By Brian Kenety
BRUSSELS, Mar 9 (IPS) - A comprehensive critique of a Sustainability Impact Assessment (SIA), commissioned by the European Commission, is drawing fire from Non-Governmental Organisations (NGOs) for failing to take account of significant drivers of trade liberalisation.
The European Commission, the executive arm of the European Union, last year commissioned the University of Manchester to conduct a Sustainability Impact Assessment (SIA) of the World Trade Organisation's proposed 'Millennium Round'.
Some NGO's, like Oxfam GB, the World Wildlife Fund (WWF), Save the Children and ActionAid welcomed the decision by the Commission to undertake a SIA of trade negotiations at the WTO.
They described the move as "one of the few ongoing efforts to assess the impacts of trade liberalisation from the perspective of sustainability, including economic, environmental and social components".
However a comprehensive critique on the resultant SIA, commissioned by these four NGOs and conducted by Sarah Richardson of Maeander Enterprises, says the EU's study fails to take account of significant non-WTO drivers of trade liberalisation.
The critique accuses the SIA of ignoring "the fact that there are limits to sustainability" which are sometimes "irreversible".
The University of Manchester contractors aimed to develop a methodology for carrying out SIAs and to use this methodology to make a broad assessment of the potential impacts (positive and negative effects) upon the sustainability of the proposed Millennium Round.
In addition, the study was intended to provide ideas on how best to maximise the positive impacts of the expected liberalisation or rule making.
The NGOs agree that it is important for the Commission and EU member states to develop a common methodology for SIAs, as these will 'inevitably become essential for improving transparency and accountability in EU trade policy-making'.
But, according to Richardson, the framework of the study was built on the assumption that growth will be promoted by multilateral trade liberalisation and that this is desirable.
"As such, a pro-liberalisation bias is built into the analysis from the start, limiting consideration of alternative scenarios such as no-further trade liberalisation or trade in a different form," she wrote.
In the SIA, the contractors stipulated that "for this exercise, it is taken as a basic working assumption that non-inflationary growth world-Wide will be boosted by multilateral trade liberalisation and rule making, and that this is desirable."
According to the critique, the SIA is limited to WTO liberalisation and, as such, does not take into account, or control for, change that might be occurring as a result of regional trade agreements, international economic forces or autonomous social or environmental factors, might impact on the sustainability of WTO liberalisation.
"Instead, the SIA process should be informing political decisions on whether and when a new WTO round should start and how it should unfold, and how comprehensive it should be," she wrote.
The Commission's directorate for trade organised a public meeting on Feb 23 for representatives of civil society, EU member states and the European Parliament, at which the Contractors from Manchester University presented their SIA methodology and the results of the preliminary assessment undertaken pre-Seattle.
One general observation made at the public meeting last month was that greater detail needed to be included in future reports.
The University of Manchester contractors stressed that this was merely a preliminary SIA, its main objective being to determine whether or not there were potentially significant impacts, not to establish their precise magnitude.
A full assessment would contain more detail, they said, and agreed that more explanation could have been included about how conclusions were reached.
The contractors noted that it was difficult to separate the influence of trade policy on sustainability from the influence of a multiplicity of other factors that are changing at the same time, for example general economic conditions.
Participants in the public meeting also stressed the need to allow for cumulative impacts: the combined effects may be greater than the simple addition of the separate impacts - another aspect which the trade directorate of the Commission said needed to be explored in more detail in future work.
Still, Richardson said that the SIA's underlying assumptions render it "unable to address the concerns of those who may feel that that the pace of existing 1994 specified liberalisation is too rapid and unbalanced, given a perceived failure in some circles of the good faith implementation in the industrial world" of the WTO's 1994 Uruguay Round commitments.
The framework attempts to deal with the distributional effects of trade liberalisation considering impacts for three groups of countries; developing countries and least developed countries, the EU and the world as a whole.
On a positive note, Richardson said that the study's 'separate focus on developing countries was well taken, given the disproportionate impact WTO-based liberalisation could have on that group of countries.
It seeks to include distributional effects within and across countries, by the major categories of class, gender, and locale (even if the latter receives only a brief analysis in practice)."
"This approach is encouraging as it recognises the importance of identifying differences between impacts in developing and developed countries in order to contribute to the development of policies that take into account those important variations in levels of development," said the crtitique.
The SIA framework as developed is forward looking, based on the EU's hopeful assumption that a comprehensive new round of WTO negotiations would be launched in Seattle. However, the meeting collapsed amid acrimony over agriculture, anti-dumping, core labour standards and other issues.
Penny Fowler of Oxfam GB told IPS that "an over-arching concern is that this work, which we consider to be extremely important, is being championed by the (Commission's directorate for) Environment .. without much support from other parts of the Trade(directorate or) other parts of the Commission or Member States."
"As yet, we have had no specific response to the critique," said Fowler. "We would like to see the Commission's work complemented by (EU) member states to promote the development of a common EU methodology for SIAs, and for SIAs to be institutionalised by making them mandatory for any future trade agreements."
The NGOs would like to see the EU adopt a regional or even sub-regional approach so that the results of the SIA are more concrete and its recommendations can foster policy coherence across different EU external policies vis-a-vis regional groupings of countries.
"This would clearly facilitate the deployment of a range of instruments (including development co-operation and technical assistance) available in the EU to enhance the positive impacts of trade liberalisation and mitigate the negative effects both within the EU and in third countries (especially in Least Developed Countries)," wrote Richardson.:
