Trade Sustainability Impact Assessments (TSIAs) in support of - - PowerPoint PPT Presentation

Trade Sustainability Impact Assessments (TSIAs) in support of negotiations of DCFTAs between the EU and respectively the Kingdom of Morocco and the Republic of Tunisia

Public Meeting, DG Trade Brussels, 09 April 2013 Ecorys

Agenda

1. Approach and conceptual framework 2. Methodological developments 3. Consultation plan and stakeholders 4. Preliminary Screening on Key Sustainability Issues 5. Planning 6. Questions and contact info

1. Approach and conceptual framework

General approach to the studies based on three phases:

• 2. Sectorial Trade SIA analysis
• Scenario analysis and CGE modelling
• Additional quantitative and qualitative analyses
• Screening and scoping analysis
• 0. Inception
• 1. Overall analysis of the sustainability impacts
• In-depth analysis of selected sectors and horizontal issues
• Causal Chain Analysis (CCA)
• Literature review, Partial Equilibrium modelling, interviews
• 3. Policy recommendations and flanking measures
• Causal Chain Analysis
• Consultation and dissemination (throughout all phases)
• Final report

1. Approach and conceptual framework

A general approach based on three phases

Phase Methodology - Pillar

Inception Screening and scoping Causal Chain Analysis (CCA) Consultation and dissemination 1 Overall analysis

Scenario and CGE

Additional quantitative and qualitative analysis 2 Sectorial Trade SIA analysis Sectorial analysis 3 Policy recommendations and flanking measures

1. Approach and conceptual framework

• 1. Screening and scoping
• 2. Scenario analysis & CGE
• 3. Add’l quantitative & qualitative analysis

› Social (quantitative & qualitative) › Human rights (qualitative) › Environmental (quantitative & qualitative)

• 4. In-depth analysis

› Sectorial analysis › Horizontal issues

• 5. Causal Chain Analysis
• 6. Consultation and dissemination

2. Methodology

CGE modelling specification

› Adjusted actual projection to 2011, based on 2007 (GTAP 8.0) data

• 1. EU-28

(including Croatia)

• 4. Egypt
• 7. Turkey
• 2. Morocco
• 5. Rest of North Africa

(Algeria, Libya,)

• 8. Rest of Africa
• 3. Tunisia
• 6. Middle East (excl.

Gulf States and Iran) (Iraq, Jordan, Lebanon, Palestine, Syria, Yemen, Israel)

• 9. Rest of the World
• 1. Country selection
• 2. Base year

2. Methodology

• 3. Sector specifications

Nr. Sector content (TSIA Adapted) 1 Grains and crops 2 Veg, fruit &- nuts 3 Other crops 4 Animal products 5 Forestry products 6 Fish products 7 Energy 8 Other minerals 9 Livestock and Meat Products 10 Vegetable oils and fats 11 Other processed food 12 Beverages and tobacco 13 Textiles 14 Wearing apparel 15 Leather products 16 Wood, paper, publishing 17 Petro-chemicals 18 Chemicals, rubber, plastic products 19 Ceramics, cement, etc. 20 Primary metals 21 Fabricated metals 22 Motor vehicles 23 Other transport Nr. Sector content (TSIA Adapted) 24 Electronics, computers 25 Other machinery and equipment 26 Other manufacturing 27 Utilities 28 Construction 29 Trade 30 Other transport 31 Water transport 32 Air transport 33 Communication 34 Finance and insurance 35 Business and ICT 36 Personal and recreational services 37 Public and other services

2. Methodology

CGE modelling specification: Morocco

Scenario 1: Liberalisation towards the October 2012 agreement › Tariffs A full 100% liberalisation of all agricultural products and processed agricultural products, fish and fishery products, except for sensitive › Services liberalisation No services liberalisation is modelled › Other non-tariff measures No other NTMs liberalisation is modelled Scenario 2: Morocco – DCFTA liberalisation scenario › No tariff reductions (tariffs already 0%) › Services liberalisation 3% reductions in TCEs on Morocco -> EU 13% reduction in TCEs on EU -> Morocco

2. Methodology

CGE modelling specification: Tunisia

Scenario 1: Tunisia – DCFTA liberalisation scenario In baseline: Morocco October 2012 agreement

• Tariffs

› Tariff reduction EU into Tunisia: 80% liberalization for agricultural sectors. › Tariff reduction Tunisia into the EU: 95% liberalization for agricultural sectors. › No tariff reductions in industrial goods

• Services liberalisation

› 3% reductions in TCEs on Tunisia -> EU › 8% reduction in TCEs on EU -> Tunisia

› Sectors are modeled in either of three scenarios:

• 1. Ambitious liberalization scenario;
• 2. Limited liberalization scenario;
• 3. No liberalization foreseen;

› All agriculture & manufacturing sectors: trade facilitation – However, an asymmetric liberalization is modeled:

