30.4.2004   

EN

Official Journal of the European Union

C 110/1

1.1

The Schengen Convention, which is designed to permit the free movement of people and goods, was signed in 1995. The first signatories were Germany, France, Belgium, Luxemburg and the Netherlands, followed later by other EU countries, with the exception of Ireland and the United Kingdom; Norway and Iceland have also signed up to the agreement.

1.2

Although they have not signed the Schengen Convention on free movement, Ireland and the United Kingdom do also take part in EU security cooperation measures, especially in view of the reduction in security which may result from the free movement of people and goods.

1.3

The Schengen Convention stipulates which authorities have access to the Schengen Information System (SIS), as well as the purposes for which the data concerned may be used. The current text of the Convention does not allow vehicle registration authorities to access the SIS.

1.4

The Commission is intending to amend the Convention implementing the Schengen Agreement in order to include mechanisms in the legislation giving access rights to SIS data on stolen vehicles and trailers, and on stolen blank official documents and issued identity papers (passports, identity cards, driving licences). The aim is to make it possible to check whether vehicles presented for a second registration have been stolen, misappropriated or lost and also whether people applying for a registration certificate are using stolen identity or vehicle registration documents for this purpose.

1.5

This issue is all the more important given that around nine thousand vehicles stolen every day (approximately one every ten seconds); the number of requests submitted every day for vehicle registration totals around fifteen million, six to seven million of which involve second registration (1).

1.6

The Commission proposal has to be seen from a variety of viewpoints, particularly justice, moves to counter fraud, steps to strengthen the single market and transport policy.

2.1

The European Economic and Social Committee (EESC) agrees with the Commission's view that, given the scale of fraud and organised crime targeting such goods and equipment and the documents involved, access to the SIS should be broadened to include national authorities responsible for issuing and checking the above-mentioned documents.

2.2

The Committee feels that the Commission's aims in amending the Schengen Agreement, as proposed here, are relevant in that they enhance security and speed up justice procedures, since data protection is guaranteed by the system.

2.3

The EESC would draw attention to the need to ensure that the proposal under review is compatible with Member States' domestic rules and regulations.

2.4

The SIS is clearly Community-oriented and can only be used within the EEA (European Economic Area), as stipulated in the Schengen Convention itself; the EESC feels that this should continue to apply. It is a matter of concern to the EESC that cooperation arrangements with non-Member States in this sphere are poor, given that a large part of the traffic in stolen and misappropriated vehicles in the European Union takes place outside the Union's borders.

2.5

The EESC thinks that one of the ways of achieving this might be through cooperation with INTERPOL (involving 181 countries), using the Automated Search Facility (ASF) and EUROPOL; for these purposes, it would be enough to enter the information into the SIS and the other two systems at the same time. It is essential to enter this information swiftly, especially into the SIS, since the vehicles concerned are moved out of the EU's jurisdiction very quickly.

2.6

The Committee believes that Member States which are not signatories to the Schengen Convention should be given access to SIS data for this purpose, given that this is a security issue.

2.7

According to the Commission, the new Member States will only have access to SIS II data (in the new generation of the Information System) at the end of 2006. The Committee believes that these countries should be granted full access to the SIS as quickly as possible; this entails clear advantages for achieving the objectives pursued in applying the system.

2.8

The EESC is pleased that the proposal under review considers the fact that various Member States have private services responsible for vehicle registration; these private services may obtain the information necessary to carry out their work properly, indirectly through one of the public authorities with access to the SIS, guaranteeing data protection.

2.9

The Committee deems it to be especially important to secure mechanisms for restricting access to other information in the system to the administrative authorities possessing SIS access; out of a concern to safeguard the public's general rights, such information must be reserved for the authorities specified in Article 1 of the Schengen Convention.

2.10

The EESC welcomes the Commission's guarantee that the solution found will have no financial impact on the EU's budget, since the costs will be borne by the Member States.

2.11

The Committee also believes that statistical data on this type of crime should be compiled, processed and publicised so as to better organize the approach to tackling it.

3.1

The Committee believes that the very existence of this system and the easy access thereto granted to the authorities of various Member States will constitute an incentive to allow more free movement of vehicles within the Union, and will place a responsibility on national authorities to abolish certain kinds of domestic rules and regulations which make it difficult for their own nationals to use vehicles registered in another Member State.

3.2

Now that greater capacity is being introduced for monitoring and combating vehicle fraud and theft, the Commission must provide Member States with incentives to dismantle rules and regulations which make the use and movement of vehicles registered in another Member State difficult; the reasons for this are often purely tax-related and run counter to the provisions of the single market.

30.4.2004   

EN

Official Journal of the European Union

C 110/3

1.1

The Committee has pointed out in the past that human capital is the most sensitive and valuable resource for research and development and that it supports the Commission's efforts to maintain and develop human resources.

1.2

The Committee therefore welcomes the Commission's communication on problems facing career researchers in the EU as well as the proposals and initiatives it sets out. It wholeheartedly supports the Commission in its efforts to bring about substantial improvements to the current situation and calls on the Member States to contribute to this goal. There is an urgent need for action.

1.3

The Committee agrees with the Commission that improvements are needed both in relation to researchers' contracts and to the adaptation/portability of all aspects of social security and retirement provision, which are so important for all types of mobility.

1.4

As long as these requirements are not being met, as a result either of an incomplete European internal market or of inadequate arrangements in individual Member States, the Commission should, for example in the framework of its mobility programme, compensate as far as possible for the remaining shortcomings and create more far-reaching incentives. Family cohesion and related issues are particularly important here.

1.5

The Committee also points out, however, that the following incentives are needed if people are to embark on a career in research: attractive contracts for individual researchers reflecting the importance of research and development, and planning certainty for the funding of research institutes and industrial research laboratories, involving a long-term commitment. Research policy must not be a prey to short-term budgetary planning or policy experiments. Rather, it should set out appropriately to promote the potential and capacity of researchers on the basis of self-reliance and to the benefit of the community.

1.6

The greatest discoveries are not the result of specific goals but rather of attempts to reveal the laws of nature. Being able to do this with adequate resources and free of political interference is not only part of the fundamental freedom of research, but also — in an appropriate balance with targeted research and development — a precondition for future progress and prosperity.

1.7

The Committee is very concerned that in many Member States these conditions are not being met to a sufficient degree, if at all. Apart from the well known and serious economic consequences of this, this failure is also the source of a worrying brain drain, with the best young researchers leaving, usually for the USA.

1.8

The Committee therefore appeals to the Council, the Parliament and the Commission, but particularly to the Member States and European industry, to honour their repeatedly stated commitment to increase investment in research and technological development to 3 % of GDP by 2010. Investment in research and development which bears comparison with competing economies is a basic precondition for achieving the Lisbon objectives.

1.9

The Committee also supports the individual measures proposed by the Commission, such as the European Researcher's Charter and the Code of conduct for the recruitment of researchers. Both texts could be very helpful in many cases, with the strong reservation, however, that the application of these texts (as proposed by the Commission) must be voluntary and must on no account lead to over-regulation (excessive bureaucracy) in an area which is in any case in some respects already over-regulated.

1.10

The guiding principle of research policy must remain the Lisbon objectives. Thus, competition between research systems and institutions for the best structure, facilities and personnel policy must be allowed and supported and not hampered by over-regulation. The conduct of the majority will be guided by the example of the successful. The successful must be recognised, supported and allowed a free hand within ethical and legal limits.

1.11

Incentives and selection procedures for research careers, which should begin in schools, should be structured and achievements acknowledged in such a way that a sufficient number of the brightest and best will opt for an (academic) scientific training, with the pick of the bunch taking on a leading role.

1.12

As well as the researchers themselves, society also invests in the acquisition by researchers of the necessary broad and demanding basic and advanced specialised knowledge. Policy-makers, on behalf of society, thereby take on responsibility for ensuring that this investment is put to the best possible use. This must include providing researchers with appropriate career paths with attractive opportunities for branching out, without the danger of finding themselves at a dead end. The Committee supports the Commission in its efforts to carry out this task.

1.13

A very important aim, which is also stressed by the Commission, is improving career mobility between academia and industry and stepping up exchanges of staff. Despite progress in some areas much remains to be done. The significant increase in industry's commitment to research and development which is called for could contribute to this.

1.14

In order to protect researchers from an excessive burden of administrative tasks and problems, including related active and passive assessment procedures, a situation should be avoided where too many separate vertical as well as horizontal (parallel) approval and guidance bodies are involved, as this will not only unnecessarily reduce efficiency and place the most able under unnecessary work pressure but also lead to unclear and in some cases mutually contradictory requirements and decisions.

1.15

Society and policy-workers must ensure that the conditions for the emergence and continuation of excellence and top-level performance exist or where necessary, are created.

1.16

For its numerous specific comments and detailed recommendations the Committee would refer to the chapters of this opinion set out below.

2.1

In January 2000, the Commission adopted a Communication proposing the creation of a European Research Area (ERA) (1). The Committee adopted a comprehensive and supportive opinion (2) on the subject in which it addressed problems of mobility and those aspects connected with a career in science and suggested appropriate measures to deal with these problems. The Committee has since discussed the subject in opinions (3) on other Commission documents and suggested appropriate measures.

2.2

In this communication the Commission — in the context of the Lisbon objectives and the decisive role of research and development in achieving these — addresses the important question of professional and career opportunities for researchers in the European research area.

2.3

The Commission writes that ‘the Communication reveals structural weaknesses as well as marked differences concerning each of these elements, according to the sectors in which researchers operate or the geographical, legal, administrative and cultural environments in which they work. These differences and the lack of openness of researchers' careers in Europe, prevent the development of proper career perspectives at European level as well as the emergence of a real employment market for researchers in Europe, whether considered from a geographical, sectoral, or gender perspective. These differences also have significant repercussions on the attractiveness of young people for careers in RD, as well as on the overall public recognition of researchers’.

3.1

The communication aims to analyse the different elements which characterise the profession and defines the various factors which condition the development of researchers' careers at European level, namely: the role and nature of research training, the differences in recruitment methods, the contractual and budgetary dimension, and, finally, the evaluation mechanisms and the progress perspectives within the career. The communication is therefore very broad and comprehensive in its scope, making it extremely difficult to give a brief summary of its content - where this is not specifically discussed below.

3.2

The communication deals, inter alia, with the following main themes:

political background; definition of a researcher; career prospects; workforce needs; public recognition of careers in R&D; pathways between academia and industry; European dimension; gender differences; factors shaping careers in R&D; research training; environment; doctoral programmes; recruitment methods; employment and working conditions; deregulation in the academic career system; remuneration as career incentives; need for alternative tenure opportunities; evaluation systems; proposed actions and initiatives.

3.3

As part of the proposed measures and initiatives the Commission will, inter alia:

4.1

The ESC is extremely pleased that in its communication the Commission addresses the important and in the past neglected issue of research careers. The Committee entirely agrees with the Commission that ‘human resources are to a large extent the key of research efforts, excellence and performances’, and it supports the Commission in its objective of tackling this problem in a Community context. The Committee pointed out in an earlier opinion (4) that human capital is the most sensitive and the most valuable resource for research and development and that it therefore supports the Commission's efforts to enhance human resources. The Committee sees a need for clear improvements here and is glad that the Commission intends to act.

4.2

As well as the researchers themselves, society also invests in the acquisition by researchers of the necessary broad and demanding basic and advanced specialised knowledge. Policy-makers, on behalf of society, thereby take on responsibility for ensuring that this investment is put to the best possible use. This must include providing researchers with appropriate career paths with attractive opportunities for branching out, without the danger of finding themselves at a dead end. The Committee supports the Commission in its efforts to carry out this task.

4.3

But the Committee also points out that successful research and development requires appropriate, competitive, and unfortunately also often expensive equipment (large apparatus) and infrastructure. It also entails a demanding phase, extending over a period of years, of building the teams involved and getting them up to speed, while also requiring the necessary budgets for the scientific exploitation of these resources.

4.4

Political and business decisions are needed to conduct research on a broad and long-term basis, to provide sufficient resources to this end and to guarantee planning certainty. The latter factor in particular plays a decisive part in motivating young people to seek a career in research, i.e. in obtaining, retaining and making optimum use of human resources.

4.5

The Committee is therefore very concerned that these conditions are currently not being adequately met, if at all, in many Member States. Apart from the well known and serious economic consequences of this, this failure is also the source of a worrying brain drain (5), with the best young researchers leaving, usually for the USA.

4.6

The Committee therefore urgently appeals to the Council, the Parliament and the Commission, but particularly to the Member States, to honour their commitments, e.g. those entered into at the Barcelona European Council, and increase investment in research and technological development (RTD) to 3 % of GDP by 2010 and at the same time ensure planning certainty and research freedom — particularly with a view to sufficient fundamental research (6). Investment in research and development which bears comparison with competing economies (7) is the basic precondition for achieving the Lisbon objectives, i.e. making the European Union the most competitive and dynamic knowledge-based economy in the world by 2010.

4.7

The Committee would draw attention to its earlier recommendation (8) that increasing Community R&D investment by 50 % be made a medium-term policy objective for the period after the sixth R&D framework programme.

4.8

This must obviously be complemented by effective measures designed (i) to acquaint young people with science and research and (ii) to give greater weight to the teaching of science, technology and mathematics in school curricula and to present these subjects in an attractive way. Research and development are the foundation of our current way of life and they sow the seeds of future innovation, prosperity and peace (9).

4.9

There is, however, insufficient public awareness of the importance of, preconditions for, and scope of this issue. Its importance is also insufficiently reflected in school curricula and teaching.

4.10

As the Commission rightly points out, the motivation of talented young people to opt for an academic training leading to a career in research, and the subsequent career decisions of trained scientists as to the institution or country where they wish to work also depend on social attitudes and the importance which society attaches to these activities.

4.11

The value attached to research is reflected not only in public opinion but also in the continuity, reliability and firmness of political and business decisions. This is true both at Community level and especially in the Member States. Human resources, material resources and work opportunities offering the necessary scope for career development and their financing are closely interconnected factors (10).

4.12

If the will is there, if the necessary material conditions are met and the decision is taken to promote research and development at Community level and in the Member States (11), to reward researchers appropriately and to make a special effort in those Member States in which catching-up is needed, it will be easier to solve the other problems highlighted in the Commission's communication: ‘These differences and the lack of openness of researchers' careers in Europe, prevent the development of proper career perspectives at European level as well as the emergence of a real employment market for researchers in Europe, whether considered from a geographical, sectoral, or gender perspective’.

4.13

Careers in research in the European Research Area necessarily require mobility and flexibility. This should not, however, be at the expense of personal and family living conditions and social benefits. The Committee therefore supports the Commission in its objective of working towards a solution for the associated problems, and calling for/guaranteeing an appropriate and internationally competitive contractual status for researchers.

4.14

The Committee on the whole supports the measures and initiatives proposed and planned by the Commission. It doubts, however, whether they will be sufficient to enable the objectives set out in the communication to be met. The Committee considers the development of analytical studies, referred to several times in the communication, to be potentially helpful in individual cases but by no means sufficient.

4.15

Rather, the right political steps are needed, particularly on the part of the Member States. The communication contains no specific proposals to this end, however, or any discussion of the legal basis.

4.16

Calling for specific measures does not, however, imply over-regulation and resulting restrictions on the freedom to shape individual approaches or allow competition between alternative approaches.

4.17

The Committee therefore also recommends that the experience already accumulated in the implementation of thematic actions under the R&D and EURATOM framework programmes, the Socrates and Marie Curie programmes and the mobility programme (12) be exploited more than hitherto, and that in particular the experiences and problems of scientists with a ‘European’ career already behind them be taken into account. Possible legal obstacles (13) should be tackled at an early stage and appropriate solutions identified.

5.1.1

The Committee concurs with and endorses most of the content of Chapter 2 of the Commission communication.

5.1.1.1

The Committee understands why the Commission has used the OECD's definition of research from the 2002 Frascati Handbook: ‘Research and experimental development (R&D) comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.

5.1.1.2

The Committee nonetheless proposes that the Commission revise the definition particularly in view of the Lisbon objectives — to include key concepts such as science/nature and technology.

5.1.1.3

The decisive importance of sufficient non-commercial primary fundamental research (14) should be spelled out. The greatest discoveries are not the result of specific goals but rather of attempts to reveal the laws of nature. Being able to do this with adequate resources and free of political interference is not only an important part of the fundamental freedom of research, but also — in an appropriate balance with targeted research and development — a precondition for future progress and prosperity.

5.1.1.4

In this connection the Committee would refer to its earlier recommendation (15) supporting all measures which help to reduce the polarisation between the humanities, social sciences and economics on the one hand and sciences/technology on the other, and bring them closer together. This also includes two-way dialogue on issues such as methodology, conceptualisation, and the evaluation and verification of results.

5.1.1.5

Moreover, knowledge should not only be broadened but also deepened. The Committee recommends that these comments be taken into consideration when revising the definition.

5.1.1.6

The Committee also notes that the Commission's proposed definition of a researcher makes no mention of the high degree of proven knowledge, ability and independence required in order to qualify for the description ’researcher‘.

5.1.1.7

The Committee suggests the following slightly amended definition of researchers: ’Experts engaged in the conception or creation of new knowledge, products, processes, methods and systems, and in the management of the projects concerned, for which they are qualified by virtue of their training and experience‘.

5.1.1.8

Where not otherwise specified, references to researchers should be taken to mean scientists or engineers with the requisite qualifications.

5.1.2

The Committee would refer to the description of research and development which it formulated in an earlier opinion (16). In line with this description, the Committee also supports the Commission's intention of not restricting too greatly the possible career variants and paths in the R&D area.

5.1.3

Nevertheless, the Committee cannot in general concur with the statement that ’any of those careers will have to be treated and valued on equal footing‘. Rather, the important thing is to identify and recruit particularly inventive and creative (potential) researchers — in order to achieve the expected knowledge gain and economic added value for Europe — and to retain them. To do this exceptional opportunities and incentives will have to be created.

5.1.4

But these outstanding abilities and pioneering achievements are particularly difficult to pinpoint using conventional assessment models, which are moreover open to abuse.

5.1.4.1

One source of difficulties is the behaviour of certain authors who tend to quote each other in publications, forming a ’citation cartel‘ and thus procuring advantages for themselves in any schematic assessment.

5.1.4.2

Moreover, in some cases major discoveries have been published, recognised and quoted in the literature only after a certain delay.

5.1.4.3

Personality cannot be accurately assessed in a formal, schematic way. Rather, we must call on the experience and knowledge of the leading representatives of each branch of the scientific community in which achievements are being made or are expected (although even then mistakes, sometimes of historic proportions, are made).

