines-sia.com

www.eu-malaysia-sia.com

Social media channels

• To update stakeholders on the progress

of the project

• To facilitate discussion and stakeholder

engagement

Stakeholder Engagement – Online Presence

Project Deliverables and Timelines


Project Timeline – Inception Phase

18

Mar 2018.sDevelopment of Stakeholder Strategy, Design of Content

for Websites and Social Media

Launch of SIA Websites

May 2018

May 2018 .Draft Inception Reports

Online

Civil Society Dialogue & ISGMeeting

June 2018

June 2018 .

Final Inception Reports online

Feb 2018

Kick-Off Meeting

Development of methodology

Review of existing studies and research

Screening and scoping exercise

Development of design and content for website and social media channels

Publication of the Final Inception Report


Project Timeline – Implementation Phase

19

June 2018 .s

1st round of impact assessment and sectoral

analyses

July 2018 .

Local workshop in Jakarta

August 2018 .

2nd round of impact assessment and sectoral analyses

August 2018 .Submission of Draft Interim

Reports

September 2018 .Civil Society Dialogue & ISG

Meeting

June 2018

Civil society consultation and face-to-face interviews begins

Economic, social, human rights and environmental impact assessments

Sectoral analyses

Stakeholder engagement and consultation activities – OPC, local workshops, interviews and meetings,


Project Timeline – Finalisation Phase

20

Sept 2018 .s

Local workshops in Manila and Kuala Lumpur

Sept 2018 .Final Interim Reports online

Nov 2018 .

Draft Final Reports online

Nov 2018 .Civil Society Dialogue and ISG

Meeting

Dec 2018 .

Final Reports online

Sept 2018 .3rd round of impact

assessments, sectoral analyses

Capturing final feedback from EC and Stakeholders

Identification of risks and opportunities, as well as mitigation strategies

Formulating answers to research questions

Development of policy recommendations


Introduction to SIA for EU-Indonesia FTA


Introduction

Indonesia is one of the region’s fastest growing economies in the region; its economy has more than tripled in size over the past ten years.

The Indonesian economy is expected to continue to grow rapidly at around 5.5 per cent per year.

Indonesia is the EU’s 5th largest trade partner in ASEAN, 29th overall in 2017. The EU is the 4th largest trading partner for Indonesia.

10.8% of ASEAN imports from the EU are allocated to Indonesia; 12.3% of ASEAN exports to the EU originate from Indonesia.


Selector Selection – SIA for EU-Indonesia SIA

• Sector• Economic and Trade Impact• Social Impact• Human Rights Impact• Environmental Impact• Sectoral Sensitive Issues• Offensive/• Defensive interests


Sector Economic Impact Social Impact Human RightsImpact

EnvironmentalImpact

Vegetable oils • Indonesia is the largest producer of palm oil in the world with approx.

• The EU market represents about 15% of total Indonesian palm oil exports.

• Important source of income and employment in rural areas and poorer segments of society.

• Impacts labour standards and SMEs (small holders).

• Land grabs and displacement of indigenous groups

• Deforestation, leading to increases in GHG emissions, biodiversity loss, impacts on soil and air quality. ‘

Automotive • Indonesia largest automotive market in ASEAN and 2nd

largest manufacturer.

• EU export and outward FDI opportunities

• Growth in employment for major jobs-producing sector in both EU and Indonesia

• Labour standards, including subcontracting.

• Increases in GHG emissions

Energy and mining • Indonesia has major deposits of oil, natural gas, coal and other minerals.

• Restrictions in the form of foreign equity caps, prohibitions on investment, etc. that may hinder EU investment.

• Mining and energy a potentially important source of employment for poorer communities with limited alternative economic opportunities

• Unsafe labour conditions; land-grabs and displacement of indigenous populations.

• Increase in fossil fuel production and consumption leading to rise in GHG emissions;

• Deforestation leading to increase in GHG emissions, soil erosion and loss of biodiversity.

Selector Selection – SIA for EU-Indonesia SIA

• Sector• Economic and Trade Impact• Social Impact• Human Rights Impact• Environmental Impact• Sectoral Sensitive Issues• Offensive/• Defensive interests


Sector Economic and TradeImpact

Social Impact Human RightsImpact

EnvironmentalImpact

Fisheries industry • Indonesia a major exporter of fisheries products; EU largest importer.

• Opportunity for Indonesia to expand exports and move to higher value added downstream.

• Major source of income for poorer, lower-skilled workers in Indonesia.

• Potential negative impact on EU fisheries processing industry in coastal areas more reliant on the sector

• Labour standards and health and safety issues in SMEs.

• Food security could be improved by sustainable management or harmed by overfishing.

• Over fishing, soil erosion, waste management.

Footwear and Articles of apparel and clothing accessories.

• Footwear and articles of apparel together account for 12.3% of Indonesia’s exports to the EU and have potential to grow.

• Significant source of employment in Indonesia

• Important source of employment and earnings for women. Potential to reduce poverty

• Labour standards and health and safety issues.

• Increases in air and water pollution as a result of the production process

Banking and insurance

• Significant restrictions in financial services in Indonesia remain that affect FDI and EU market access

• Potential growth in well-paying jobs in both EU and Indonesia.

• Low income groups better served with more competitive products and wider choice.

•

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We welcome your input!


Stay up to date on the evaluation process

[email protected]

www.eu-indonesia-sia.com

@EU_ID_SIA

Introduction to SIA for EU-Malaysia FTA


Introduction


• Malaysia was one of the 13 countries identified by the Commission on Growth and Development to have recorded an average growth of more than 7 per cent per year for 25 years.

• It is also ranked as an upper middle income country by the World Bank.

• Malaysia is the EU’s 3rd largest trade partner in ASEAN, 21st overall in 2017. The EU is the 3rd largest trading partner for Malaysia.

• 10.6% of ASEAN imports from the EU are allocated to Malaysia; 18.5% of ASEAN exports to the EU originate from Malaysia.

Sector Selection – SIA for EU-Malaysia FTA


Sector Economic and TradeImpact

Social Impact Human RightsImpact

EnvironmentalImpact

Automotive (vehicles and components)

• High GDP impact for Malaysia;

• EU outward FDI opportunities

• Growth in employment for major jobs-producing sector in both Malaysia and EU.

• Labour standards in sub-contracting


ICT products and electronic goods (HS 85)

• Malaysia’s leading export sector, recently declining; leading good traded bilaterally

• Growth in well-paying jobs

• • Use of heavy metals and toxic/carcinogenic chemicals causing pollution; e-waste

Vegetable oils • Malaysia second largest global producer and exporter of palm oils

• Usage in EU biofuels and processed agricultural products

• Important source of income and employment in rural areas and poorer segments of society

• Vulnerable/ indigenous groups facing deforestation, illegal logging and land grabs; human rights concerns for migrant workers

• Accelerated deforestation leading to increases in GHG emissions, biodiversity loss, impacts on soil and air quality.

Sector Selection – SIA for EU-Malaysia FTA



EnvironmentalImpact

Financial Services (including (re)-insurance)

• EU could increase commercial presence.

• Growth in well-paying jobs

• Financial inclusion of vulnerable groups could be improved

•

Environmental Goods and Services (waste management)

• EU could increase commercial presence

• Improved environmental conditions could lead to positive health aspects

• Address lack of Malaysian capacity in waste management

Machinery (HS 84) • Second largest product traded bilaterally. One of the leading sources of value-added in EU manufacturing

• Growth in jobs for one of the major employers in EU and Malaysia. Majority of firms in EU classified as SMEs.

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[email protected]

www.eu-malaysia-sia.com

@EU_MY_SIA

Introduction to SIA for EU-Philippines FTA


Introduction

The Philippines is one of the fastest growing economies in the region, doubling in size over the past decade.

The Filipino economy is expected to experience continued economic growth at over 6 per cent per year.

The Philippines is the EU’s 6th largest trade partner in ASEAN, 41st overall in 2017. The EU is the 4th largest trading partner for the Philippines.

7.2% of ASEAN imports from the EU are allocated to the Philippines; 5.6% of ASEAN exports to the EU originate from the Philippines.


Sector Selection – SIA for EU-Philippines FTA



EnvironmentalImpact

Automotive (vehicles and components)

• Increased GDP and employment in the Philippines

• EU outward FDI opportunities and increased competitiveness

• Employment growth in both the EU and Philippines

• Labour standards in sub-contracting


• Releases of solvents and toxic chemicals

Clothing, apparel and footwear

• Potential growth in investment in Philippines and exports to the EU.

• Increased wages and employment for lower-skilled workers

• Potential gender dimension

• Concerns over working conditions and labour standards

Increases in air and water pollution as a result of the production process

Fisheries • Potential for increased exports to the EU.

• Opportunities for Philippines to expand into higher value added downstream activities.

• Important source of employment and income for poor and rural populations in the Philippines.

• Potential negative impact on EU workers in processing sector in coastal regions reliant on the sector

• Food security could be improved by sustainable management or harmed by overfishing

• Labour standards and health and safety issues in SMEs

• Overfishing

• Damage to marine ecosystems

• Mangrove loss through conversion to fishponds and eutrophication

Sector Selection – SIA for EU-Philippines FTA



EnvironmentalImpact

Tourism • Important contributor to GDP in the Philippines.

• Opportunities for increased investment

• Important contributor to employment;

• Potential to contribute to poverty reduction

• Displacement of indigenous groups

• Overcrowding; extensive strain on resources;

• Construction can disrupt ecosystems

Other Business Services (BPO, communication and IT services)

• Philippines is a world leader in BPO services

• Important source of foreign earnings.

• Important contributor of employment in well-paying jobs in Philippines

• Major employer of women

• Large source of tax revenue

• Decent work challenges: high-stress, and risks to health

• Low unionisation and collective bargaining

Office and telecommunication equipment (HS 85)

Leading product traded between the EU and Philippines. Potential for increased investment in Philippines, facilitating ascension of value chain and improving labour productivity

• Growth in well-paying jobs in the Philippines

• Impact on health through generation of e-waste

• Use of heavy metals and toxic/carcinogenic chemicals causing pollution; e-waste

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[email protected]

www.eu-philippines-sia.com

@EU_PH_SIA



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