• More ambitious liberalization for Moroccan/Tunisian side (regulatory

approximation) – Compliance costs taken into account

2. Methodology

Other non-tariff measures

2. Methodology

Outputs of overall analysis (Phase 1)

Theme Indicator

• 1. Aggregate results

a) Wages (skilled and unskilled) b) GDP c) Total exports d) Total imports e) National income f) Terms of trade

• 2. Sector results

a) Bilateral exports b) Output c) Value added d) Employment (skilled and unskilled)

• 3. Environment variables

a) Emissions b) Agricultural c) Fisheries

• 4. Social variables

a) Unskilled wage changes b) Labour displacement c) Measure of inequality

2. Methodology

Social and environmental effects – additional analysis

• Objective:

to obtain more detailed, disaggregated information on potential effects in these 2 spheres

• Approach:
• A combination of quantitative and qualitative analysis
• Quantitative analysis:
• Building on CGE results;
• Combining them with new data sources and techniques.

2. Methodology

Quantifying social impact in Tunisia

• DCFTA likely to affect relative prices (e.g. of food) – modelled in CGE. Effects

split into: › Consumption effect: prices of households’ consumption basket will be affected: especially important for the poor › Income / wage effect: income determined by changing wages and – e.g. for food producers – also sectorial prices: especially relevant in rural areas

• Simulation taking 2010 household budget survey for Tunisia as a baseline
• Outcome of analysis: distribution of welfare effects of the DCFTA

› poverty indicators (incidence, gap/depth, severity) › inequality indicators (Gini, decile ratio) › Identification of vulnerable groups (e.g. regional, gender differences, household types) Quantitative analysis is not possible for Morocco due to lack of household- level data

2. Methodology

Quantification of environmental impacts

• Inputs:

› CGE results: sectorial outputs & CO2 emissions › air pollution intensity per sector › data / methodology for estimating externalities from environmental burden

• Outcomes

› Pollution change (% & tonnes): SO2, NOx and particulate matter in Morocco › Computed values (in EUR) of external costs (welfare changes due to effects on human health) associated with change in air emissions. › Compute values of total external costs of CO2 emission released in Morocco and in the EU.

2. Methodology

Qualitative analysis

› Social aspects › Decent work agenda, interaction with ILO core labour standards, equality › Environmental aspects › Land, water and other pollution, biodiversity, etc. › Human rights issues › Broad range of issues, following Walker (2009), looking e.g. at complementarity between trade law and human rights law, role of DCFTA in growth and resources for HR, competitive pressure and HR risks

• Extensive literature review
• Critical interpretation of CGE and other simulation results at the sectorial level
• Selective analysis of reporting schemes under relevant international conventions
• Consultations with stakeholders

3. Consultations and stakeholders

Civil Society landscape in Morocco

• Richest and most diversified among Maghreb countries: about 60,000 CSOs in

the country

• Mainly young structures and concentrated in Rabat and Agadir
• Consultation between the public and private sector on trade issues exists, and is

chaired by the Ministry of Foreign Trade.

3. Consultations and stakeholders

Civil Society landscape in Tunisia

• Many new CSOs have emerged since the revolution, most still in development
• Difficult to assess the quality of CSOs, but many are very vocal
• Government is open to inputs from CSOs – listening actively
• Mainly focused on aspects of the political transition
• In the context of the DCFTA, the government has also indicated that it wants to

involve civil society, but so far, this does not seem to have happened.

3. Consultations and stakeholders

Consultation activities

Activities Detail 1 Electronic consultation and documentation Continuously http://www.trade-sia.com/morocco/ http://www.trade-sia.com/tunisia/ 2 Public meetings EU 9 April 2013 October 2013 3 Workshop(s) in Morocco & Tunisia 18-30 June 2013 (exact dates t.b.d.) 4 Attendance of other relevant conferences, workshops etc. 5 Personal interviews with individual representatives of civil society and stakeholders Continuously

3. Consultations and stakeholders

Website / Email / Feedback form

• Websites:

www.trade-sia.com/morocco www.trade-sia.com/tunisia

• Email:

tsiamorocco@ecorys.com tsiatunisia@ecorys.com

• Facebook page

“tsiamorocco” “tsiatunisia”

4. Identification of key issues

Screening and scoping

• Aim: to identify key sustainability issues DCFTA; for further in-depth analysis
• Selection criteria applied in screening and scoping exercise:

Number Criterion Criterion 1 Initial importance for economy (GDP, employment, trade shares) Criterion 2 Economic impact from DCFTA Criterion 3 Social / environmental importance and impact / Human rights Criterion 4 Stakeholder issues of special importance Criterion 5 Strategic importance of sector/issue in the negotiations

