Executive Forum on “Competing in a Changing Europe”
11 May 2004
Statement by Ms. Brigita Schmögnerová,
Mr. Chairman, Excellencies, Ladies and Gentlemen,
Welcome to the Executive Forum on Competing in a Changing Europe. I would like to thank all participants for being here today. We hope to have a productive debate on the policies and strategies that need to be put in place as a reaction to a changing Europe that would lead to increased trade and raise living standards in the region.
The Forum includes two sessions of interactive debate where participants will be asked to work in small groups to answer questions that you will find in your programme. For you, this will be an occasion to put forward your views on the changing environment for trade and enterprise development and on the challenges that your organization or country is facing. For us, it will be an occasion to learn about your priorities, and your expectations about the work we do at the UNECE.
This Forum is organized by the Committee for Trade, Industry and Enterprise Development. The Committee’s overarching goal is to assist all countries in the UNECE region to become better integrated into regional and international trade, in particular by implementing best practices and international and regional trading standards, norms and recommendations – all of which are prerequisites for participating fully in international supply chains and networks of exchange in the modern global economy.
Today, EU enlargement provides us with a unique opportunity for further cohesion and economic integration in this region. Nonetheless, it also brings the risk of new dividing lines emerging and creating “two parallel Europes” growing and developing at different speeds, and perhaps eventually in different directions. As a consequence, one of our priorities is to assist our least advantaged member States in adapting to the challenges of the new trading environment.
Following the recent addition of more than 75 million people into the EU, the scope of the Single Market has been dramatically enlarged and will hopefully increase stability and prosperity in the region. For the non-EU countries, the net effect is expected to be positive. First, because enlargement will boost growth in the EU, which is the principal export market for these countries. And second, because these countries can now gain access to a much larger market by complying with one single set of rules and regulations.
In addition, the EU common external tariff is generally lower than the previous national tariffs of the new Member States. It is particularly important to note that this was true for the two largest countries among the new EU members, Poland and Hungary, where average tariff levels fell significantly, especially for agricultural products. In those two countries, tariff levels fell even for fisheries, where most of the accession countries raised their market access tariffs on joining the EU.
However, we should be aware that there are also examples of some problems created by EU enlargement. Existing bilateral preferential trade arrangements between acceding EU Member States and non-EU countries had to be terminated. One example is the agreement between Hungary and Serbia and Montenegro, two countries with a common border and historically strong trading activity. In a number of cases, EU enlargement may also disrupt cross-border trade as a result of the introduction of the new EU visa regime.
The EU enlargement is only one among many factors that are shaping the trading environment today in the UNECE region. At the same time as enlargement was being negotiated and finally implemented, the countries of the UNECE region were also actively participating in trade negotiations at the multilateral level, as well as engaging in a large number of free trade area agreements and other trade arrangements, both among themselves and with countries of other regions. A number of UNECE countries are also negotiating, or have recently completed, their accession to the WTO.
However important they may be, membership in customs unions, free trade agreements and the WTO is not sufficient to guarantee increasing participation in international trade. For this reason, countries need to look at regulatory and product-related issues such as implementing uniform norms and standards as well as reducing and harmonizing cumbersome and time-consuming trade formalities and border procedures.
This Forum is part of the meeting of the Committee for Trade, Industry and Enterprise Development, which is developing, maintaining and implementing a wide range of instruments, norms, standards and best practices to facilitate international trade and to encourage enterprise development. Because the UNECE member States include some of the most important players in international trade negotiations, the UNECE’s instruments contribute directly to a stronger and more efficient multilateral trading system.
It may seem that regulatory and quality standards as well as customs procedures are technical subjects. Nevertheless, they all contribute to shorter shipping and processing times, i.e. to a shorter “time to market”. In addition, they contribute to the ability to comply with complex product specifications and quality standards - these are key determining factors in a firm’s competitiveness.
When economic agents move away from their domestic markets, their success or failure often depend on how familiar they are with the regulations and standards in their export markets. Essentially, the purpose of standards is to protect the health and welfare of consumers, to keep costs of transactions as low as possible for producers, processors and consumers, and to safeguard honest practices and promote good quality.
Standards facilitate trade as all the parties involved in the transaction “speak a common language”. It is the existence of standards that allows long-distance trade in agricultural products as they build the confidence of the purchaser and consumer. A standard can also encourage farmers to improve the quality of their produce.
As an indicator of the significance of UNECE agricultural quality standards, you may wish to note that European Union standards that are based on UNECE standards cover around 90% of the market volume of products traded in Europe! Moreover, because a large proportion of world trade in agricultural products relies on UNECE standards, these standards can contribute to further post-enlargement European integration if their use is promoted in non-acceding countries.
At the same time, too many standards - which are the expression of a society that cares about the quality of produce and manufactures - are often at odds with the needs of societies that are still preoccupied with fulfilling the basic needs of their people. For this reason, it is clearly important for standards to be developed internationally so that a balance among different sets of interests can be found, which respects the interests of all stakeholders. More generally, I hope very much that the recent EU initiative on the Doha Round of world trade talks, an initiative that includes elimination of agricultural export subsidies and a softening of its demands for negotiations on the Singapore issues, will speed up the Doha Round and – at the same time – that the governments will agree to negotiate the last Singapore issue, that is trade facilitation. I strongly believe that this would be to the benefit of all member States.
UNECE is strongly involved in trade facilitation. Our work in trade facilitation has resulted in techniques, recommendations and norms that are implemented across the world. We also create global e-business standards which are critical to trade as the development of regional or national variations of these standards would result in ipso facto technical barriers to trade in the growing area of electronically traded goods and services.
Ladies and Gentlemen,
I would also like to draw your attention to another area of work of the CTIED in industry restructuring and enterprise development, where UNECE focuses on phasing out declining sectors, stimulating entrepreneurship and the development of small and medium-sized enterprises (SMEs), and promoting the use of information and communication technologies, especially to encourage the development of the knowledge-based economy in this region.
Other important priorities for the Committee’s work are good governance and the development of new legal and commercial practices as well as building partnerships between the public and private sector. Our programmes in these areas are also increasingly focussed on the non-EU member countries, and on the most disadvantaged among economic actors.
During the course of the Forum, all the different areas of activity of the Committee will be at the centre of the debate. I believe, therefore, that this Forum will allow us to better serve the interests of our member States, by helping us to better orient our work as new priorities emerge from a rapidly changing Europe, hopefully contributing to an environment which would be more conducive to improving the competitiveness of all UNECE member States.
Thank you for your attention.