5.1.5

In this context, with regard to the ’code of conduct for the recruitment of researchers‘ proposed by the Commission (see point 5.2.5), the Committee recommends that it be ensured that its — admittedly voluntary — application does not lead to over-regulation and thus rigidity.

5.1.5.1

The Committee does not deny, indeed it stresses, that transparency and equality of opportunity must be ensured for all applicants within the EU and above all the proportion of women applicants increased. In this context it acknowledges the potential usefulness of a code of this kind in achieving this important objective.

5.1.5.2

In view of the very varied requirements for their respective tasks and the different cultures of leading research organisations (17), however, the Committee recommends that the experience and knowledge of the relevant scientific community be exploited to complement formal, generalised assessment methods and recruitment procedures. Ultimately, it has to be ensured that European research institutions are attractive enough and that they have the will and the opportunity, as well as the scientific and administrative tools, to compete successfully against global competition for the world's best brains.

5.1.5.3

The Committee therefore recommends that individual instances where the wrong approach has been adopted or where mistakes have been made be dealt with on a case-by-case basis, and that general (over-)regulation be used only as a last resort.

5.1.6

The concept of ’equality of opportunity‘ is therefore also difficult to interpret in view of differences within the Member States and within the research fields, and a more flexible approach is therefore required.

5.1.7

With regard to the categories of research addressed, such as fundamental research, strategic research etc., and the definition of these, the Committee would refer to the recommendation made in earlier opinions (18), particularly with regard to the internationally accepted concept of ’applied research‘ which ought to be used (19), and it recommends that this question be re-examined at the appropriate time by a group of experts.

5.1.8.1

Actual research activity, i.e. work on scientific and technological problems, involves related planning, entrepreneurial, administrative and assessment tasks, which to a large extent can only be performed by scientists.

5.1.8.2

These include programme proposals, application procedures, reporting, publications, personnel decisions and related (active and passive) assessment procedures.

5.1.8.3

If, however, these tasks are required in an uncoordinated way of too many institutions and sponsors participating in the programme, in different formats and degrees of detail and with different timetables, the work involved will take up more of researchers' time than their actual research work.

5.1.8.4

In view of the proliferation of application, assessment and monitoring procedures, the Committee recommends that the Commission look into this question and work out coordinated procedures which strike a sensible balance and prevent a welter of paper-generating but unproductive activity (20). Any over-bureaucratisation of research must at all costs be reduced.

5.1.8.5

Here the Committee would recommend that the Commission also take a fresh look at its own application and award procedures and the criteria associated with these. The scientific community is often critical of these, and it is often asked whether such applications in view of the substantial amount of work involved and the very low success rate are still worth making. Also, procedures and criteria (e.g. for the award of grants) should not be changed too often.

5.1.8.6

It is also important to prevent the emergence of too many separate vertical (as well as horizontal/parallel) approval and guidance bodies (and procedures), as this will not only reduce efficiency but usually also lead to over-detailed, unclear and in some cases mutually contradictory requirements and decisions.

5.2.1

Prospective workforce needs in R&D: the Committee shares the Commission's concern about the clear and worrying discrepancy between macroeconomic analyses and forecasts (’job opportunities for thousands of researchers‘) on the one hand and less favourable actual labour market opportunities or lack of opportunities on the other. Most universities and research institutions are at present actually experiencing reductions in private and public-sector budgets and are therefore unwilling to recruit new staff, and even less willing to offer long-term employment contracts.

5.2.1.1

Even industry, e.g. the very research-intensive pharmaceuticals industry, has difficulty in keeping young researchers in Europe (21).

5.2.1.2

Moreover, publicly funded universities and research institutions are required by their funding bodies to employ a significant proportion of their scientists on a series of temporary contracts, so as to be able to react more quickly to budget cuts or imposed programme changes.

5.2.2

In this connection, the Committee would highlight another important aspect: scientists working in academia or publicly funded research institutions are usually paid in accordance with public-sector pay scales.

5.2.2.1

These rates of pay are generally significantly lower than in the private sector. The Committee endorses the Commission's statement that: ’Salaries constitute one of the most visible issues of career recognition. Salaries of researchers seem to have fallen behind, for example in comparison with those who are engaged in management positions‘.

5.2.2.2

Lower public-sector pay scales are normally justified by the generally greater security of public-sector careers (civil servant, teacher, judge etc.).

5.2.3

Many scientists are, however, deliberately denied this higher level of job security on grounds of greater flexibility in the planning of research, budgeting and personnel policy.

5.2.3.1

This disadvantage is, however, by no means counterbalanced by other advantages or guarantees. A further problem is that salary ranges are not sufficiently wide to take proper account of performance and commitment.

5.2.3.2

It would, however, be wrong to seek to impose temporary contracts, with all their consequences, in order to achieve the flexibility and mobility which is genuinely needed in the research field, while pay also remains inadequate.

5.2.3.3

What is therefore actually needed is more appropriate rates of pay, with the range substantially extended at the upper (and only the upper) end and greater flexibility for adaptation to individual cases. This would make it possible to achieve the objectives referred to above by incentive. Universities and research institutions therefore need more post-doctoral openings with reliable tenure track conditions. The current lack of appropriate opportunities and career prospects, together with the risk of unemployment, are the main reason why the best researchers are currently seeking to build their future in the USA (22) and are hardly likely to return.

5.2.3.4

The problem has hitherto been compounded in the case of scientific researchers who have to undergo a long period of training (doctorate, qualification as university lecturer). Here change is urgently needed if research is to be made attractive as a career.

5.2.3.5

A typically (23) discouraging feature of the ’career‘ of young research scientists is the fact that initially

and again after every change of job or ’career move‘

they are often given temporary contracts (24) (e.g. for a total of up to 12 years).

5.2.3.6

Once these contracts end, which in most cases has nothing to do with unsatisfactory performance but is, rather, dictated by administrative rules or rules on staff rotation and particularly by budget cuts, researchers consequently risk having to abandon their research careers, or in many cases even becoming unemployed.

5.2.3.7

Researchers with this kind of contract therefore run the risk of reaching a career dead end at an age (e.g. around 40) where changing direction and making a new start on the labour market is already extremely difficult, in part because of industry recruitment policies which favour recent graduates.

5.2.3.8

It should also be pointed out that these same research scientists have often passed a strict, multi-stage selection procedure, as only the best are offered the opportunity to undertake doctoral research after graduation and only the best of the best are later offered a research post or junior lectureship.

5.2.3.9

In order to achieve competence and efficiency, let alone a leading position in a particular area of science, individuals and groups must first undertake demanding further training and work experience, usually over a period of years.

5.2.3.10

Furthermore, it is often necessary to develop and set up costly equipment and to establish a stimulating research climate, with all the associated organisational structures. This heavy investment in human capital and the necessary research infrastructure is another result of research which, in addition to the actual research findings, would be available for further exploitation.

5.2.4

Unemployment among well trained research scientists is therefore not only a social problem but also a loss to the economy of financial and human resources.

5.2.4.1

It is not only demotivating for the researchers affected or liable to be affected, but also a disincentive to students, when considering their field of study and future career, to opt for a difficult and demanding discipline. A further demotivating factor is the gap between enticingly upbeat public pronouncements and the off-putting — and in some Member States almost disastrous — reality of the labour market and career prospects.

5.2.4.2

In this sense, the fact that many scientists, particularly young scientists, at present seek and find job opportunities suited to their abilities outside the EU, above all in the USA, is in fact to be welcomed, at least for as long as European institutions are unable to offer them appropriate openings. The fact that this is enormously damaging to the EU and highly advantageous to the host country should be made clearer in policy-making circles and to the general public.

5.2.4.3

The lack of economic attractiveness and considerable social risks of a career in research may be one of the reasons why, even at secondary school stage, so few children are interested in science and mathematics.

5.2.4.4

It is therefore hardly surprising, at times when research scientists are in demand, that there is a sudden perceived lack of human capital (see basic underlying premise of the Commission communication).

5.2.5

As the Commission points out, it is therefore essential in the interests of the career prospects of researchers and for the achievement of the 3 % target (25), to reduce the apparent divergence between economic needs in the EU on the one hand and microeconomic and fiscal behaviour (e.g. government), and the resulting personnel policies, on the other.

5.2.5.1

Research should therefore not be regarded in a proprietorial way. It should not be a prey to short-term policy experiments or budget constraints. Good and successful research must be long-term and should not be started, ended or redirected on a whim, e.g. as a result of economic cycles, budget crises or current political or planning trends; rather, it requires continuity, freedom and certainty. Only then will it be possible to eliminate the problems outlined above and prevent them occurring in the future.

5.2.5.2

As the Commission states, there is moreover an urgent need for suitable curricula and opportunities for branching out in order to avoid this kind of career dead-end, and instead to offer young people facing a career choice attractive and secure prospects.

5.2.5.3

It would also be helpful to promote greater mobility towards industry (see point 5.4) and teaching (e.g. making it possible to employ researchers for whom no stable employment is available at universities or publicly funded research institutions as teachers with research experience in higher educational institutions, particularly in view of the frequent lack of suitably trained staff with research experience).

5.2.6

The Committee therefore particularly welcomes the measures set out in the Commission's communication:

However, the Committee recommends that its comments on these issues be taken into account.

5.2.6.1

The Committee recommends that the initiatives launched in some Member States (26) in higher education be extended to non-university research organisations, and that care be taken to check whether the measures (27) actually lead to the hoped-for improvements.

5.3.1

Public recognition of research is an extraordinarily important factor. The Committee wholeheartedly endorses the Commission's statement that ’The issue of public support for researchers is clearly linked to the ways science is perceived as a means to contribute to the development of society‘.

5.3.2

The Committee also endorses the other points made in Chapter 3.2 of the communication. It would also point out, however, that the problems and difficulties of a career in European research, which the Commission communication sets out to overcome, are connected with the still unrealised completion of the internal market and are not sufficiently understood by the public, or in many cases even by politicians. There is therefore a particular need for politicians to be properly informed.

5.3.3

It would, however, be an oversimplification to seek the nub of the problem in a lack of public understanding and recognition of the importance of research and development.

5.3.4

Although it is true that the public are in general not sufficiently aware of the extent to which their prosperity is based on past research and development achievements, the majority of people do nonetheless have a degree of respect for researchers and their abilities.

5.3.5

The real problem is ensuring that politicians make consistent efforts to improve the personal and professional situation of researchers and to eliminate the disadvantages referred to above. The problems referred to above may also contribute to the lack of appreciation of researchers.

5.3.6

Ensuring that the necessary political will is there is unfortunately made more difficult by the fact that the promotion of research and development, and thus of careers in research, does not generally enjoy the kind of media coverage and hence public awareness which is needed in political terms; another problem is that researchers are too few in number to defend their professional and social interests in a sufficiently forceful and organised way.

5.3.7

Another related problem is the fact that the time lag between investment in research and development and tangible economic and cultural benefits is rather long and usually exceeds society's political attention span; also that the importance and potential of new discoveries usually filter only gradually into the public awareness rather than emerging suddenly and dramatically.

5.3.8

The Committee therefore fully supports the Commission's statement that: ’In order to raise the political significance of research as crucial to the development of society, the link between the content of research and the net benefit to society must be clearly highlighted. Likewise, society should be better placed to recognise the role of research, the relevance of doing research and the value of careers in R&D.‘ Society should also be aware of the necessary operational conditions for excellent research.

5.4.1

On this subject the Commission states that: ’Collaborative partnerships between academia and industry or private and public funded research organisations have emerged as a critical imperative necessary to sustain transfer of knowledge and innovation but it is still unclear how to structure such relationships, let alone how to exchange personnel or to promote common training programmes.‘ The Committee endorses this statement to a great extent, although it no longer regards the situation quite so critically.

5.4.2

However, the Committee also recognises the need for further improvements and for a better mutual understanding of working methods and career criteria.

5.4.2.1

An important question in relation to the desired curricula is why industry, when recruiting scientists and engineers, generally prefers recent graduates rather than experts with years of additional research experience, although their superior knowledge would accelerate the knowledge transfer of the most up-to-date methods and procedures.

5.4.2.2

The Committee here reiterates its previous recommendation (28) that the existing mobility programme (’industry host fellowships‘) be modified and stepped up, to provide those willing to consider this option with definite incentives for the required mobility, making sufficiently long exchange periods possible, and long-term exchange attractive for both sides. This could also create an incentive for industry to recruit older, experienced scientists.

5.4.3

In individual cases there has been progress. The obstacles described in the communication are, for example, less significant in relations between industry and technically orientated higher educational or research institutions.

5.4.4

But here too there is a need to ensure both national and European compatibility and portability/recognition of the various components of social security (such as sickness insurance, invalidity insurance, retirement provision, qualifying periods of work conferring pension rights, recognition of previous periods of pensionable service etc.).

5.4.5

Finally, it should be recognised that there are different kinds of gift and ability, some of which are particularly useful to industry where they can develop to the full, and others which are more suitable to a scientific university environment.

5.5.1

The opportunities are to be found in a significantly enlarged employment market, which is particularly important for highly specialised experts, as well as being personally and economically important. Moreover, the importance of more European research careers should be stressed in achieving the Commission's objective (29), which the Committee supports, of ’a stock of material resources and facilities at the European level‘.

5.5.2

The risk is whether professional experience accumulated in another Member State will be appreciated and recognised on the ’home market‘, with consequent career advantages, as well as in the lack of compatibility/portability/recognition of the various aspects of social security (such as sickness insurance, invalidity insurance, retirement provision, qualifying periods of work conferring pension rights, recognition of previous periods of pensionable service etc.).

5.5.3

This requires appropriate measures ensuring that changes of employer and place/Member State of employment, and movements between publicly funded research institutions in various Member States and industry etc., which are a typical and desirable feature of the career of a ’European‘ researcher, should not, as has often been the case in the past, be disadvantageous in relation to the requirements outlined above.

5.5.4

Specific solutions need to be identified and implemented if the objectives set in the Commission's communication are to be achieved.

5.5.5

Apart from implementing the relevant research programmes, it is therefore also necessary to make allowance for the personal circumstances typical of a career in European research, inter alia in relation to: pension arrangements, sickness insurance(!), the cost of removals, estate agents' fees, house purchase and renovation costs, children's education, family cohesion(!), unemployment and invalidity insurance, retirement provision, as well as tax-related (30) questions. Many existing laws, e.g. taxes on land purchase, are unfavourable to mobility.

5.5.5.1

A pan-European system of retirement pensions should, in particular, be established or, where already adopted, actually applied, so that pension rights can be retained in full or transferred on changing employer or Member State, without any overall financial loss to the researcher.

5.5.5.2

Another general problem is the researcher's spouse's or partner's job. In order not to jeopardise family cohesion, efforts should be made to identify or create suitable employment opportunities for partners. An official strategy (31) should be drawn up in this area.

5.5.6

This view is shared to a great extent by the Commission, which writes in its communication: ’Finally, the promotion of the European dimension in R&D careers needs to be embedded in a structured and co-ordinated legal framework at European level which should guarantee researchers and their families a high level of social security thus minimising the risk (Committee's comment: the risk should be eliminated!) of losing already acquired social security rights. Within this context researchers should be able to benefit from the ongoing work at EU level aiming to modernise and simplify the co-ordination of the social security systems … In this framework the specific needs of researchers and their families should be taken fully into account.‘

5.5.7

The Committee nonetheless recommends that, as long as these objectives have not been achieved or until the proposed arrangements have entered into force, the relevant mobility programmes and their provisions be developed in such a way that they not only compensate for existing disadvantages but actually create additional, further-reaching incentives. Incentives of this kind are necessary both in order to make a European research career attractive even for top scientists and in order perhaps to attract such scientists (back) from the USA after all, for example.

5.5.8

In order to make the expansion of the limited employment market (for scientists/researchers) arising from the realisation of the European Research Area even more effective, the Committee recommends that the Commission systematically develop and improve its existing Internet platform (32) — so as to ensure that all relevant job offers in the EU by research institutions, projects and universities as well as firms are listed in an organised way and with sufficient detail. (This should also be stipulated in the ’Charter‘.) The Committee proposes that contact be made with institutions performing this task in the Member States.

5.6.1

In order to be offered the opportunity to undertake a doctoral research programme, a candidate usually needs a first-class degree.

5.6.2

Accordingly, obtaining a doctorate can be regarded on the one hand as a further stage of academic training, and on the other above all as a passport to an independent research career.

5.6.3

Doctoral theses also entail the acquisition of other important general skills, such as the ability to carry out in-depth research, the ability to present particularly complex issues clearly in writing and orally, and, in the field of science and technology, and particularly in an international environment, use of the English language.

5.6.4

Doctoral researchers, as the ’rank and file‘ (33) of academic research, make an essential and significant contribution to research activity and thus to the objective of universities and similar research institutions.

5.6.5

Doctoral researchers therefore have a strong but usually unfulfilled claim to have their work (34) recognised as a fully-fledged professional activity (pay, social benefits).

5.6.6

An inescapable feature of doctoral research is a degree of dependence on a supervisor, who is largely responsible for the assessment of the thesis.

5.6.6.1

The task and methods of supervisors should not, however, go so far that they remove the incentive, or even the need, for independent action on the part of the researcher, which is after all a qualification for the job.

5.6.6.2

Although in most cases the function and task performed by the supervisor are extremely helpful, in individual cases these may be abused. This may, for example, be a result of the inadequate remuneration of the doctoral researchers, leading to inappropriately heavy demands, essentially serving the scientific interests of the supervisor, and resulting in an excessively long period of research.

5.6.7

The Committee therefore recommends that the Commission consider a code of conduct on the role and treatment of doctoral researchers, that it initiate discussions on the subject and that the results be incorporated into the Charter.

5.6.8

In its communication the Commission also states that: ’industry seems eager to employ researchers without doctoral degrees, considering that those with a doctoral degree are too specialised (35)‘.

5.6.9

Although it is a regrettable reality, and an obstacle to mobility between academia and industry, that industry prefers to recruit young recent graduates, the Committee cannot concur with this statement in its sweeping generality. In the chemical industry in some Member States and other scientifically and technically orientated sectors a doctorate, and a good one at that, if not an actual precondition for employment, is generally at least an important requirement for a successful career. (This does not generally apply to engineers.)

5.6.10

A doctorate is at all events a precondition for an academic career, including a career in publicly funded research institutions. (This does not generally apply to engineers.)

5.7.1

When young people opt for a career in research and decide where they would eventually like to work, one important criterion is whether that country has attractive institutions of excellence in their field, where they can work alongside the most successful scientists, who serve as role models and set standards.

5.7.2

Society and politicians must therefore ensure that the conditions are in place, or are created, to nurture excellence and top-level performance.

5.7.3

However, excellence and the creation of elites are the result of a complex, laborious and lengthy process of development and selection which follows its own rules and depends on the conjunction of many important and interlinked factors.

5.7.4

Decisive among these are the outstanding examples set by particularly successful researchers, the attractiveness of facilities, management which fosters creativity and a wealth of ideas, the feeling of being involved in discovery or development and the reasonable expectation of all concerned to be able to develop their own potential and to contribute their own ideas, thereby gaining recognition.

5.7.5

All this can only develop and thrive on the basis of solid, broad and high-calibre university education combined with a varied research environment including a sufficient amount of pure research.

5.8.1

The Committee welcomes and endorses the Commission's intention to organise a European Year of the Researcher in the near future.

5.8.2

The Committee sees this as a good opportunity to promote the research profession and its importance for society and the Lisbon objectives, as well as to strive for deeper mutual understanding between civil society and the scientific community.

5.8.3

The Committee recommends involving the relevant organisations in the Member States and scientific organisations operating at European level in this task and declares its willingness to play its own part in so doing.

30.4.2004   

EN

Official Journal of the European Union

C 110/14

1.1

The proposal for a European Parliament and Council decision codifies Council Decision 78/774/EEC of 19 September 1978 (1) concerning the activities of certain third countries in the field of cargo shipping, as heavily amended in particular by Council Decision 89/242/EEC of 5 April 1989 (2) on the same subject.

1.2

The legal basis for the codified text is provided by an internal decision of the Commission of 1 April 1987 (3), as reaffirmed in the conclusions of the Presidency of the Edinburgh European Council of December 1992 (part A, annex 3). The codification exercise is commensurate with the Communication from the Commission to the European Parliament and the Council on the codification of the acquis communautaire (4), i.e. it does not change the law while being subject to the procedure for the adoption of legislation in force at the moment of codification.

1.3

The procedure for adopting codified legislation in this case (cargo shipping) is laid down by Articles 80 and 251 TEC.

2.1

The EESC has already expressed its views in various past opinions (5) on the substance of the matter dealt with in the codified text, which incorporates — without making any substantive changes — earlier texts designed to identify possible dumping practices introduced by certain third countries in the field of cargo shipping that harm the interests of Community operators, with a view to taking appropriate countermeasures, if need be. There is therefore no point in referring again to the substance of the matter.

2.2

The codification exercise — which concerns in particular provisions amended in the course of time and scattered between the original act and subsequent amending acts — seeks to improve the clarity and transparency of Community law; it will therefore provide additional legal certainty at the time of codification for the persons to whom Community legislation is addressed and who use Community legislation.

2.3

The Committee approves and encourage the work to simplify the acquis communautaire, and especially the procedures for consolidating and codifying existing legislation. This work contributes to good democratic governance by making it easier to understand the acquis communautaire and apply it properly.

2.4

In the present case, the codification proposal is based on a preliminary consolidation exercise carried out by the Office for Official Publications of the European Communities. An appended table indicates the correlation between the old and new numbers of the Decision's articles.

2.5

The proposed legal basis and legislative procedure are fully in accordance with Community law.

2.6

The Committee approves and therefore supports the codification proposal on which it has been consulted, and recommends its adoption.

30.4.2004   

EN

Official Journal of the European Union

C 110/16

1.1

Council Directive 96/62/EC on ambient air quality assessment and management (the Air Quality Framework Directive) provides a framework for future EC legislation on air quality.

1.2

Annex 1 of Directive 96/62/EC contains a provision for regulating ambient air quality of arsenic, cadmium, mercury, nickel and polycyclic aromatic hydrocarbons (PAH) by setting out criteria and techniques for assessing ambient air quality, and laying down provisions for forwarding information to the Commission and the public.

1.3

This Commission Proposal fulfils the obligations under Directive 96/62/EC by introducing legislation for those heavy metals mentioned in Annex I which are recognised as being either known or suspected human carcinogens for which no threshold levels for adverse effects on human health have been identified.

2.1

The Commission proposal recognises there are no cost-effective measures to attain everywhere the concentration levels that would not give rise to harmful effects on human health. It therefore does not strictly follow Directive 96/62/EC which foresees the setting of binding limit values.

2.2

The proposal foresees mandatory monitoring where concentrations exceed the following assessment thresholds:

Concentrations below these levels would minimise harmful effects on human health. Therefore, only indicative monitoring of concentration of these heavy metals at a limited number of specific sites is required when the above assessment thresholds are not exceeded.

2.3

Regarding mercury, the Commission considers that the evidence for total exposure should be reviewed in due course and that this review should give particular emphasis to source-receptor relationships and the transformation of mercury in the environment.

2.4

Member States must inform the Commission and the public on any exceedance of the target value, the reasons thereof and any measures taken.

3.1

The Committee appreciates that because there are no known threshold levels for estimating adverse effects on human health, setting targets is especially difficult. Given that the impact on human health and the environment from these pollutants occurs via concentrations in ambient air and via deposition to terrestrial and aquatic environments and that the deposition to the terrestrial environment can also effect soil quality and fertility and the contamination of vegetation, the Committee therefore welcomes the Commission's proposal.

3.2

The Committee agrees with the Commission's evaluation that its proposal is ‘ambitious and practical’. It therefore also considers that it is essential that the objectives should be reviewed in due course as there are many issues concerning the fate and behaviour of heavy metals and POP compounds that are still poorly understood, in particular with regard to mercury.

4.1

The Committee underlines the need to recognise that reported ambient air concentrations in the proposal are mean values across the EU-15 which are known to vary spatially and for some pollutants seasonally. For example, the heavier PAH compound BaP has significantly higher winter concentrations resulting from increased fuel combustion for domestic heating. This may result in the exceedence of the target level for a significant proportion of the year although the annual average value may show compliance with the threshold.

4.1.1

It is also likely that the proposed assessment threshold values for the metals (and the target value for BaP) will be exceeded close to certain industrial installations and in rural locations during the winter months when demand for space heating is high. As a consequence, there will be a number of sub-populations within the EU that may be consistently exposed to ambient air pollution at levels above the desirable limits. These proposals, therefore, do not provide adequate protection (certainly in the short-term) for some members of the population.

4.2

The Committee believes that as the emission data produced in the proposed directive have been taken from the reference year of 1990, the Commission should consider the need for including more contemporary data which will identify trends over the last decade or so. In this way any reductions in key source groups could also be identified.

4.3

BaP has been chosen as an indicator of carcinogenic risk, although it is only one of 16 commonly measured priority PAH compounds. The UN/ECE list, for example, includes three further indicator compounds. The EESC believes that in order to ensure that the 4th daughter directive is compatible (and comparable) with other international agreements (such as the UN/ECE POPs protocol) other PAH compounds should be considered for inclusion in the directive.

4.4

The Committee believes that diffusive sources such as domestic heating, (important for PAH compounds), are more difficult to control and hence incur greater cost. Other measures aimed at controlling mobile emissions (e.g. improving fuel quality to reduce particulate emissions) will also help to reduce ambient air concentrations. It appears that domestic stove/burner optimisation for controlling BaP emissions would be beneficial for reducing exposure, particularly in rural areas. Retrospective upgrades to existing stoves are likely to be excessively expensive but specifications for new stoves, boilers and heating appliances should be provided to ensure future emissions are reduced.

4.5

The Committee believes that it is clear that further assessment of the potential sources of these pollutants within the ten Accession Countries is required and that emissions from these countries are likely to affect ambient air quality across the whole of Europe. Accession countries must therefore be encouraged, and where necessary assisted, to comply with the directive in a timely manner to ensure that cross-boundary pollution is minimised.

4.6

The Committee understands that the cost-benefit calculations suggest that the costs for upgrading key sources would require considerable investment. This investment could potentially have serious consequences for industry leading to the loss of competitiveness. The Commission must therefore ensure that when implementing the directive, a balance between economic impacts and positive health benefits must be struck even if difficult steps may be required to improve air quality, reduce exposure and improve human health.

4.7

The Committee also believes that an important part of the implementation of this proposed 4th daughter directive will be the provision of information to the public on local air quality issues with respect to these pollutants. It is imperative, however, that the public are also provided with the necessary tools to interpret and understand these data.

30.4.2004   

EN

Official Journal of the European Union

C 110/18

1.1

The EESC welcomes in principle the Commission's Regulation with its emphasis on nutrition and health. It comes at a time when the WHO (Europe Region) has pointed out that up to 20 %-30 % of adults are overweight and that poor diet and lack of physical activity are also linked with cardiovascular disease. Governments too are increasingly recognising that there is a connection between the foods people eat and the health and well-being they enjoy, as well as the consequences of ill-health to national economies.

1.2

The proposal for a Regulation on nutrition and health claims made on food also comes at a time when diet, dieting and health awareness are receiving prominent news coverage, with consumers needing accurate, substantiated information more than ever before to enable them to make informed choices and decisions. For the EESC, consumer information and protection are of the highest importance.

1.3

In the light of this background, the Commission has proposed in the first instance, as a supplement to Directive 2000/13/EEC (relating to the labelling, presentation and advertising of foodstuffs), this Regulation setting out criteria for producers who wish voluntarily to make claims. In doing so, its intention is to both create a level playing field in an area where interpretation varies and to provide for non-biased information to consumers, thereby overcoming some of the lack of clarity in this regard caused by the present Advertising Directive.

2.1

Directive 2000/13/EC generally prohibits the use of information that would mislead the purchaser or attribute medicinal properties to food. The new regulation would provide more specific guidance concerning nutrition and health claims. This has been proven necessary because of a growing number of such claims, some of which are dubious due to a lack of clear scientific evidence to support these claims. Moreover, consumers are often confused by current labelling (1).

2.2

The main objectives of this proposal are the following:

2.3

Article 3 of the proposed Regulation provides that the use of nutrition and health claims shall not:

2.4

Article 4 provides for a minimum nutritional profile which foods must have in order to carry nutrition or health claims — for example alcoholic drinks may not carry health claims or nutritional claims except in cases where there is reduced alcohol or energy content.

2.5

Nutrition and health claims can only be made if science can show a beneficial nutritional or physiological effect, as established by generally accepted scientific data updated in line with technological advances and where the impact is significant and the claim is understandable by the consumer.

2.6

Health claims have to be accompanied by further information, for example when referring to diet and lifestyle.

2.7

Claims about psychological or behavioural functions will not be permitted, nor on slimming or weight control nor referring to health professionals or charities and it must not be suggested that health could be affected by not consuming the food. Reduction of disease risk claims must be authorised through the European Food Safety Authority (EFSA) as long as it is also made clear that diseases have multiple risk factors.

2.8

The Annex lists nutrition claims and conditions applying to them.

3.1

The EESC welcomes the proposal for a European regulatory framework both in the interest of consumer protection and of harmonisation in the internal market. It recognises the need to address the issue of different national rules operating at the moment through self-regulatory national codes of practice. The new Regulation will provide the necessary legislative instrument so that the direct effect of desired outcomes is guaranteed evenly across all Member States.

3.2

It is possible, however, that imported products may breach the Regulation in terms of both claims and labelling by appearing only in non-European languages. There is concern too over products obtained through the internet from non-EU sources.

3.3

The EESC stresses the need for legislation to be proportionate, predictable, properly enforced — and above all practical, and expresses concern that some of the provisions relating to the substantiation of claims may be unnecessarily complex and even cumbersome. Workable procedures with clear timetables that avoid unnecessary delays in the approval process are needed. The EESC also questions whether the operative burden on the EFSA will be excessive.

3.4

The EESC points out that legislation must go hand in hand with life-long consumer education which includes the acceptance of personal responsibility. At a time when obesity in particular is rapidly increasing even in young children, the importance of achieving a balanced diet must be emphasised — yet without taking away enjoyment of good food and drink. It must also go hand in hand with exercise. The EESC recognises the challenge in reaching consumers with this essential message of balance, moderation and avoidance of excess.

3.5

Nevertheless, it accepts the need for responsibility to be taken — and coordinated wherever possible — by all interested stakeholders: producers, distributors and retailers, enforcement bodies such as trading standards, government departments, relevant professional, social and consumer organisations. The support of the mass media, is essential in providing ‘popular’ communication.

3.6

The EESC also stresses the need to encourage individual Member States to develop consumer education programmes in schools, integrated into existing subjects such as Language, Home Economics or Citizenship and starting with the youngest children. Other groups such as older people, disabled groups and ethnic minorities, also need particular help provided through the support of local social organisations. Examples of existing best practice could be collected and collated at a European level.

3.6.1

The EESC encourages the Commission to promote campaigns on health and nutrition through its public health programme.

3.7

The EESC would emphasise the value of an overall well-balanced and moderated diet rather than too much designation of foods as ‘good’ or ‘bad’. The Commission must be more specific in its proposals in Article 4 on nutritional profiling so that producers know exactly where they stand.

4.1

Article 1, Para 2. The EESC endorses the inclusion of claims relating to mass catering in hospitals, restaurants and schools in view of the large number of consumers involved, many of them vulnerable. But it questions the practicality of the proposal both in its implementation and enforcement.

4.1.1

Para 4. The EESC points to the special importance of foods for the particular nutritional needs of vulnerable categories of consumers.

4.2

Article 2, Definitions, para 1. The EESC questions whether brand names may be developed to express particular nutritional or medical characteristics in order to avoid justifying implicit claims.

4.2.1

Para 2. Sodium is included among the nutrients listed. References, to both salt and sodium are confusing and must be clarified.

4.2.2

Para 3. The definition supplied is vague and difficult to pin down. In order to put this right, it should specify that is referring to any substance that has a nutritional or physiological effect, including probiotic factors and enzymes contained in many foods such as yoghurt, honey, etc.‘

4.2.3

Para 8. The EESC notes that the Commission takes its definition of ’average consumer‘ from that developed by the European Court of Justice. It remains concerned that there will be many semi-literate/semi-numerate consumers with limited education and knowledge about food who are not capable of understanding either the implications of certain claims, especially those including percentages, or their supportive labelling.

4.3

Article 4. Para 1. The EESC appreciates the fact that this Article on nutritional profiling did not feature in the original draft of the proposal. Though it is endorsed by the WHO and Member States, the food industry regards it as impractical and unnecessarily restrictive, believing that consumers should themselves bear responsibility for their own choices of overall diet. Nevertheless, the EESC accepts that consumers are so highly influenced by claims for the particular and substantiated benefits of foods, which are, for example, low in fat, sugar or salt that they may ignore the possibility that such foods may also be high in certain other undesirable nutrients. (e.g. ice cream dessert which is bought because it is 98 % fat-free and yet contains enormous amounts of sugar unrecognised by consumers.). The Commission's proposal indicates that the emphasis on one substantiated ’virtue‘ of a product, omitting its other ’vices‘, may be true and accurate but nevertheless misleading to consumers.

4.3.1

The EESC therefore urges the Commission to be much clearer in its proposals for nutritional profiling, and as an interim compromise to place limits on the bearing of health claims on food products with ingredients where there is a pattern of over consumption and an undesirable impact on health.

4.3.2

The EESC recognises that there will be grey areas with some products being borderline (such as fruit juices and full-cream milk) which will require special appraisal by the EFSA.

4.4

Article 6 Para 3. The role of ’competent authorities‘, also referred to in Article 24, should be amplified, and their relationship with the EFSA defined.

4.5

Chapter 3. The EESC endorses the need for comparisons to be made, but points out that the print size in which an actual comparison is made should be legible. (e.g. the label ’30 % less fat‘ and in minute letters ’compared with the standard brand‘). Moreover, the proposal should make it clear that producers do not need to list things which are not there (e.g. ’This product does not contain Vitamin A or C.‘)

4.6

Chapter 4, Article 10. The EESC welcomes the specific conditions that health claims must meet on the grounds that greater care is needed with products where there is the possibility of a higher degree of emotion involved in choice and greater ignorance of scientific terms. It urges the Commission to ensure that claims relate to the actual product promoted, and not to another product used with it — e.g. some breakfast cereals claim to contribute towards maintaining ’healthy bones‘, whereas it is the milk used which provides the calcium content.

4.7

Article 11, Para 1 d). The EESC recognises the role of certain professional organisations and charities in promoting a healthier diet as a means of preventing specific diseases. Their contribution in providing specialist advice is welcomed. Nevertheless, their possible dependence on financial support or sponsorship should be monitored as they may provide endorsements for foods which are simply promotional deals not based on any set standards or open to other competing brands. Moreover, clear criteria must be developed concerning the acceptability of sponsorship.

4.8

The EESC asks the question whether some claims for general health or well-being (for example ’no colourings‘) and some slimming claims could be acceptable if they comply with the conditions set down.

4.9

Article 14, Para 1.c). Here and elsewhere there are references to availability of documentation to the public. The EESC approves such publicity but hopes that efforts will be made to reach the public at large (see also Article 15 point 6, and Article 17 point 2).

4.9.1

Para 2. The EESC questions whether procedures for compliance laid down by the Commission are unnecessarily complex. Prior approval arrangements could be modified and more reliance placed on EFSA's Register. It also asks whether the functioning of the EFSA will be slowed down by these new procedures. The wording of paragraph 2 needs to be clarified and the EESC proposes that only the claims need to be translated into the EU's official languages and industry needs flexibility in translation for marketing purposes. Likewise in Article 15 it asks whether timescales are reasonable or too time-consuming, with unnecessary delays in the approval process as paragraphs 1 and 2 leave the control of timing in the hands of EFSA.

4.10

ANNEX, The EESC welcomes in principle the inclusion of the Annex which attempts to clarify definitions and provide a practical guide for producers to follow. It recognises the need in a global society for this Annex to take full account of the recommendations of the Codex Alimentarius and of the World Health Organisation (WHO). It also asks the Commission to initiate an immediate and detailed expert refinement of each clause (e.g. on the use of ’natural‘) before the Regulation is adopted and therefore finally closed. It disputes the interpretation of ’light/lite‘ on the grounds that consumers are more likely to understand it as meaning ’low‘ rather than ’reduced‘, as the Commission proposes.

5.1

The EESC regards the present proposal as an important step forward both in consumer protection and in the harmonisation of rules in the internal market. It looks forward progress on nutritional labelling, while recognising that this is not the only solution to the problem of communicating with consumers.

5.2

It supports the general aims of the present proposal, but suggests the need for simplification of procedures and a careful scrutiny of timescales. Moreover, the EESC here recommends certain compromises, which may be needed to balance the requirements of consumers for more substantiated information and the needs of industry to operate in a market free from excessive constraints. It stresses the important contribution of consumer education and the role that all stakeholders have to play in providing it.

30.4.2004   

EN

Official Journal of the European Union

C 110/22

1.1

The recent outbreaks of foot-and-mouth disease (FMD) and also classical swine fever (CSF) have prompted a thorough review of Community measures to prevent and combat these diseases. As part of the response to possible future outbreaks the Commission is proposing to rationalise, strengthen and update the legislation governing the importation into the Community of wild and domestic animals of species susceptible to either or both FMD and CSF.

1.2

Council Directive 72/462/EEC (1) of December 1972 on the health and veterinary inspection issues relating to the importation of bovine, ovine, caprine, swine and fresh meat or meat products from third countries ensures a high level of animal health protection by laying down the general sanitary requirements for certain imports from third countries. However, as part of the hygiene package, Council Directive 2002/99/EC (2) laying down the animal health rules governing production, processing, distribution and the introduction of products of animal origin for human consumption will replace the requirements for meat and meat products in Directive 72/462. This proposal on live ungulate importation and the amendments of Directives 90/426/EEC (3) and 92/65/EEC (4) will ultimately result in the repeal of Council Directive 72/462 EEC.

1.3

Under Council Directive 90/426/EEC of 26 June 1990 on animal health conditions governing the movement and import from third countries of equidae, imports into the Community of equidae are allowed only from third countries appearing on a list drawn up in accordance with Directive 72/462/EEC. This therefore will require amendments in order to meet the new requirements resulting from the updating and strengthening process.

1.4

Council Directive 92/65 EEC of 13 July 1992, laying down animal health requirements governing the trade in imports into the Community of animals, semen, ova and embryos not subject to the animal health requirements laid down in specific Community rules referred to in Annex A (1) to Directive 90/426/EEC, lays down the conditions for the importation into the Community of ungulate animals other than domestic bovine, ovine, caprine, porcine and equine animals. This Directive will also require amendments as the new proposal lays down rules for wild as well as domestic ungulates. An amendment of Council Directive 92/65 to reflect the new proposal's criteria on the drawing up of a list of Authorised third countries is also required.

2.1

This proposal lays down the animal health requirements for the importation into the Community of live ungulate animals of the species listed in Annex A.

2.2

The proposal consolidates in a single act the animal health requirements relating to all cloven-hoofed animal species, including the animal welfare provisions of Community legislation.

2.3

The proposal also clarifies the conditions for granting authorisation to a third country for the exportation of equidae (e.g. horses) to the EU and amends Directives 90/426/EEC and 92/65/EEC accordingly.

2.4

Article 4 lays down specific conditions, including the taking into account of previous experience of imports and audits of third countries, that must be considered when preparing a list of authorised third countries.

2.5

Derogations are proposed under articles 8 and 9, so as to allow flexibility when for example animals travel to and from shows and sporting events.

2.6

Inspections and audits of third countries from the Commission in order to verify conformity with or equivalence to Community animal health rules are envisaged.

2.7

It is proposed to extend to this proposal the new comitology procedures established in Regulation (EC) No. 178/2002 (5) laying down the general principles and requirements of food law, establishing the European Food Safety Authority, and laying down procedures in matters of food.

3.1

The EESC welcomes this proposal as part of the on-going review of Community measures to prevent and combat foot-and-mouth disease and classical swine fever.

3.2

The EESC supports the concept of consolidating the rules governing the imports of wild and domestic ungulates into one Directive.

3.3

The EESC is also very much in favour of the integration into this proposal of the general animal welfare requirements of Council Directive 91/628/EEC (6) on the protection of animals during transport, in particular as regards watering and feeding.

3.4

The EESC welcomes the use of the new comitology procedures, which allows a timely response when acting on scientific advice.

4.1

While the EESC recognises that flexibility in the form of derogations is desirable, it emphasises that derogations should only be made on a case-by-case basis so that the risk of importing diseases is not increased.

4.2

The EESC recognises the existence of potential new risks, as a consequence of the new borders the EU will have after the enlargement; the EESC therefore recommends that sufficient resources are made available by the Commission for the inspection and auditing in third countries.

5.1

The EESC supports the Commission's proposal in the interests of the protection of animal health and consistency of Community legislation.

30.4.2004   

EN

Official Journal of the European Union

C 110/24

1.1

The Commission is proposing to amend the Oils and Fats Regulation, 136/66 EEC, which will no longer be in force after 1 November 2004. The new Regulation will cover olive oil and table olives, comprising measures for the internal market, trade with third countries and the promotion of quality in the broad sense of the term. The Commission is proposing that, after an interim marketing year in 2004 of eight months, and starting in 2005, the marketing year for olive oil should run from 1 July. It is also proposing that the current private storage measures for olive oil should be retained and that the refunds relating both to the export and the manufacture of foodstuffs preserved in olive oil should be repealed. The existing quality and traceability measures will also have to be reinforced.

2.1

The EESC welcomes the legislative simplification entailed in the new proposal to which it would nevertheless wish to add the following comments:

2.2

Operators' organisations — Article 7. Approved operators' organisations should comprise only producers' organisations and interbranch organisations and no others. The Committee feels that in this way the interests of producers and processors would be better protected than at present with intervention from parties outside the sector.

2.3

Work — Article 8. Three-year programmes aimed at improving quality, the environmental impact of olive cultivation and product information dissemination and promotion should also be able to be carried out in non-Member and Member States already producing or beginning to produce olive oil, be they new or potential consumers, such as France, Australia, Peru and others.

2.3.1

The EESC feels that it is most important for the sector that the quality strategy be promoted, and it stresses the need to step up financial support for such measures, compliance with which would be more effective if they were integrated into the relevant COM.

2.3.2

The EESC would draw the Commission's attention to the key work carried out by the International Olive Oil Council (IOOC) on such important issues as the promotion and improvement of olive oil quality; it stresses that the IOOC should continue to develop these activities, with the appropriate checks.

2.3.3

The EESC feels that the work programmes of operators' organisations should include measures to concentrate supply and market own-brand oils in the production sector itself.

2.4

Trade with third countries — Article 11. Partial or full suspension of common customs duties for olive oil does not seem to be necessary for a product which is not perishable and the market for which is growing. The Commission justifies this measure in the fourteenth whereas of its proposal, referring to the need to ensure an adequate supply of the internal market, while in parallel underlining the fact that olive oil exports have doubled in the last ten years.

2.5

Export refunds. It would be wise to maintain these refunds for a given period of time so that the parties concerned can become aware of the impact of the present reform on developments in both EU olive oil production and prices. Maintaining these arrangements, which in practice have no financial impact given that export refunds have been set at zero since 1998, would nonetheless mean that such refunds could be brought into play in the event of any major market upsets resulting from the proposal in hand; this would secure competitiveness for Community olive oil on the world market.

2.6

Aid for private storage. This system — which has already proven ineffective since it is not tailored to the realities of the market — must be a flexible automatic trigger system, designed only to be used to resolve major crises in the sector. It is also necessary to update the trigger prices in the light of the present price references.

2.7

Quality standards. The EESC reiterates the need for a total ban within the EU on blends of olive oil with other vegetable oils (1).

2.7.1

The technical difficulty involved in analysing and monitoring blends, the percentage of olive oil included and the quality thereof, makes it difficult to check strict compliance with Article 6 of Regulation 1019/2002. This opens the door to fraud, which only contributes to the deteriorating quality and image of olive oil, in addition to being detrimental to the consumer.

2.7.2

The introduction of other food oils mixed with olive oil not only is damaging to this high quality product, but also means that consumers are buying a product which, compared to olive oil, is acknowledged as being of inferior food quality.

2.8

Designation of origin. In order to protect and promote quality, the EESC further stresses that the origin of olive oil must be determined by the place of origin of the olives used.

2.9

The EESC would alert the Commission and the producer countries to the serious problems affecting the olive-pomace oil sub-sector as a result of the so-called benzopyrene crisis which has — since it began in July 2001 — caused major losses in the sector, reflected in a 70 % drop in the price and a 50 % fall in consumption, in comparison with the situation before the crisis.

2.9.1

The EESC urges the Commission to set maximum levels for polycyclic aromatic hydrocarbons (PAH) in olive-pomace oil; such a move has been pending for more than two years and this has been seriously detrimental to the sector.

30.4.2004   

EN

Official Journal of the European Union

C 110/26

1.1

The EESC has received with great interest the EC Communication ‘Equal opportunities for people with disabilities: A European Action Plan’. The EESC has stressed in many of its reports the need that the success of the European Year of People with Disabilities should be measured by the concrete outcomes it will produce. The Communication provides a good framework for the follow-up to the European Year of People with Disabilities

1.2

Disabled people (1) constitute 10 % of the population, a percentage that increases with the ageing of our societies. This will mean almost 50 million people in the enlarged European Union. If we add to this figure the relatives of disabled people, it is clear that we are not speaking about a small minority of the population.

1.3

The EESC has continued during this year to increase its focus on disability issues. The drawing-up of an opinion on the United Nations Convention on the Rights of Disabled People (2), the organisation of two seminars devoted to the employment of disabled people and to the evaluation of the European Year, the preparation of a guidance note on mainstreaming of disability in the work of the EESC and the organisation of an exhibition by disabled painters at the EESC headquarters are some examples of this work. The cooperation between the EESC and the European Disability Forum, together with other Organisations, has continued to prove very useful.

1.4

The EESC considers that the European Year of People with Disabilities has contributed to an increased awareness of disabled people in society. The awareness of the need to a rights-based approach to disability has been one of the major goals of the European Year. However, it has to be noted that the different national initiatives for further legislation to protect disabled people from discrimination are leading to an increase in the gaps among Member States. This increasing gap is not only detrimental to the idea of a social Europe but will also create additional barriers to a real internal market.

1.5

The initiative of the United Nations to promote a thematic Convention on the rights of disabled people has contributed to the recognition of disability as a human rights issue.

1.6

The new European Constitution will incorporate stronger references to disability issues, including a clause which will require mainstreaming of anti discrimination throughout all policy areas. The potential of this new clause requires some further analysis.

1.7

The forthcoming incorporation into the EU Treaty of the EU Charter of Fundamental Rights is very welcome, in particular as Article 21 prohibiting discrimination against, inter alia, people with disabilities, and Article 26 on integration of persons with disabilities, recognise the need for measures designed to ensure their independence, social and occupational integration and participation in the life of the community.

1.8

The new Eurostat figures on employment of disabled people show that 78 % of the severely disabled people in working age are outside of the labour force as compared to 27 % for those without a disability. Within those in the labour force, the unemployment rate is nearly twice as high among severely disabled people compared to non-disabled people. Only 16 % of those who face restrictions at work are provided with some assistance to work (3). The gender breakdown of these statistics shows that the situation is even worse for disabled women.

2.1

The EESC welcomes the fact that the European Year of People with Disabilities has produced a concrete action plan for the period 2004-2010. However, it needs to be stressed that the action plan somehow lacks ambition and the EESC would like therefore to propose some additional elements, to be taken into account, if possible, already in the first phase of the action plan and, if not possible, in the period after 2005.

2.2

A previous EESC opinion (4) suggested to launch an open method of coordination in disability policies. Therefore, the EESC welcomes the proposal reflected in the EC Communication to produce biennial reports on disability. The EESC considers that these reports should be based on common guidelines in order to allow benchmarking among countries. While employment is obviously a priority of disabled people, other policy areas should also be covered by these reports and the social inclusion and full participation of disabled people in society should be overall guiding principles and objectives. The EESC proposed that the results of these biennial reports should be presented to the Council of Employment and Social Affairs. The involvement of representative disability organisations at national and EU level in this process is considered of vital importance.

2.3

The EESC welcomes the references included in the EC Communication on the capacity building project undertaken by the European Disability Forum in ten accession countries. In order to build on the work undertaken in this project, the EESC would like to see special attention given to disability organisations in the ten acceding countries during a transition period. Targeted measures should allow for these organisations to increase their knowledge and therefore become really active in the implementation of EU policies which favour disabled people. The support to disability organisations from those candidate countries which will not join the EU in May 2004 has to be increased.

2.4

The EESC welcomes the proposal in the EC Communication to prepare a working paper on how to mainstream disability in all of the Employment Guidelines. To complement this, the EESC proposes the establishment of a proper monitoring mechanism to allow the preparation of country specific recommendations to Member States on their inclusion of disability issues. Priority should be given in this respect to the employment of disabled people on the open labour market, including the employment of disabled people by public authorities and bodies as well as special measures to address the employment of disabled people in rural areas. The role of the social partners in this process is of vital importance. In view of the demographic evolution of our societies, the increase of the employment rates of disabled people can have a huge and positive impact also from an economic point of view.

2.5

The EESC welcomes the proposal in the EC Communication to use the structural funds to promote the social inclusion of disabled people. This should be done in a two-track approach. On the one hand, disability specific projects should be funded and on the second hand all projects to be funded by Structural Funds have to comply with compulsory accessibility criteria. This two track approach has to be included in the new EU regulation for Structural Funds, which the European Commission plans to present in May 2004. An outcome of the current process of revision of the Structural Funds must be the recognition of disability and disabled people as a key area and target group to be taken into account at a Community level as well as in the Member States, regardless of the new financial perspectives.

2.6

The EESC has been monitoring closely the process to arrive at the new EU directives on public procurement (5). The potential of public procurement to promote the employment of disabled people, the accessibility of public transport and the built environment, as well as the production of accessible goods and services, is huge. The EESC therefore welcomes the commitment to produce a tool kit to facilitate the inclusion of accessibility requirements for Information and Communication Technologies in public procurement calls and suggests to extend this exercise to other products and services.

2.7

The EESC stresses the negative implications of the non transposition of the 2000/78 EU directive on equal treatment in the workplace in most of the EU Member States. The EESC urges the European Commission to fully use the available tools against those Member States that have not implemented the directive or have not implemented it properly. Additionally, measures need to be undertaken to increase the capacity of disability organisations, social partners and the judiciary system in order to ensure an effective implementation of the directive.

2.8

The EESC has asked in several of its previous opinions (6) for a disability-specific directive based on Article 13 of the EU Treaty to combat discrimination of disabled people in all areas of life. The EESC is therefore extremely disappointed not to see any reference to this initiative in the EC Communication. While being aware of the current difficulties to launch successfully such an initiative, the EESC would have at least expected an acknowledgement of the need for such an initiative, as well as number of preparatory actions which would have paved the way for such an initiative to be launched.

2.9

The EESC considers that such a directive would ensure a minimum level of protection against discrimination in all areas of life across the European Union. As it would cover the area of access to goods and services, it would also contribute to a more efficient single market.

2.10

The EESC agrees with the importance of mass media to contribute to a better image of disabled people in society. The EESC would welcome the establishment of a European network on media and disability, which would further contribute to a better portrayal of disabled people in media by, among others, promoting the exchange of good practice among mass media. The example of the UK Broadcasting and Creative Industries Disability Network could serve as a model.

2.11

The EESC welcomes the focus of the EC action plan on accessibility. However, the EESC considers that the proposals made will not properly achieve the objective. An adequate policy framework needs to be established, which will provide financial incentives to companies to make their premises and services accessible. This should be complemented by awareness raising campaigns targeted at companies to show the importance of disabled people as consumers. When needed, this needs to be complemented with binding legislation to make accessibility standards of compulsory compliance.

2.12

The EESC welcomes the report produced by the expert group on access to the built environment and requests the European Commission to put in place all of its recommendations, in particular those related with the Directive 89/106/EEC on Construction Products. The EESC also supports to undertake follow-up action on the study on harmonised criteria for good accessibility of tourist sites (7). The EESC reminds that proper legislation and proper use of public funds will be key elements of success to promote the objective of accessibility of tourist sites.

2.13

The EESC also welcomes the report on assistive technologies recently presented by the European Commission, and looks forward to the implementation of its recommendations, specially taking into account the single market, as well as the need for Member States to increase transparency as regards products and reimbursement systems.

3.1

The EESC has stressed in its previous reports the need to mainstream disability in all policy areas. It therefore welcomes the forthcoming new budget line which will finance a pilot project on mainstreaming of disability actions as a follow-up initiative to the European Year of People with Disabilities. The EESC considers this pilot project as a first step towards a disability specific action programme which will be focused on the mainstreaming of disability in all relevant policy areas.

3.2

The EESC would like to suggest some actions which could be undertaken under this pilot project:

3.3

The EESC looks forward to the forthcoming Green Paper on non discrimination and stresses the need for a clear commitment to a disability-specific directive.

3.4

The EESC welcomes the involvement of large European companies in the European Year of People with Disabilities. Their role as catalysts towards other companies should not be underestimated. As mentioned in its previous report, the EESC would welcome the establishment of a European network on business and disability as one of the concrete outcomes of the European Year of People with Disabilities. This network could contribute to the improvement of the legislative framework to increase the employment of disabled people and the production of accessible goods and services, therefore increasing the business case for disability. The network would also provide useful advice to new companies interested in becoming more actively involved in disability issues, with a particular effort to be made towards SMEs.

3.5

The EESC welcomes the campaign led by the European Trade Union Confederation and its members. The EESC stresses the important role of trade unions and encourages them to continue increasing their focus on disability issues.

3.6

The EESC has in all of its previous reports highlighted the importance of the involvement of representative disability organisations in all levels of policymaking. The representative character of the European Disability Forum is accepted by all EU institutions and its special status needs therefore to be acknowledged. A strong and independent European Disability Forum which acts as a watchdog is one of the best guarantees that the rights of disabled people will continue to be respected in all EU initiatives.

3.7

The role of the European Disability Forum would not be possible without its national and European members. Therefore, the financial support the European Commission provides for European impairment-specific organisations, members of the European Disability Forum, is of vital importance and has to be maintained. The diversity of the disability movement can only be respected if financial support is provided to the different European impairment-specific organisations.

3.8

The EESC would like to see the establishment of a monitoring structure of the EC action plan. The participation of all relevant partners in this monitoring structure, including the European Disability Forum, will be of vital importance to ensure the success of the action plan. The EESC would like to be associated to this monitoring structure.

3.9

The EESC welcomes the impact the European Year of People with Disabilities has had to include disability on new policy agendas, like youth and culture. The Council Resolution ‘Accessibility and Cultural Infrastructure and Cultural Activities for People with Disabilities’ (8) is a good example of this. The EESC stresses the importance to ensure that all projects funded in the areas of culture, youth and education with EU funds should comply with accessibility criteria.

3.10

The new European Commission work programme for 2004 provides several initiatives which are relevant for disabled people and the commitment to mainstream disability should lead to adequate references to disabled people in these initiatives. Some of these initiatives are:

3.11

The EESC welcomes the references to the High Level Group on Disability and considers that the role of this Group should be strengthened. The participation of the European Disability Forum in the meetings of this Group needs to be permanent, in line with how the Advisory Committee on Equal Opportunities for Women and Men works. The social partners at EU level should also be involved in the work of the High Level Group.

3.12

The EESC requests that in all future work in the area of human rights, the rights of disabled people need to be specifically addressed. The EESC looks forward to the results of the study which is currently being undertaken on the situation of disabled people in residential institutions and which should provide not only an overview of the situation, but concrete proposals on alternative community based measures for this large group of disabled people.

3.13

The EESC welcomes the guidance document on development cooperation and disability which has been presented in March 2003 and which was prepared in cooperation with the European Disability Forum and the International Disability and Cooperation Consortium. The EESC urges the European Commission to implement this guidance note in order to ensure that disabled people will benefit from development cooperation funds, also in situations of emergency and humanitarian aid.

3.14

The EESC commits itself to continue strengthening its focus on disability issues. The efforts made by the EESC to ensure full accessibility of its new premises and services, show the real commitment of the EESC, which wants to be seen as leading by example in the protection and promotion of the rights of disabled people and their families.

30.4.2004   

EN

Official Journal of the European Union

C 110/30

1.1

This proposal is one element in the Commission's strategy on company taxation submitted in 2001 (1), in which it identified a certain number of fiscal obstacles to cross-border economic activity in the internal market and announced its short and longer-term plans to remove them.

1.2

The strategy provides for a number of targeted measures on issues such as extending the directives on dividends, interest and royalties and mergers, as well as cross-border loss offset, transfer pricing and double taxation agreements.

1.3

The Commission feels that, in the longer term, companies must be offered the possibility of being taxed on the basis of a consolidated basis of assessment for corporation tax covering all their activities in the European Union, so as to escape the expensive inefficiencies which currently result from the co-existence of 15 (soon to be 25) separate sets of tax rules.

1.4

In its opinion on Direct Company Taxation adopted in 2002 (2), the EESC supported the European Commission's proposals to remove in the short term any form of double taxation or other tax obstacles faced by companies conducting cross-border activities within the internal market.

1.5

As for the longer term, the EESC endorses the aspiration to an internal market without fiscal obstacles, believing that common principles have to be established which would promote an internal market with fair competition. These common principles would also help to achieve the objectives of simplification, competitiveness and job creation.

1.6

The strategy adopted by the European Commission in 2001 was first reviewed in November 2003 (3). The conclusion was that, after two years' work, the Commission's two-tier strategy on company taxation remains the best approach for addressing the problems in the internal market and that the promised measures and initiatives had been carried through. This was confirmed at the European conference on company taxation held in Rome on 5 and 6 December 2003 (4).

2.1

One of the short-term objectives set by the European Commission in its October 2001 strategy for company taxation was to adopt proposals intended in particular to update and widen the scope of the Parent-Subsidiary and Merger Directives.

2.2

Another is to adopt and subsequently modernise the draft Interest and Royalties Directive included in the ‘tax package’, which comprised the code of good conduct, the Savings Directive and the Interest and Royalties Directive.

2.3

The draft directive modernising the Parent-Subsidiary Directive was adopted at the ECOFIN Council on 22 December 2003. The final text of the directive was published in the Official Journal on 13 January 2004 (5).

2.4

The Interest-Royalties Directive was adopted on 3 June 2003 (6) and must be transposed into national law by 1 January 2004. A draft directive to modernise this directive was published by the Commission on 30 December 2003 (7). It is intended in particular to incorporate substantial improvements to the scope of the Parent-Subsidiary Directive.

2.5

The draft Merger Directive is thus the last of the three proposals to be adopted by the Council. It is the fruit of an impressive and large-scale consultation exercise which made it possible to identify all the taxation problems associated with cross-border restructuring.

3.1

The directive now in force (90/434/EEC) provides for deferred taxation of capital gains resulting from cross-border company restructuring in the form of mergers, divisions, transfers of assets and exchanges of shares.

3.2

This tax deferral regime ensures the fiscal neutrality of restructuring operations by allowing a temporary exemption: the taxation of capital gains is deferred until subsequent transfer of the assets received. This is why:

3.3

The directive of 23 July 1990 thus already provides for a solution in certain cases to the cross-border obstacle created by high tax costs linked to business restructurings by guaranteeing that a cross-border operation will not give rise to a higher tax liability than if the operation had been done within the same Member State.

3.4

The proposal modernising the directive replaces a 1993 proposal which was withdrawn by the Commission. It aims to improve the scope of the current directive and the methods for tax deferral whilst safeguarding the financial interests of the Member States. It also complements a tenth draft directive on company law aimed at facilitating mergers between companies in different Member States.

3.5

The key elements of the new proposal for modernising the Merger Directive are as follows:

3.5.1

The proposal is intended to align the Merger Directive with the amendments introduced into the Parent-Subsidiary Directive, namely:

This widening of the scope of the Merger Directive is achieved by adding new legal forms designated by name to the list of entities given in an appendix to the directive. It is basically the same list as that adopted as part of the directive modernising the Parent-Subsidiary Directive and which should be adopted as part of the directive modernising the Interest and Royalties Directive.

3.5.2

The proposal also extends the benefit of the directive (the tax deferral regime) to companies within its scope which are corporate taxpayers in their Member State of residence, but are considered transparent for tax purposes by other Member States.

3.5.2.1

Without modifying the arrangements on transparency, the draft directive stipulates that this other Member State may no longer tax its resident taxpayers having an interest in the company at the time of the transactions covered by the Directive. These taxpayers will only be taxed on the occasion of a later disposal of the assets transferred.

3.5.3

The draft extends the scope to include split-offs, i.e. limited or partial divisions where the transferring company continues to exist. The tax deferral regime will also be applicable to these transactions.

3.5.3.1

A split-off is a transaction whereby, without being wound up, a company transfers part of its assets and liabilities constituting one or more branches of activity to a receiving company. In exchange, the receiving company transfers securities representing its capital to the shareholders of the transferring company.

3.5.4

The draft provides fiscal neutrality for the transfer of the registered office of a European company or a European cooperative society from one Member State to another. It also provides for a tax deferral regime which prevents such a transfer resulting in immediate taxation of capital gains relating to those of its assets becoming connected with the permanent establishment that the company transferring its registered office will now have in the State where it had tax residence. This tax regime will also refer to provisions or reserves constituted by the company before transfer of the registered office, to the possible take-over of losses and to the existence of a permanent establishment in a third Member State.

3.5.4.1

The possibility of transferring the registered office is expressly provided for in the statute of these companies so as to guarantee the right of establishment, a fundamental freedom. It is therefore essential that this freedom should not be impaired by tax provisions.

3.5.5

The draft makes clear that the directive's tax deferral regime may also apply in the case of companies that decide to convert their branches into subsidiaries.

3.5.5.1

The tax deferral provided for in the directive is associated with keeping the assets and liabilities transferred connected with a permanent establishment of the transferring company, which is not the case when a branch of a foreign company is converted into a subsidiary of the same company. In such cases, the assets and liabilities transferred are connected to the receiving company (the new subsidiary). Since conversions of branches into subsidiaries fall within the aims of the directive and pose no threat to Member States' taxing rights (the assets and liabilities remaining under the same tax jurisdiction), it is appropriate to specify that these operations do fall within the scope of the directive.

3.5.6

The draft also extends the benefit of the directive to exchanges of shares where the majority of the voting rights in the acquired company are obtained from shareholders who do not have tax residence in an EU Member State.

3.5.7

Lastly, the draft introduces appropriate rules to prevent double taxation due to different rules for valuing shares and assets in different Member States. This applies to asset transfers and share exchanges.

3.5.7.1

Since the receiving company will subsequently be taxed on the capital gains from the assets transferred, national tax rules for valuing shares received as a result of an asset transfer of share exchange had to be harmonised. It is therefore envisaged that these shares will be ascribed the ‘real’ value that the assets and liabilities had immediately prior to an asset transfer or the ‘real’ value which the shares received had at the time of an exchange of shares (one exception being when own shares are held).

4.1

The Merger Directive of 23 July 1990 was designed to guarantee vital tax neutrality for cross-border company restructuring operations while at the same time safeguarding the Member States' financial interests.

4.2

The Committee welcomes the proposals for modernising this Merger Directive drawn up by the European Commission. These proposals make essential and appropriate improvements to the directive of 23 July 1990 and, in principle, do not entail any unfavourable consequences for companies as compared with the present situation. They do not require companies to meet any new fiscal obligation or formality in order to comply.

4.3

The aim of the proposal to modernise the directive is to improve and extend the tax deferral regime for capital gains from restructuring. A broad range of forms of company (including the European company (SE) and the European cooperative society (SCE), as well as the forms of company usually adopted by SMEs) and restructuring operations (such as split-offs and conversion of a branch) are now explicitly covered.

4.4

By extending the regime of tax neutrality to the SE and SCE, including in the case of a transfer of registered office, which is an operation specific to the statute of those two forms of company, the draft directive will contribute to the setting up and management of European-scale companies free of the obstacles associated with the territorially limited tax and company law of the different Member States.

4.5

All these amendments will enable companies – including a larger number of SMEs – to benefit fully from the advantages associated with the single market (through the balanced taxation of national and cross-border activities, which will ensure the neutrality of investment and restructuring decisions). This should improve their competitivity and thus have a positive impact on job creation and the fight against unemployment.

5.1

The Committee feels that the clause stipulating that any new form of company introduced by a Member State is automatically to be added to the list of that Member State's forms of company appended to the directive, should be made generally applicable. This would solve any problems arising from a failure to update the list.

5.2

The Committee also considers it essential that the modernisation of the Merger, Parent-Subsidiary and Interest and Royalties Directives be done consistently, both in terms of the scope (for example, the forms of company listed in the appendix to the directives) and the conditions needed to qualify for the proposed tax regime (for example, the holding requirement reduced to 10 % in the directive modernising the Parent-Subsidiary Directive).

5.3

The Committee feels that the extended scope (including other forms of company and other restructuring operations) is incomplete — and therefore unsatisfactory — inasmuch as:

5.4

Finally, the Committee insists that the fiscal neutrality of cross-border restructuring operations should be fully guaranteed, particularly as regards the take-over of losses and the immunisation of provisions and reserves.

6.1

The Committee wholeheartedly supports the proposals to amend the Merger Directive drawn up by the European Commission. These proposals make essential and appropriate improvements to the directive and will enable companies — including SEs, SCEs and a larger number of SMEs — to benefit fully from the advantages associated with the single market, which should improve their competitivity and thus have a positive impact on job creation and the fight against unemployment.

6.2

However, the Committee urges the Commission to re-examine certain key aspects which remain outstanding. These are referred to in the Committee's specific comments.

30.4.2004   

EN

Official Journal of the European Union

C 110/34

1.1

Over the last few decades, the EU has consistently adjusted and updated its policy on trade preferences for developing countries in the light of developments in the situation. The latest major revision of the Generalised System of Preferences (GSP) came into force on 1 January 1995 to cover the ten-year period starting on that date. It is, therefore, due to expire on 31 December 2004 and this necessitates a further revision.

1.2

The existing guidelines introduced a number of important changes. They replaced the traditional approach of granting duty-free market access for limited quantities with the concept of modulation, which provides limited preferences for unlimited quantities. At the same time, new rules were introduced on graduation, allowing for the exclusion of certain sectors of exports from specific beneficiary countries.

1.2.1

Subsequently, additional preferences were offered in the form of special incentive arrangements. These were intended to promote the objectives of:

1.2.2

Provisions exist for the temporary withdrawal of benefits from countries which are in breach of human rights, have committed serious and systematic violations of core labour standards, have exhibited shortcomings in customs controls, have connived at drug trafficking, have been involved in fraudulent behaviour or unfair trading practices, have infringed international conventions concerning the conservation and management of fishery resources or have contravened one or more of a number of other requirements. However, this sanction has been invoked so infrequently as to be largely ineffective; the only country presently being disciplined in this way is Myanmar.

1.3

In 1998, in order to facilitate the application of the GSP, the Commission introduced proposals (COM(1998) 521 final) bringing together the widely differing provisions for industrial and agricultural products in a new Regulation to come into effect on 1 January 1999 and remain in force until 31 December 2001. The EESC gave its approval to these proposals. (1) They were subsequently embodied in Council Regulation (EC) 2820/98.

1.4

In 2001, the Commission introduced proposals (COM(2001) 293 final) for a modified regime to cover the period from 1 January 2002 to 31 December 2004. The EESC also gave its approval to these proposals, (2) which were enacted as Council Regulation (EC) 2501/2001.

2.1

The Commission originally envisaged publishing a document in September 2003 to set out its proposals for the new regime to come into effect on 1 January 2005. Subsequently, it decided to delay the introduction of the new system for a period of one year and to put forward a proposal for an interim arrangement in the intervening period, which would continue the existing guidelines with some relatively minor modifications, primarily of a technical nature.

2.1.1

The decision to delay the introduction of fundamental changes to the system has been attributed inter alia to a wish to await the results of the Doha round of WTO negotiations and a desire not to prejudice the outcome of these talks. An additional factor was the complaint brought against the EU at the WTO by India. It was also considered that it would be advantageous to postpone the introduction of the new guidelines until some time after the enlargement of the Union had taken place, in order to give the new Member States more time to adjust; one of these (Cyprus) is currently a GSP beneficiary.

2.1.2

The ten-year period for the new regime is now expected to commence on 1 January 2006; even in the event that implementation of the Doha round of negotiations has not been achieved by that date, the Commission has now decided that it will not seek a further prolongation of the status quo. The relative failure of the Cancun talks does not bode well for a successful conclusion of the Doha round within this timescale.

2.2

The Commission proposals for the interim period were published in September 2003 (COM(2003) 634 final) and the EESC duly gave its approval to these arrangements. (3)

2.3

In accordance with the request received from Mr Lamy, the EESC now sets out its observations and recommendations on the form which the guidelines for the new definitive GSP regime, to be introduced at the end of this interim period, should take.

3.1

The EESC believes that the objectives of the present system (as set out above) are worthwhile and should form the basis of any new system which is designed to replace the current arrangements.

3.2

The challenge must now be to design a system that will ensure effective implementation of the EU's policies in these areas.

3.3

In this context, the EESC notes that the special incentive arrangements have largely failed to have the desired impact. At the latest count, only one country (the Republic of Moldova) had been included in the special incentive arrangements for the protection of labour rights (a second country, Sri Lanka, is due to be included in February 2004) and none at all in the special incentive arrangements for the protection of the environment; this is a clear indication that the special incentive arrangements have not transpired to be incentives. The EESC therefore considers that a fundamental review of these mechanisms should form part of the revision process.

3.3.1

In a previous opinion on this subject, (4) the EESC commented that the Commission's proposals to improve these arrangements might not have gone far enough to make the incentives attractive to the beneficiary countries. This raises the issue of whether it is possible, within the restrictions of the modulated system, with its limited preferences, to offer incentives to the countries concerned to adopt the desired modes of behaviour.

3.3.2

The additional flat-rate reduction of 3.5 percentage points, giving a total reduction of 7.0 percentage points, might well constitute an inadequate incentive compared to the enormous sums of money involved in drug trafficking or the daunting cost to the national coffers of the beneficiary countries of implementing environmental projects.

3.3.3

There is also the question of how the incentive can best be structured; whether it is better to grant the reduction on an ex-post basis in recognition of the fact that a beneficiary country has complied with the requirements or whether it is preferable to offer the incentive on an ex-ante basis in order to encourage the countries concerned to adopt the required policies. However, neither of these approaches will have the desired effect unless the preferences are of sufficient magnitude to constitute a worthwhile inducement.

3.4

The EESC considers that, whatever measures are adopted, they should be transparent, coherent, objective and non-discriminatory. They should be based on internationally agreed standards and internationally-recognised criteria, where these exist, including the eight core ILO labour standards. They should also be compatible with WTO regulations and other treaty commitments.

3.5

In its previous opinion, (5) the EESC observed that the revision introduced at that time stopped short of fully harmonising and unifying all the rules and procedures of the GSP and expressed the hope that advantage would be taken of the major revision in 2004 to simplify, harmonise, streamline, codify, reduce and unify the entire system. It now reiterates this statement and stresses the importance which it attaches to this issue; simplification is fundamental to the improved operation of the GSP and to any prospect of realising its objectives. The existing arrangements are characterised by a lack of clarity, concision and structure.

3.6

One of the factors which is contributing to the complexity of the present arrangements is the system of graduation, whereby specific sectors of exports from individual beneficiary countries can be excluded on the grounds that support for those particular industries in those territories is no longer required and its prolongation cannot be justified in the context of aid to developing nations, even though the continuance of support for other industries in the same nation is envisaged. While the EESC gave its approval (6) for retaining the system of graduation in the context of the interim arrangements for the period from 1 January 2002 to 31 December 2004, it feels that this process should be reviewed as part of the more thorough-going revision which is now to take place.

3.7

In a number of recent opinions, (7) the EESC has laid emphasis on the essential need for legislative proposals to be accompanied by a detailed impact assessment. It hopes that the Commission will prepare such an impact assessment of its proposals to revise the GSP system.

4.1

On 10 June 2003 the EESC conducted a hearing of civil society representatives at its Brussels headquarters. The views set out in this section reflect the written submissions received and the interventions made at the hearing.

4.2

In general there was a feeling that the present system was not working as well as it might. Several respondents said that they had serious doubts about the efficacy of the preferential tariffs but they lacked any means to substantiate them. Evaluations of the success of the system were difficult to make because of the paucity of available data. Others pointed to an imbalance in the distribution of benefits; 75 % of the total volume of tariff reduction goes to Eastern countries, of which one third is to China. Concerns were expressed that the preponderance of benefits went to the most advanced of the developing countries and not to the Least Developed Countries. Frequently, international traders rather than nation states are the major beneficiaries. It was felt that the impact of the GSP was often outweighed by other factors, such as non-tariff barriers.

4.3

Several problems were identified:

4.4

Views were sharply divided on the question of which objectives the GSP system should be designed to pursue for the next ten-year period. The trade union organisations were firmly of the opinion that core labour standards, environmental protection and the suppression of drug production and trafficking should remain an essential part of the system; even to the extent of excluding countries which did not comply with these requirements, regardless of their economic status. Conversely, the trade associations, while recognising the great importance of these issues, felt that the GSP was not a suitable instrument for dealing with such problems and that including them made the application of the preferential scheme more difficult, as well as resulting in some legal uncertainty.

4.5

Some respondents felt that the current list of beneficiary countries was inconsistent because:

Others felt that GDP per capita should not be the defining criterion because some countries with a low per-capita GDP had a strong, or even dominant, position in the world trade in particular industrial sectors. Trade union representatives argued that adherence to core labour standards, environmental protection and combating drug trafficking should be the sole criteria. Many respondents held the view that the list of beneficiaries should be restricted to the 49 nations on the UN list of Least Developed Countries.

4.6

There was general agreement that basic preferences should be granted on an ex ante basis, but that special preferences – if granted at all – should be awarded on an ex post basis.

4.7

Suggestions for simplification included:

Proponents of limiting the beneficiaries to the 49 Least Developed Countries pointed out that this would ipso facto result in a major simplification of the system.

4.8

There was a general feeling that the operation of the graduation clause was not working satisfactorily and had led to a great deal of controversy. One respondent went so far as to say that ‘the current system of graduation is totally blind and untransparent’. It was noted that loss of GSP status often led to the curtailment of FDI in the country concerned because the investment had been predicated on the existence of the preferential tariffs; the countries excluded therefore suffered a double penalty. Another problem is that the period of reference used for updating the graduation is too far removed from the updating point; for example, the reference period for 2003 is 1997-1999.

4.9

It is generally considered that there is not only a lack of coherence in the general trade and development policies of the EU but that these are sometimes contradictory. Rectifying this situation and achieving a proper balance between the various factors to be taken into consideration will require a coordinated approach from all of the EU institutions and the active involvement of a number of Directorate Generals within the Commission.

5.1

The same questionnaire was sent to the governments and representative organisations in a number of the beneficiary countries. Regrettably, very few replies were received and the results have been excluded from this survey as it is considered that the response is too low to represent a statistically significant sample. However, the EESC continues to be actively engaged in assisting the developing countries to build their capacities to respond to requests of this nature.

6.1

It seems likely, given its inauspicious start, that the Doha round of GATT negotiations will be as protracted as its predecessors. The EESC therefore endorses the Commission's decision to proceed with the introduction of the new system with effect from 1 January 2006 and not to await the outcome of the Doha round at some uncertain time in the future.

6.2

The initiative which the EU has launched under its Everything But Arms deal for the 49 Least Developed Countries means that they are effectively removed from the GSP regime. As they are entitled to export all other products (with some transitional exceptions in the agricultural field) to the EU in unlimited quantities on a duty-free basis, the GSP no longer applies to them, since you cannot reduce by preferences that which has already been set at zero.

6.3

The GSP is one element in the EU's development policy. As such, it must not be out of kilter with the other elements of this policy. Changes to the GSP system have to be considered in the light of the overall development strategy. This will require a close degree of coordination between the relevant Directorates-General of the Commission.

6.4

The EESC hopes that when the new system is introduced the opportunity will be taken to harmonise all the rules and procedures of the scheme.

6.5

The GSP is primarily aimed at assisting developing countries to develop their economies. It cannot be a panacea for all the problems faced by those countries.

6.6

Various criticisms have been levelled at the existing GSP system, viz:

6.6.1

The EESC agrees that there are too many countries covered by the GSP scheme. The current list of eligible nations extends to 174 and within that figure there are wide discrepancies in state of development, volume of trade, per-capita GDP, level of industrialisation, level of poverty and adherence to internationally accepted standards of social responsibility.

6.6.1.1

On the one hand, it includes major trading nations such as China, India, the Russian Federation and South Africa, who are formidable competitors of the EU in many market sectors; at the other end of the scale, it embraces remote island territories with miniscule economies such as Christmas Island, Heard Island, the McDonald Islands, South Georgia and the South Sandwich Islands; in between these two extremes fall tax havens such as the Cayman Islands, oil-rich nations like Kuwait, countries with well-developed economies such as Egypt and those with totalitarian regimes such as Zimbabwe.

6.6.1.2

The EESC agrees with the proposition that per-capita GDP cannot be the sole criterion used to determine eligibility for inclusion in the GSP arrangements. It also shares the concerns which have been expressed in many quarters that an undue proportion of the benefit is going to those nations which have least need of it. In order to ensure that assistance under the GSP system is concentrated on those countries with the greatest need, the EESC recommends that the new guidelines should exclude the following categories from participation:

6.6.1.3

In order not to disadvantage nations with existing bilateral or regional trade agreements with the EU, it should be possible to modify the existing agreements in such a way as to consolidate in those agreements any benefits to which they may currently be entitled under the GSP arrangements.

6.6.2

The EESC attaches prime importance to promoting the observance of core labour standards, protecting the environment and combating drug trafficking but it has to be said that the present GSP regime has been totally ineffective in achieving any of these aims. Only one country has been included in the special incentive arrangements for the protection of labour rights and none at all in those for the protection of the environment while there is no evidence that the special incentive arrangements for combating the production and trafficking of drugs, from which twelve countries have benefited, has had any impact whatsoever on the drug trade.

6.6.2.1

The EESC regards it as pointless to prolong a system which, while admirable in its objectives, has so patently failed in practice. It believes that consideration should be given to devising more effective ways of meeting these worthwhile objectives; if it is felt that the GSP system should be employed to this end, then this can best be achieved by making greater use of the temporary withdrawal mechanism. To date, this has been invoked against only one of the countries in the list of 174, despite the fact that breaches of the required standards can readily be found passim. In many cases, this is because it is deemed impolitic to offend or antagonise the regimes of the countries concerned; the EESC cannot condone the subordination of matters of principle to political expediency.

6.6.2.2

The EESC recommends that, as part of the new guidelines, the Commission should lay down clear standards for the protection of labour rights, the protection of the environment, the suppression of drug trafficking, the observance of fundamental human rights, sustainable development and other areas of concern such as consumer protection and animal welfare. Countries which are seen to be in serious and systematic breach of these standards should, in the first instance, have their attention drawn to their defalcations and be required to correct them; where this is ignored, a public warning should be issued that failure to meet the required standards by a specified date will result in the temporary withdrawal of all GSP benefits; countries which do not respond to these warnings should then have all preferences withdrawn until such time as they have complied with the requirements. In order to produce the desired effect, this must be regarded as a measure to be applied routinely, where necessary, and not as a weapon of last resort, to be used only in extremis.

6.6.2.3

Where internationally-accepted standards exist, as in the case of the core ILO labour standards, (8) these should form the basis of the applicable EU standards. However, the absence of such international standards should not be an impediment to the formulation and application of relevant EU standards. The EU is entitled to impose conditions on the conduct of trade on preferential terms at its absolute discretion. The temptations to connive at drug-trafficking, turn a blind eye to violations of human rights and plunder the environment are strong and it is necessary to provide a countervailing force of sufficient weight. At the same time, it is essential to stress the moral imperative in these issues in order to counter the accusation that these requirements are merely another form of non-tariff barrier in disguise.

6.6.3

The EESC accepts that there is an imbalance in the current distribution of benefits, with the major beneficiaries being the more advanced of the developing countries and not those which stand most in need of assistance. It feels that the elimination of the categories set out in 6.6.1.2 above would go some way towards redressing the balance. In order to promote economic development in the poorer countries, preferences for products must be fixed primarily according to the export interest of the beneficiary country. It would simplify the process considerably if there were to be some rationalisation of the industrial sectors and product categories covered by the scheme.

6.6.4

The EESC accepts that there is too great a degree of complexity in the present system of graduation and that it has led to considerable controversy and discontent, particularly from those countries which have been subjected to it; some improvement is obviously desirable but the EESC does not agree with those who postulate that graduation should be discontinued. Graduation should not be seen as a sanction; it is, rather, a recognition of the fact that the preferences have worked and that a particular industrial sector has advanced to the point where it no longer requires preferential assistance. That this is indeed the case, is demonstrated by the fact that eight of the nine industries which have been graduated to date have continued to increase the volume of their exports to the EU after graduation. The assumption that sectors, and nations, will eventually reach this stage is inherent in the GSP system.

6.6.4.1

The EESC recommends that the graduation system should be simplified, rendered more transparent and should combine a statistical economic assessment based on a formula of market indicators with a serious market evaluation of the sector concerned. It would be advantageous for DG Enterprise to be involved in this exercise and the views of European industry should also be canvassed. In addition, the interval between the graduation point and the reference period should be reduced.

6.6.4.2

The EESC recommends that the provision introduced in the interim arrangements whereby the graduation process should not be applied to any beneficiary country whose exports to the EC account for less than 1 % of total Community imports of products covered by the Community preference scheme in at least one of the reference years, should be retained in the guidelines for the new definitive system. Indeed, it feels that consideration could well be given to increasing this threshold limit.

6.6.5

The EESC is concerned by the incidence of fraud and considers that every possible measure should be introduced to reduce it. The rules of origin are too complex and are difficult to apply; they are easily misunderstood and require in-depth knowledge of a huge quantity of legal texts; consequently they act both as a constraint on trade and an incitement to fraud. Too often, beneficiary countries are merely serving as conduits for the products of non-beneficiary nations. The incidence of GSP Form A Certificates incorrectly issued or falsified in certain countries of origin in the 1990s is a case in point. There must be an effective system of inspection, verification and enforcement. This will require the strengthening of customs services within the EU and better coordination between them.

6.6.5.1

Beneficiary countries must also be required to improve their controls; those beneficiaries who connive at fraud by operating ineffectual control mechanisms should suffer temporary withdrawal of their benefits. The EU is incurring an annual cost in excess of EUR 2.2 billion by way of lost customs revenue in order to fund the GSP scheme. Conversely, the participating countries are receiving a collective annual benefit of that amount; if the EU is to give advantages of that magnitude, it is entitled to impose terms and conditions on the receipt of those advantages.

6.6.5.2

There is also a need for closer contact and cooperation between the customs services of the EU and those of the originating countries. This may require financial commitments at Community level to provide liaison between EU customs officials and their counterparts in developing countries; in addition, it may require training facilities to be provided to the customs services of those nations. There is also a security aspect to this situation; in the current climate, it has to be recognised that, in reality, the external frontiers of the EU lie not only at the boundaries of its Member States but increasingly in the territories of the countries from which its imports emanate. The EESC is currently preparing an opinion on this topic. (9)

6.6.6

The EESC recognises that the effectiveness of the GSP preferences is constantly being eroded by progressive across-the-board tariff reductions as a result of successive rounds of the GATT negotiations. It regards this situation as being inevitable and not necessarily undesirable. It has been clearly demonstrated that global tariff reductions have been very effective in stimulating world trade and increases in global commercial activity can only be to the benefit of all trading nations. Indeed the evolution of this process is such that the new guidelines, which are envisaged to remain in force for a ten-year period, may well be the last application by the EU of a conventional reduced-tariff system.

6.7

The EESC considers that the present rules of origin applied to preferential trading are too complex. As a result, they create unnecessary compliance burdens for EU importers and produce a system which is characterized by opacity and confusion. Such a system can only be conducive to fraud. The EESC would like to see these rules replaced by new rules drawn up on the lines of those currently in force for non-preferential goods.

6.8

A further measure of simplification would be to eliminate duties where preferential treatment results in: ad valorem duties of 3.0 % or less; specific duties of EUR 5 or less.

6.9

In order to give the governments of the developing countries and EU importers time to adjust their planning, any changes in the preferential treatment of a country should be made public one year before entry into force.

6.10

The EESC considers that the new guidelines should be: simple; predictable; easy to administer; consistent; transparent; relevant; equitable; stable over time.

7.1

The EESC endorses the Commission's decision to introduce the new system of GSP with effect from 1 January 2006.

7.2

The EESC urges that advantage should be taken of the opportunity to harmonise, unify and streamline all the rules and procedures of the GSP system in the new guidelines.

7.3

The EESC considers that the Commission should issue a detailed impact assessment with its proposals for the new guidelines.

7.4

The EESC accepts that the existing special incentive arrangements have been ineffectual and advocates that they should be withdrawn; instead, the Commission should lay down internationally acceptable standards based on the fundamental principles of European society; countries that violate any of those standards should have their access to all preferential tariffs temporarily suspended.

7.5

The EESC agrees with the view that there are too many participating nations in the GSP system and argues that these should be reduced as outlined in the text.

7.6

The EESC recommends that the graduation mechanism should be retained but that it should be simplified and rendered more transparent.

7.7

The EESC is concerned by the incidence of fraud in the present system and calls for tighter controls to be introduced.

7.8

The EESC regards the existing preferential rules of origin as being too complex and suggests that they could be simplified on the lines of the current non-preferential rules of origin.

7.9

The EESC believes that simplification of the system should be a primary objective for the new guidelines. It hopes that the proposals which it has made to, inter alia, reduce the number of beneficiary countries, replace the special incentive arrangements by application of the temporary withdrawal mechanism based on clearly-defined standards, replace the current rules of origin by rules based on the non-preferential rules of origin, reduce the interval between the graduation point and the reference period and rationalise the industrial sectors and product categories covered by the scheme will go some way towards achieving this goal.

7.10

This opinion, prepared at the request of Mr Lamy, is an important first step in the consultation of civil society on this issue. The EESC feels that the introduction of the new guidelines should be preceded by further wide-ranging and timely consultation on the proposals with the stakeholders, both in the EU and in the developing countries.

30.4.2004   

EN

Official Journal of the European Union

C 110/40

1.1

The process of forging an Agreement on a Free Trade Area of the Americas (FTAA), launched by the USA, is a wide-ranging initiative designed to transform the American continent into one of the largest trade areas in the world, with a population of over 800 million, an overall GDP of over EUR 11 trillion and a trade volume of EUR 3.5 trillion.

1.2

Despite numerous setbacks to the process and concerns expressed over respect for the deadlines set by the agenda, the fact remains that, as it stands, negotiations are scheduled for completion in January 2005, with a view to the FTAA entering into force in December of that year. Moreover, the failure of the WTO Ministerial Conference held in Cancun from 10 to 14 September 2003 has given new impetus to the FTAA project, the next extraordinary summit of which was recently set for January 2004. A breakthrough was achieved in the deadlocked negotiations at the FTAA ministerial summit held in Miami in mid-November 2003, and the aim remains to keep to the official date for entry into force (December 2005). Nevertheless, the agreement reached at the meeting provides for a reduced form of the FTAA.

1.3

One of the features of the FTAA project, and the main criticism voiced by many sectors of Latin American society, is that it exclusively concerns trade, which would serve only to exacerbate existing imbalances in the region where the USA alone accounts for 77 % of GDP of the Americas and 62 % of all exports from the continent.

1.4

The positions taken by civil society in Latin America and the Caribbean (LAC) with regard to the FTAA project are very different. On the one hand, the business community sees it as a means of gaining access to the large American market, though some companies fear American and Canadian competition; on the other hand, some sectors grouped around the Hemispheric Social Alliance (unions, NGOs, universities) reject it, especially since their main concerns – respect for the environment, workers' rights, social exclusion, foreign debt, democracy and respect for human rights, exploitation of minors and respect for indigenous communities – are insufficiently addressed in the project, if, indeed, at all.

1.5

It is vital for the EU to find a stronger political will to forge relations with LAC countries, particularly since it is in its own economic and commercial interests to do so. The EU must not forget that when NAFTA entered into force, it had significant negative repercussions for European businesses, which lost half their share of the Mexican market. Despite the Association Agreement rapidly negotiated between the EU and Mexico, the lost market share has not been fully recovered.

1.6

The current political and social backdrop in Latin America is conducive to the EU successfully concluding negotiations with its LAC partners, especially MERCOSUR.

1.6.1

The election of Luis Inácio Lula da Silva in Brazil and Néstor Kirchner in Argentina reflect the call for change in the region. Besides the strong interest which they share in developing MERCOSUR, even before concluding the FTAA, they have also expressed their willingness to promote relations with the EU.

1.6.2

Now more than ever there is a clear need for Europe in the troubled Latin-American/Caribbean continent. The EU continues to be perceived as a social model and political benchmark. The great challenge currently faced by LAC countries is to find an alternative economic and social model to the ‘Washington consensus’ and to the plans to integrate with the USA, which is seen as too hegemonic.

1.7

Nevertheless, although there does seem to be a call for greater European involvement in Latin American society, in particular from leading sections of society, the EU must make a concerted effort to involve civil society more closely in its strategy. Decisive political commitment, coupled with adequate and effective information, and the involvement of civil society, is the only way to show that the project is mutually beneficial. The EU must not make the same mistake as the FTAA.

1.8

The EU must also take note of the failure of the WTO multilateral negotiations in Cancun and bear in mind that its international partners, like the USA, have decided to use other means, such as bilateralism or bi-regionalism, to further international trade. In the eyes of the United States the Cancun failure is another reason for pressing ahead with the FTAA negotiations. Against this backdrop, it is clear to the EESC that the EU and MERCOSUR must show a stronger political will to conclude an Association Agreement by overcoming the hesitations and obstacles which any negotiations entail. With a view to achieving the same objective with the Andean Community (CAN) and the Central American Common Market (CACM), the Council of the European Union must give a mandate to the European Commission so that it can launch negotiations. Otherwise, the EU will see its hopes of being a strategic partner of Latin America diminish, potentially weakening its role in the process of devising new rules for international trade and global governance. For cultural, political and economic reasons, the LAC countries are natural allies and Europe needs them if it is to redefine its role on the world political stage.

1.9

Therefore the EU cannot afford to adopt a reactive policy to its LAC partners. It should not wait for progress in the FTAA negotiations before proceeding with the EU/LAC strategic partnership. The EU must show real leadership in its approach to this political and international trade issue.

1.10

The EU cannot remain indifferent to the aspirations and just concerns of the peoples of LAC and should therefore give a new political impetus to relations with this region and step up its efforts to fulfil the commitments agreed at the Rio Summit in 1999 and the Madrid Summit in 2002. The EU must therefore redefine its strategy based on the following points:

2.1.1

Although the idea of uniting all the countries of the Americas is a long-standing one, the lack of consensus between the countries has hitherto prevented it from coming to fruition. The Free Trade Agreement of the Americas (FTAA), which is currently being negotiated, is a serious attempt to achieve this. The process is now entering its final phase.

2.1.2

The project is based on a North American initiative of the 1980s. In May 1982 the Reagan administration launched the Caribbean Basin Initiative, with the aim of setting up an economic partnership programme oriented towards trade liberalisation and private sector initiative. In January 1988 the US government signed a free trade agreement with Canada. Talks on extending this agreement to Mexico were initiated by the Bush (senior) administration and formalised under the Clinton administration, with the conclusion of the North American Free Trade Agreement (NAFTA).

2.1.3

In 1990, President Bush (senior) announced his ‘Enterprise for the Americas Initiative’ (EAI) project, which aimed to create a free trade area for the hemisphere and establish an investment fund to encourage economic reform, attract international investment and alleviate the debt burden of the Latin American states.

2.1.4

For their part, the governments of the LAC countries embraced the idea of a broad economic alliance with enthusiasm.

2.1.5

On coming to power, the Clinton administration took up the idea of uniting the Americas via a free trade agreement. The first Summit of the Americas was held in Miami in December 1994 and was attended by the continent's 34 heads of state and government, with the exception of Cuba (1).

2.2.1

At the Miami Summit, the participants adopted a Plan of Action and Declaration of Principles setting out the guidelines and key principles of the initiative, the primary objective of which is to establish a free trade area by phasing out barriers to trade and investment.

2.2.2

The Plan of Action, which is intended to promote prosperity through economic integration and free trade, contained three other chapters: preserving and strengthening democracy; eradicating poverty and discrimination; and sustainable development and conserving the natural environment.

2.2.3

Revisions were made to the Plan of Action at the Second Summit of the Americas held in Santiago in April 1998, but its basic objectives remained unchanged. The four chapters were now: education; democracy, justice and human rights; economic integration and free trade; eradication of poverty and discrimination. Although the initiative continued to focus on economic issues, at the request of Brazil, in particular, emphasis was also placed on social issues through education and the alleviation of poverty.

2.2.4

The plan of action subsequently underwent further changes. The chapter on education, on which no progress was made in the negotiations, was dropped. However, at Canada's instigation, at the third Summit of the Americas, held in Quebec in April 2001, the theme of communications (access to new information and communication technologies) was included alongside those of strengthening democracy, increasing economic prosperity and developing human potential.

2.3.1

These summits of heads of state and government – which are held every three or four years and are designed to lend support to the main policy outlines drawn up at other levels of negotiation and signal the parties' political commitment – are part of the extremely complex structure of the negotiation process. The trade ministers, who meet every 18 months or so to set the overall priorities of the FTAA are the key political element in the negotiating structure.

2.3.2

The deputy trade ministers jointly form the Trade Negotiation Committee (TNC), which plays a decisive role by directing the work of the nine FTAA Negotiating Groups, taking decisions on the general outline of the future free trade agreement and institutional matters and guaranteeing the transparency of the negotiation process.

2.3.3

The remaining pillar of the FTAA is a technical one, comprising the nine Negotiating Groups of negotiators and experts in the areas of 1) market access, 2) investment, 3) services, 4) government procurement, 5) dispute settlement, 6) agriculture, 7) intellectual property rights, 8) subsidies, anti-dumping and countervailing duties, and 9) competition policy.

2.3.4

A Tripartite Committee formed by the Organisation of American States (OAS), the UN Economic Commission for Latin America and the Caribbean (ECLAC) and the Inter American Development Bank (IADB) provides technical and analytical support to the various groups.

2.4.1.1

The FTAA initiative has gone through several phases of negotiations since the Miami summit. The basic structure of the initiative was defined during the preparatory phase, from 1994 to 1998. Four ministerial meetings were held (June 1995 in Denver, March 1996 in Cartagena, May 1997 in Bélo Horizonte and March 1998 in San José).

2.4.1.2

The guidelines for the FTAA negotiations were adopted during this preparatory phase. It was decided that decisions would be adopted by consensus, that the FTAA would represent a single undertaking and that it would comply with WTO regulations and disciplines. At the insistence of MERCOSUR, particularly Brazil, but against the wishes of the USA, it was ultimately decided that the FTAA could be compatible with other regional or bilateral agreements and that states could accede to the agreement either individually or as a regional bloc. Thereafter, several regions spoke with one voice in the FTAA negotiating bodies, notably the Andean Community (CAN), MERCOSUR, the Caribbean Community (CARICOM) and subsequently also four countries from the Central American Common Market (CACM), known as CA-4 (2).

2.4.1.3

During the preparatory phase, the parties also took steps to gather information, acquire knowledge and lay the foundations for the future negotiations.

2.4.2.1

At the Santiago Summit, the heads of state and government made a commitment to proceed with the Americas project. The ministers met twice during the second phase (November 1999 in Toronto and April 2000 in Buenos Aires) and announced that measures to facilitate trade would come into force in January 2001. In addition, the Negotiating Groups presented a preliminary draft agreement on the FTAA to the ministers concerned.

2.4.2.2

Following pressure from civil society, it was decided to make the preliminary draft agreement available to the public in order to make the process more transparent. The ministers reaffirmed their commitment to finalise the project by January 2005 so that it could enter into force in December 2005.

2.4.3.1

The third phase of the negotiations began with the Third Summit of the Americas in Quebec in April 2001, when the heads of state and government issued a declaration setting out wide-ranging social and economic undertakings. A clause was adopted on democracy: i.e. agreement was reached that consultations would be held if a signatory country abandoned its democratic institutions. No sanctions were specified.

2.4.3.2

The aim of the third phase of the negotiations was to prepare a more detailed version of the future agreement. Accordingly, at the 7th ministerial meeting held in Quito in November 2002, a new draft agreement was published setting out the guidelines for the negotiations over the coming 18 months. The ministers also agreed to launch a Hemispheric Cooperation Programme, aimed at strengthening the ability of the region's smaller economies to participate in the FTAA. The Quito meeting marked the beginning of the final phase of the negotiating process, which is being chaired jointly by the USA and Brazil.

3.1

The FTAA would be one of the largest free trade areas in the world, with a market of over 800 million people, an overall GDP of over EUR 11 trillion and trade amounting to EUR 3.5 trillion.

3.2

However, one characteristic feature of this process is that it is asymmetrical and polarised towards the USA. For all but a few of the countries, the USA is the primary trading partner. The sole exceptions are Argentina, Paraguay and Uruguay, whose main foreign trading partner is Brazil.

3.3

In 2000, the North American economy alone represented 77 % of the GDP of the Americas as a whole, and 62 % of its exports. Brazil, Canada and Mexico represented, respectively, 6 %, 5 % and 4 % of the region's GDP, whilst the remaining 30 countries produced 8 %. Small countries such as Nicaragua and Haiti together represented only 1/2000 of the total. NAFTA and MERCOSUR represented 87 % and 9 % of total GDP and 90 % and 6 % of hemispheric trade, respectively.

3.4

The data also point to an asymmetry in per capita GDP: the USA is in first place, with a per capita GDP of EUR 34,400, followed by Canada (EUR 21,930), Argentina (EUR 6,950), Uruguay (EUR 6,000), Mexico (EUR 5,560) and Brazil (EUR 3,060). At the other extreme, the per capita GDP of Nicaragua and Haiti was EUR 745 and EUR 480 respectively. The project therefore incorporates very different economies with widely varying levels of development (3).

3.5

These asymmetries and inequalities raise the problem of the potentially profound impact of economic integration on the small economies, for whom no development fund or security net has been provided. The stakes involved in integrating these economies into the FTAA process are considerable. These 25 countries (4) face a number of handicaps in the negotiation process. One major obstacle is the lack of sufficient financial and human resources to pursue the negotiations. To date, the only measure taken to compensate for these asymmetries is the introduction of longer deadlines for trade liberalisation in small economies.

3.6

The effects of the absence of a social clause are likely to be even more marked in view of the fact that, over the past ten years, orthodox structural adjustment policies have led to steep rises in unemployment and increased poverty in the LAC, where, according to ECLAC, the number of poor people amounted to more than 220 million, or 43.4 % of the population, in 2002 (5). The continent's social, economic and political problems have not facilitated the progress of talks since the Quebec Summit.

3.7

Despite a sustained twenty-year reform programme, the LAC economies are still finding it difficult to ensure rigorous, stable and competitive economic growth. A study by the ECLA shows that for the second year running, there has been negative growth in GDP, with a figure of -1.9 % for 2002, thus completing a period which it describes as ‘half a lost decade for the region as a whole’.

3.8

The situation is particularly serious in Argentina, which has been facing an unprecedented crisis since December 2001. After the crisis broke, Argentina preferred to move closer to its MERCOSUR partners in order to strengthen regional integration, establish closer ties with Europe and distance itself from the strategy of automatic alignment with Washington. The President of Brazil, Luiz Inácio Lula da Silva, has also made the development of MERCOSUR and relations with the EU a priority.

3.9

Brasilia does not intend to make a drastic U-turn in its position with regard to the FTAA. Its strategy seeks, above all, to organise negotiations between MERCOSUR, the CAN (Andean Community), Chile, the Caribbean countries, Guyana and Surinam, with a view to establishing a Free Trade Area of South America (FTASA) that would enable LAC countries to strengthen their position in the FTAA negotiations. In December 2002 the parties involved in the project agreed on a timescale, including the abolition of customs barriers by the end of 2003 and the entry into force of the agreement by 2005. Consistent with this idea of ‘linking the whole of South America to MERCOSUR’ by the end of 2003, the Lula administration succeeded in getting Peru to sign an Association Agreement with MERCOSUR (August 2003) which is very similar to those concluded with Bolivia in December 1995 and Chile in June 1996. MERCOSUR also hopes to conclude an Association Agreement with Venezuela and launch another with Colombia. In terms of its objectives and timescale, this project offers an alternative to the FTAA process.

3.10

For its part, the USA has not hesitated to use bilateral agreements – as demonstrated by the signature of an agreement with Chile in December 2002 – to push the FTAA forward, particularly since the adoption of the fast track or TPA (6) in July 2002. Following the WTO Ministerial Conference in Cancun, the trend towards bilateralism is likely to gather momentum.

3.11

However, the protectionist measures recently adopted in the USA are having an impact on the TPA. After increasing the tariffs protecting the US steel and wood product industries, the USA has adopted a Farm Bill which grants $180 billion of subsidies to agricultural producers over ten years. These protectionist measures are re-igniting tensions between the USA and certain Latin American countries, principally Brazil.

3.12

Export subsidies have become one of the main obstacles to the successful completion of the FTAA. Many Latin American countries are pressuring the USA to lower their agricultural subsidies. However, the Bush administration is pushing for the issue of agricultural subsidies and use of ‘anti-dumping’ and compensatory duties to be discussed within the WTO. But the failure of the multilateral negotiations in Cancun illustrates the difficulties which rich countries, like the USA and the EU, encounter especially when agricultural issues are addressed in the context of international negotiations.

3.13

Recognising the failure of the multilateral trade negotiations, the USA announced at the closing press conference of the summit that it was prepared to work at bilateral and regional level. If the USA follows up these words, it is likely that the American negotiators will return to the agricultural negotiating table in connection with the FTAA project. That would enable the pan-American integration process to surmount one of the most difficult obstacles and, consequently, to make significant progress.

3.14

Nevertheless, despite the TPA, the executive's negotiating powers are constrained by the Congress. The Trade Act (establishing the TPA) provides for review procedures, which may well prove onerous, especially in connection with subsidies and ‘anti-dumping’ and compensatory duties. It also provides for a consultation procedure, which gives Congress a substantial right of supervision over the negotiations.

4.1.1

The FTAA's governmental process is followed by citizens' organisations, whose participation in the FTAA is envisaged. Going beyond that participation, these organisations meet alongside ministerial and presidential meetings in order to influence the course of the negotiations.

4.1.2

Civil society participation mechanisms are divided between the initiatives set up by the bodies involved in the FTAA process and those emanating from social movements. As part of the FTAA process a mechanism has been set up by the committee of government representatives on the participation of civil society, in order to pass on the proposals originating from employers, workers, environmental groups and academic circles. This is an indirect form of participation. Indeed, these groups can write to the committee, which will then forward their recommendations to the Trade Negotiations Committee (TNC) or the appropriate negotiation group.

4.1.3

In order to encourage the participation of civil society, government officials responsible for the Americas project held a regional symposium on the FTAA at Mérida in Mexico in July 2002. This first regional forum for public discussion attracted 100 members of the public. The aim was also to provide information and explanations on the process itself.

4.1.4

A second initiative was taken at the ministerial meeting in Quito in November 2002: the trade ministers separately met representatives of the private sector and those of civil society (environmental groups, trade unions, parliamentarians and indigenous peoples). It was the first time that representatives of civil society had been able to address government ministers directly.

4.2.1

Business circles in the Americas took an interest in the FTAA project very early on. Indeed, since the first ministerial meeting, in Denver in 1995, they have tried to organise meetings in parallel to the official process in order to promote the private sector's interests. More than 1,500 business people have been involved in these meetings through the Americas Business Forum (ABF) which groups together business circles on a sectoral and national basis.

4.2.2

The Americas Business Forum, which is in favour of the Americas' integration project, seeks to contribute to the debate by making technical and data analyses of the strategic objectives and the aspirations of the private sector. It also helps to distribute information on the process and establish personal and institutional links between heads of companies and the organisations of the Americas.

4.2.3

During the annual meetings of the Forum, conferences and seminars are held on key themes concerning the integration of the hemisphere. Although the annual meetings planned by the Forum are not included officially in the negotiating process, objectively speaking the work the Forum carries out has a strong influence on the shaping of the project. Indeed, the recommendations made by the private sector are taken into account by each of the negotiation groups. One of these recommendations concerns the rapid implementation of measures to facilitate trade, and the leaders have in fact agreed that the measures should come into force before the end of the negotiations.

4.2.4

As regards the other sectors of civil society, such as the trade union movement, NGOs and university research centres, the contribution of trade is much less obvious. The social organisations have taken their own steps to get their views across on the integration process. Among the various initiatives is that of the Hemispheric Social Alliance (HSA), which is a major network of inter-American social organisations and movements. It also covers a wide range of positions which vary from reform to rejection of the FTAA project. Although this initiative materialised in 1997, civil society mobilised much earlier than that.

4.2.5

Just like the employers' sector, the trade unions took a very early interest in the Americas project. They, too, were present on the occasion of the ministerial meeting in Denver. The trade union movement, supported by the Inter-American Regional Organisation – the American branch of the International Confederation of Free Trade Unions (ICFTU) – set up a parallel conference at the end of which a declaration was drawn up setting out the concerns and demands of the participants.

4.2.6

At the next ministerial meeting in Cartagena, the trade union movement did not confine itself to drawing up a new document for consideration: it also sought to exert pressure on the government representatives. Moreover, in their conclusions the latter stressed the importance of encouraging better recognition and promotion of workers' rights and the need for their respective governments to envisage appropriate measures in this field.

4.2.7

The movement was extended to include other social groups. Thus, at the third ministerial meeting, in Belo Horizonte in May 1997, delegates of the coalitions opposed to free trade (NGOs, certain research centres, environmental associations, feminists and indigenous peoples) took part in the meeting of representatives of the trade union movement of the American continent, giving rise to the Hemispheric Social Alliance which appeared as such the following year when the Second Summit of the Americas was held.

4.2.8

To mark the occasion, the HSA held the first Summit of the Peoples of the Americas, from which emerged a document entitled Alternatives for the Americas. A second Summit of the Peoples was held to coincide with the Third Summit of the Americas in April 2001 in Quebec, bringing together more than 2,000 representatives of movements and organisations throughout the Americas, including Cuba.

4.2.9

Mindful of the objective influence of business circles in the context of the FTAA negotiations, the HSA seeks to promote a different type of project by proposing the inclusion of social and environmental measures in the future agreement. In this way it hopes to guarantee employment and the quality of jobs, and to avoid ‘ecological dumping’ by taking account of environmental costs in exports. But many of the Latin American and Caribbean (LAC) governments oppose measures of this type, regarding them as a pretext for protectionism. In addition, since 2001 the American position has not been conducive to progress in these areas. In contrast to the developments with NAFTA, the plan to include clauses on employment and the environment lost ground in the official FTAA negotiations, with the USA repeatedly signalling its unwillingness to address these issues in the discussions.

4.2.10

The Hemispheric Social Alliance also made known its opposition to the systematic liberalisation of government procurement, health services, education and investment.

4.2.11

The HSA has also condemned the lack of transparency in the process. It is currently trying to organise a consultation on the FTAA project, to be carried out over a year between 2003 and 2004 and covering the whole Americas region.

4.2.12

In this movement of opposition to the creation of the FTAA, as at present negotiated, certain parliamentarians from the Americas have also sought to draw attention to their views on the project. Members of more than 164 provincial or national parliaments, as well as delegates from regional parliaments in 34 countries involved in the FTAA negotiations and Cuba, have met several times in a forum called the Parliamentary Conference of the Americas (COPA) in order to express their misgivings with regard to the Americas project.

4.2.13

In the declaration it adopted at its second general assembly in July 2000, the COPA called on the heads of state and government to take account of the level of development of the countries involved in the FTAA project, and to ensure that parliamentarians from all quarters took part, in order to encourage transparency.

4.2.14

Concurrently with the ministerial meeting in Quito, there was a continental meeting of parliamentarians who issued a resolution rejecting the FTAA and proposing that the governments should opt instead to strengthen the Latin American and Caribbean integration agreements, such as MERCOSUR, the CAN, CARICOM, the CACM etc.

4.3.1

The attitudes of civil society groups in the LAC region towards the FTAA project vary. The groups which oppose the FTAA regret that key elements of civil society, such as unions and representative NGOs, have not been effectively involved in the decision-making process and that only the American Business Forum, which, by contrast, supports the FTAA project, has had direct access to negotiators and a clear influence on working documents during the negotiations.

4.3.2

The main fear is that the process will continue in a non-transparent way and that the results of the negotiations will be presented to civil society as a ‘fait accompli’, leaving them with little scope for influence.

4.3.3

The unions and other social players grouped around the HSA complain that government and big business are continuing to shape the future agreement to integrate the Americas without taking into account their main concerns: the environment, workers' rights, job insecurity, unemployment, poverty, social exclusion, the widening gap between the various economies of the continent, agricultural protectionism and American export subsidies affecting LAC countries, foreign debt, democracy (the call for governments to organise consultation on the FTAA), as well as respect for human rights, exploitation of minors and respect for indigenous communities.

4.3.4

Although the majority of social movements (NGOs, trade union organisations, research institutes, etc.) support the process of regional integration, they have expressed serious misgivings on integration agreements such as the FTAA. In their opinion, steps to achieve integration (such as MERCOSUR) are seen as a potential benchmark for integrating the Americas, as they include political, social, cultural and strategic aspects. On the other hand, the FTAA, in its current form, would only exacerbate the imbalances between the USA and LAC, especially when the former pursues protectionist policies affecting the international competitiveness of the latter.

4.3.5

The social players are in favour of integration that is not limited to trade and, in contrast to the great majority of LAC governments, they oppose an agreement that fails to provide any guarantees on social and environmental matters. They call for respect for human rights to be properly taken into account. They have stated that they would be less inclined to support a USA-LAC agreement than an EU-LAC agreement. They claim to value not only the emphasis that the EU places on social, environmental and human rights issues, both internally and at international level, but also the consistency with which these requirements are observed. However, they complain of the lack of energy and will demonstrated by the EU's strategy on Latin America.

4.3.6

The HSA also calls for governments to make the negotiations transparent and to hold an open debate on the FTAA with all components of civil society in order to examine the viability and potential consequences of such an agreement for the countries of the Americas.