4. Identification of key issues

Criterion 1. Initial importance for economy Morocco

Morocco to EU

Nr. Sector Share in Moroccan exports to EU (%) 1 Wearing apparel 20.6% 2 Other machinery and equipment 10.5% 3 Veg, fruit & nuts 9.5% 4 Other processed food 8.7% 5 Textiles 5.1%

EU to Morocco

Nr. Sector Share in EU exports to Morocco (%) 1 Other machinery and equipment 20.5% 2 Chemical, rubber, plastic products 12.3% 3 Textiles 9.7% 4 (Petro) chemicals 7.4% 5 Motor vehicles 7.4%

4. Identification of key issues

Criterion 1. Initial importance for economy Morocco

Top 15 sectors Morocco, share of value added, skilled and unskilled employment, 2007

Sector Share in value added (%) Share in skilled labour (%) Share in unskilled labour (%) 1 Public and other services 23.6% Public and

• ther services

57.4% Public and other services 15.1% 2 Trade 8.7% Trade 6.7% Trade 11.0% 3 Construction 6.6% Other transport (services) 4.6% Construction 8.1% 4 Other transport (services) 6.2% Construction 4.1% Other transport (services) 7.7% 5 Grains and crops 5.3% Business and ICT 3.7% Grains and crops 6.7%

4. Identification of key issues

Criterion 1. Initial importance for economy Tunisia

Tunisia to EU Nr. Sector Share in Tunisian exports to EU (%) 1 Wearing apparel 20.5 % 2 Other machinery and equipment 18.3 % 3 Energy 11.7 % 4 Textiles 6.8 % 5 Leather products 5.1 % Nr. Sector Share in EU exports to Tunisia (%) 1 Other machinery and equipment 21.9 % 2 Textiles 13.6 % 3 Chemical, rubber, plastic products 12.0 % 4 (Petro) chemicals 8.1 % 5 Motor vehicles 5.8 % EU to Tunisia

4. Identification of key issues

Criterion 1. Initial importance for economy Tunisia

Top 15 sectors Tunisia, share of value added, skilled and unskilled employment, 2007

Sector Share in value added (%) Sector Share in skilled labour (%) Sector Share in unskilled labour (%) 1 Trade 19.4% Public and other services 62.1% Public and other services 17.8% 2 Public and other services 16.1% Trade 8.2% Trade 16.6% 3 Veg, fruit & nuts 8.1% Business and ICT 4.6% Veg, fruit & nuts 14.0% 4 Energy 6.1% Finance and insurance 4.5% Construction 8.9% 5 Other transport 5.7% Construction 3.7% Other transport 7.0%

4. Identification of key issues

Criterion 2. Impact (economic) from the DCFTA

• Based on outcomes of Phase 1: mainly CGE outcomes + additional analysis

Criterion 3. Social / Environmental importance / Human rights impact

• Based on CGE outcomes and additional quantitative and qualitative analysis

4. Identification of key issues

Criterion 4. Stakeholder issues of special importance Morocco

• Based on inputs received from the Civil society, our local partners and existing

literature and documentation › Implementation issues regarding political or policy related matters › Implementation issues regarding EU-Morocco relationships › Competition issues in the tobacco, transport and banking industries. › Corruption issues; the Government established an anti-corruption institution; the agency is working in close cooperation with Transparency International Morocco, in particular on public procurement issues. › Human rights issues, for which several civil society organisations have been involved in Morocco

4. Identification of key issues

Criterion 4. Stakeholder issues of special importance Tunisia

• Based on inputs received from the Civil society, our local partners and existing

literature and documentation » Importance of regulatory approximation » Importance of agriculture liberalization and labour mobility for Tunisia » Civil society involvement

4. Identification of key issues

Criterion 5. Strategic importance of sector in the negotiations » Offshoring (horizontal), Textiles, Car parts, and Fruits and vegetables » More detailed information is expected

5. Planning

Activity Leaders Deadline

Kick-off meeting EC and Ecorys 23 January 2013 Draft Inception Report Ecorys 13 March 2013 Online publication of draft Inception Report 10 days before CSD Ecorys 29 March 2013 Civil Society Dialogue EC and Ecorys 09 April 2013 2nd draft inception report (final version) Ecorys 26 April 2013 1st Draft Interim Technical Report Ecorys 29 May 2013 Online publication of draft Interim Technical Report Ecorys 05 May 2012 TSIA workshop Rabat /Tunis Ecorys 18-30 June 2013 1st Draft Final Report Ecorys 16 September 2013 Send draft inception report to Civil Society and/or summary 10 days before CSD EC and Ecorys 23 September 2013 Civil Society Dialogue EC and Ecorys 02 October 2013 afternoon 2nd Draft Final report (Final version) Ecorys 16 October 2013

Questions & Discussion

Contact us through:

W: www.trade-sia.com/morocco www.trade-sia.com/tunisia E: tsiamorocco@ecorys.com tsiatunisia@ecorys.com