4.3.7

As regards the business sector, many companies in the LAC countries, headed by agrobusiness, see the FTAA as a way of penetrating the vast US market. They feel that the FTAA represents an important means of breaking out of the vicious circle of debt of the 1980s, consolidating liberal reforms and emerging from international isolation. Others are less enthusiastic, however. This is the case, for example, with the petrochemicals sector in Latin America, which reiterated its opposition to the FTAA at its last meeting, held (on 11 November 2003) in conjunction with the annual petrochemical meeting of the Latin American Petrochemical and Chemical Association (APLA).

4.3.8

Some business sectors in Latin America, and particularly in Brazil, are reluctant to move forward in the FTAA negotiations. This applies particularly to some companies which are very concerned about the competition from American and Canadian firms which could result from the conclusion of the FTAA. In contrast, a large number of firms in the secondary and tertiary sectors in the USA and Canada see the FTAA as an opportunity to penetrate Latin American markets, particularly the Brazilian market.

4.3.9

Nevertheless, there are signs that the position of the Brazilian private sector is shifting. Although for a long time the national business community and the Brazilian foreign ministry shared the same negative view of the FTTA project, the former have started to warm to the idea of greater trade liberalisation and now profess to be willing to face external competition. The national private sector has begun to put pressure on the Lula administration to soften its stance in the FTTA negotiations so that the agreement can be concluded on schedule.

4.4.1

There is a real gulf between the vision of civil society and that of government as to the course to be followed towards integration of the Americas. The LAC governments, which are predominantly concerned with economic liberalisation and, in particular, with penetrating the vast US market, are negotiating a continental trade agreement with the aim of encouraging the US to end its protectionist agricultural policy.

4.4.2

Following the example of MERCOSUR members, they believe the FTAA may encourage the EU to press ahead with its negotiations with LAC countries and with the WTO multilateral negotiations. In their opinion, the FTAA, the negotiations with the EU and the WTO are three inter-linked and inter-dependent processes. The firm position adopted by the developing countries, through the Group of 21 (G21, also called G20 plus), in the face of the reluctance of the rich countries to make concessions in the agricultural field during the Cancun Ministerial Conference and the breakdown of these negotiations could, to some extent, be interpreted as a setback for multilateralism. The stalled multilateral negotiations seem to have opened the way for regional, bilateral and bi-regional strategies. As was pointed out above, the USA makes no secret of its desire to push forward with such agreements. Emerging powers like China and Brazil have also indicated their willingness to move down this road.

4.4.3

The South American bloc is of the opinion that, in contrast to the offer made by the USA concerning agriculture, the EU's offer is far from clear. It feels that simple negotiation on agricultural products is not enough; export subsidies must also be tackled. On these issues, the FTAA appears to offer more hope than the EU negotiations. Nonetheless, the negotiations with the EU appear easier than those on the FTAA: the former entail bi-regional negotiations while the latter involve a large number of players and sometimes very different proposals. In the negotiations on the EU-MERCOSUR Association Agreement, the EU, whose common standpoint is represented by the European Commission, has consistently encouraged the MERCOSUR countries, with a measure of success, to establish a common position of their own. In bi-regional negotiations the proposals tabled by the parties are, in this way, limited to two, which makes negotiation easier.

5.1.1

As a result of various historical factors, certain European countries (in particular Spain, France, the United Kingdom, Portugal and the Netherlands) have had long-standing and more or less close bilateral relations with LAC countries. Despite the cultural diversity and heterogeneity of LAC countries, their cultural identity is deeply imbued with the values which shaped the character and history of Europe. The prevalence in this part of the world of such enlightened philosophical ideals as democracy, the rule of law, the idea of liberty and human rights are conducive to closer EU-LAC relations.

5.1.2

Despite this, formalising Euro-Latin American relations is a new development. Since the beginning of the 20th century, Latin American has developed unequal and almost exclusive diplomatic relations with the USA. On the other hand, Europe has always had formal relations with the Caribbean countries (except for Cuba), under the ACP agreements.

5.1.3

Although Europe's return to Latin America began almost thirty years ago, it was not until the 1990s that – largely as a result of the impetus provided by the accession of Spain and Portugal – the EC/EU (7) developed a strategy to forge relations with the entire LAC area. Acting on the European wish to develop preferential relations with Latin American countries, the EEC signed a series of sectoral, ‘first generation’ agreements in the 1960s, followed by ‘second generation’ agreements in the 1970s, covering a range of sectors.

5.1.4

The armed conflicts in Central America during the 1980s and the establishment of European political cooperation led the EEC to play an important political role as intermediary. The talks held in San José (Costa Rica) in September 1984 brought together the foreign affairs ministers from the EEC, Spain and Portugal alongside representatives from Central America. The talks aimed to restore peace and discuss measures to bring democracy to the continent and marked a renewal of EEC/Latin America relations (culminating in the ‘San José process’).

5.1.5

When Spain and Portugal became members of the European Community, this process of political dialogue was extended to the rest of the region, with the discussion partner being the Rio Group. The Rio Group was set up in 1986 by Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela as a forum for the discussion of political problems, the development of external relations and regional integration issues. It was subsequently joined by other Latin American countries. The Group was the natural negotiating partner for the EC/EU in Latin America in the field of political dialogue. Bi-regional dialogue started in 1987 and was institutionalised in 1990.

5.1.6

Relations between the two continents were further boosted by the end of bi-polarism, the will shown by Europe to make the Community a player on the world stage, political stability, the return to democracy and Latin America's adoption of a more open economic policy. Historic and cultural factors, common principles and legal and philosophical values also played a part in facilitating rapprochement between the two continents.

5.2.1

Whilst the USA established NAFTA and launched the FTAA project in 1994, Europe sought to secure a different type of partnership with the Latin American countries. Mindful of the diversity of Latin America, the EU tried to develop a strategy based on different approaches, according to national and regional situations. In other words, it tried to take account of the heterogeneity of the continent, which the FTAA does not do. Therefore the EU proposed a partnership based on dialogue organised in sub-groups at regional level, using a range of instruments tailored to the specific political and socio-economic situations of each group.

5.2.2

The new European strategy drawn up by Commissioner Manuel Marin from the Santer Commission and ratified by the Council in October 1994 sought to establish a form of association based on the third-generation and the new, fourth-generation agreements with Latin America. The former emphasise regional integration and cooperation and contain a future developments clause allowing signatories to step up their level of cooperation and a democracy clause guaranteeing respect for basic principles reflecting common values. The fourth generation agreements include these measures and also provide for the conclusion of trade agreements.

5.2.3

The austerity measures and privatisations carried out during the early 1990s in the Latin American countries attracted private investment from Europe, thereby promoting rapprochement between the two regions. Between 1996 and 1999, the EU provided the lion's share of inward investment into Latin America, which became the prime destination for European investment in emerging markets. Over this period, European investment grew from $13.289 billion to $42.226 billion. In addition, bi-regional trade doubled between 1990 and 2000. Export of goods from the EU to Latin America grew from EUR 17 billion to just over EUR 54 billion, and exports from Latin America to the EU grew from EUR 27 billion to EUR 49 billion. The EU thereby became the second largest investor and trading partner of Latin America, and the largest for MERCOSUR and Chile.

5.2.4

This doubly positive situation, i.e. confirmed political will on both sides and clear economic rapprochement, gave rise to the idea of boosting relations in qualitative terms by holding a summit in Rio de Janeiro in June 1999 bringing together the 48 heads of state and government of the EU and LAC, including Cuba.

5.2.5

The summit was a historic milestone. It showed the EU to be an increasingly mature player on the international stage and the growing interest of the industrialised countries in the LAC region. The summit also aimed to provide a response to the unipolarism of the post-cold war period and instead favour regionalism as a new force in international relations. Some were quick to see this as the first step towards the creation of a multi-polar world, no longer dominated by the USA.

5.2.6

The summit produced two documents: a declaration and an action plan designed to form the basis of a new strategic partnership between the two sides of the Atlantic. The 69-point declaration called for the strengthening of relations on political, economic, scientific, cultural, educational, social and human issues, with a view to establishing a strategic association. The accompanying action plan contained 55 priorities.

5.2.7

Owing to the number of areas covered and priorities defined, these documents failed to focus on a clear line of action. Consequently, the bi-regional follow-up group of high-level officials identified 11 priorities at its first meeting at Tuusula (Finland, November 1999) (8). Some progress has been made regarding priorities 5, 7 and 8. In the case of priority 5 the Bi-regional Coordination Mechanism was established to combat drugs. The progress made with regard to priority 7 is due to the signing of Association Agreements with Mexico and Chile. Finally, in the case of priority 8, a specific bi-regional dialogue on science and technology was launched. This led to the Brasilia Ministerial Conference (March 2000) and the adoption of the Brasilia Statement and an EU-LAC Action Plan on science and technology. The latter, which identified health and quality of life, sustainable development and urbanisation, cultural heritage and the information society as priority areas for action, was presented to the Second EU-Latin America/Caribbean Summit held in May 2002 in Madrid.

5.2.8

Nevertheless, despite the drawing-up of the Tuusula list of priorities and the achievement of some objectives, the lack of clear direction in bi-regional relations was again apparent at the Madrid Summit.

5.2.9

The Commission budget provides for EUR 323 million a year, on average, over the period 2000-2006 (9) for the whole of Latin America, which is clearly inadequate given the importance of the project and all that is at stake. Thus Latin America continues to be one of the regions which benefits least from Community aid.

5.2.10

Regarding the negotiations themselves, the Madrid summit, which was held in the political context of post-11 September, produced little in the way of tangible results. Thus the EU chose to focus on issues of security and terrorism which dominated discussions, whilst LAC countries were far more interested in economic and trade aspects. This divergence of priorities had already been noted at the Rio summit, at which Europe focused on the themes of governance and poverty, whilst the LAC countries were more interested in economic relations and their repercussions on employment. It is essential that the third summit, which will be held in Mexico in May 2004, define an agenda that is built around a true common denominator.

5.3.1

The main achievement of Rio was undoubtedly the launch of trade negotiations between the EU and MERCOSUR. The agreement concluded between Mexico and the EU entered into force in 2000 while Chile concluded an agreement with the EU at the Madrid summit in 2002. These agreements included the three pillars of the European strategy for Latin America: political dialogue, cooperation and economic and commercial integration. Apart from the agreement with Chile, however, it is hard to say what progress was actually made in Madrid with regard to this new strategic alliance.

5.3.2

Paradoxically, the Latin America regional process, as advocated by the EU, has so far failed to conclude association agreements with Europe. At the Madrid summit, the EU proposed launching negotiations with the CAN and the CACM through political dialogue and cooperation, which came to an end in October 2003. On the other hand, the start of trade negotiations depends on the conclusion of the Doha Round of multilateral trade negotiations, which is scheduled for the end of 2004, and developments within the CAN and CACM.

5.3.3

For its part, MERCOSUR, which has forged the strongest political and economic ties with Europe, has still not presented its overall offer for the negotiations on the lowering customs tariffs, particularly on agricultural products. Should agriculture prove a major sticking point in the negotiations, it is up to the EU to ensure that any association agreement does not clash with the political objectives of the EU, such as public health, intellectual property and sustainable development.

5.3.4

Given the European strategy of negotiating with these regional blocs, it is surprising that the EU has given priority to Mexico and to Chile, both countries being far from the integrationalist model and closer to Washington's plans for hemispheric integration. So, contrary to the Joint Declaration and Action Plan approved at the Rio summit, which sought to steer EU-LAC relations towards a new strategic relationship, the EU's actions to date have been a reaction to the FTAA project.

5.3.5

Most regional groupings in Latin America wish to develop trade relations with other players on the world stage besides the United States, first and foremost with the EU. By diversifying their external relations and especially by developing political and economic ties with the EU, LAC groups, like MERCOSUR, hope to be perceived as much less peripheral in international affairs. A more active approach by the EU in this regard could make an important contribution to the continuation and consolidation of these regional groupings, and help to change the shape of alliances and increase the clout of LAC countries in the FTAA negotiations. This new strategic partnership could also enable both sides to make their views heard in multilateral forums, when their views and interests coincide.

5.3.6

However, the EESC takes the view that the preferential agreements which the EU will conclude with MERCOSUR, the CAN and the CACM must comply with Article 24 of GATT/WTO (10).

5.3.7

These future agreements must also take account of the interests of large and small agricultural undertakings, both in Europe and LAC, and respect social harmony in the rural community.

5.4.1

Recognising the EU's strategic commitment to strengthening its relations with LAC, the EESC closely monitors developments in these relations. It has, on many occasions, expressed its views on the need for greater involvement of organised civil society in all stages of the process.

5.4.2

In various opinions on Latin America (11) the EESC has highlighted the need, with regard to political and trade issues, to strengthen the social aspects of relations between the EU and the regions of Latin America and the Caribbean in terms of both respect for human and workers' rights and strengthening social cohesion.

5.4.3

With a view to increasing the involvement of civil society, the EESC plays an active role in the preparation of meetings between representatives of organised civil society in the EU and LAC. Meetings were held in Rio de Janeiro (1999) and Mexico (2002) in conjunction with the summits of heads of state and government from the EU, Latin America and the Caribbean.

5.4.4

To the same end, the EESC is currently preparing a third meeting of organised civil society, to be held in Mexico in 2004 in conjunction with the next summit of heads of state and government.

5.4.5

A good example of this strategy is the meetings held between the EESC and the MERCOSUR Economic and Social Consultative Forum (FCES). The purpose of these meetings is to promote greater involvement of organised civil society in all areas of the bi-regional negotiations conducted in connection with the future association agreement between the EU and MERCOSUR.

5.4.6

At the last meeting between the EESC and the FCES held on 5 and 6 May 2003, the two institutions called on the negotiating parties to strengthen the social aspects of the agreement under negotiation by making explicit reference to MERCOSUR's Workers' Rights Declaration (the Declaración socio-laboral), the EU Charter of Fundamental Rights and the ILO's Declaration of Fundamental Principles and Rights at Work of 1998.

5.4.7

The two organisations have also called for concrete forms of participation in the negotiations on the association agreement, arguing that the success of the process is conditional on the full involvement of representative civil society organisations from the two regions in all areas of discussion.

5.4.8

As regards other institutional meetings, those of sectoral organisations which seek to promote the Transatlantic Dialogue, such as the EU-MERCOSUR Business Forum and the newly established EU-MERCOSUR Labour Forum, and to influence policy decisions that affect their interests are likely to assume growing importance.

6.1.1

Many Latin American countries are currently facing economic difficulties and are desperately seeking economic opportunities. Some of these countries which are also CAN or MERCOSUR members would be willing to give up their regional commitments in favour of accepting the proposals of the Bush Administration and signing bilateral trade agreements. Among these countries are Colombia, Costa Rica, Guatemala, Peru and El Salvador, who are giving serious consideration to this option in the post-Cancun world. These countries, together with Chile and Mexico, are now seeking to dissociate themselves from G21, following the example of El Salvador, which left the group shortly before the end of the Cancun summit.

6.1.2

Despite the first cracks in G21, it is must be emphasised that, following the fiasco of the Seattle Ministerial Conference in December 1999, the world's leading trading powers, the United States, Japan and the EU, now have to rely on countries in the multilateral negotiations, such as South Africa, Brazil, China and India (referred to today as emerging powers), who are in a position to form coalitions, like G21, which are capable of blocking progress in the negotiations. Group 21 is supported in an ad hoc manner and for different reasons by a front of 90 poor, predominantly African, countries, which are not however members of Group 21.

6.1.3

One of the main reasons for setting up a coalition of this kind is the difficulty developing countries have in gaining access to rich countries' markets. The developing countries demand that the Americans, Europeans and Japanese abolish their agricultural subsidies, which they consider to have a destabilising impact on their economies. Although the EU showed a willingness to compromise by proposing to isolate the use of subsidies which have been demonstrated to have a detrimental effect on farmers in developing countries, it refused to commit itself to a date for eliminating these subsidies, as provided for in the agreement which the Europeans and the Americans signed in mid-August 2003 in preparation for the Cancun summit.

6.1.4

A second source of contention which has emerged alongside agriculture is the issue of the ‘Singapore subjects’, so called because they were first discussed at the Ministerial Conference in Singapore in 1996. The Singapore subjects (investment, competition, transparency of public procurement markets and trade facilitation) are of great importance for the rich countries but problematic for the developing countries.

6.1.5

At Cancun some developing countries reiterated their opposition to the launch of negotiations on the Singapore subjects and the liberalisation of services. Faced with the dogged determination of the rich countries, the poorest countries, which up till then had always been marginalised in the negotiations because of their minor importance in world trade (less than 1 %), stood their ground on this issue.

6.1.6

The poor handling of the cotton issue reinforced this alliance, which had been formed in Geneva a few months before the Cancun summit. The final text offered nothing concrete on a subject of vital importance for the Sahel countries (Mali, Burkina Faso, Benin, Chad), which are among the world's poorest nations, while the negotiations that opened in Doha were made a ‘development round’, at the initiative of the EU. The United States refused to make any reduction in the $4 billion worth of subsidies which it grants to its producers every year. Against this backdrop, the developing countries refused to fall into line.

6.1.7

Given such firmly entrenched positions, the fiasco of the multilateral negotiations in Cancun was inevitable.

6.1.8

The Cancun failure highlights not only the growing capacity of the countries of the South to organise to defend their interests but also a lack of judgement, particularly by the EU with regard to the G21 alliance. The failure of the talks is a further threat to global governance. Since the end of the Second World War, international relations have been regulated by a framework of rules and international treaties. This body of rules, often perceived as a spider's web which, as far as is possible, helps to bring the countries of the world closer together, was built around the UN. Despite its weaknesses and alleged failures, this organisation has succeeded in establishing a minimal degree of international order. From the start, the EU has made multilateralism the keystone of its external relations. The multilateral framework provides, insofar as is possible, a platform for the collective management of the planet.

6.1.9

Today, a shadow of doubt hangs over the global legal architecture and recently there has been a clear trend towards unilateralism, particularly in the USA, which is a serious blow against the international legal order patiently constructed over the last five decades.

6.1.10

The Cancun failure has added fuel to the crisis of global governance. At present, the USA is trying to circumvent the WTO by favouring bilateral alliances with its neighbours. Bilateralism is one of the methods the USA uses to push ahead with the FTAA project. Moreover, the Bush Administration has recently made it clear that, although the war in Iraq had distracted the USA from the LAC region, it would be resuming efforts to pursue the Americas project, a statement that was repeated shortly after the Cancun Ministerial Conference. As was noted in point 6.1, some Latin-American countries would be prepared to conclude bilateral agreements with the USA, thus abandoning their own regional commitments and undermining the Latin-American integrationist efforts supported by the EU.

6.2.1

The USA perceives the FTAA as a way of boosting its own global leadership in comparison with major world trade blocs such as Japan and the EU. The many dimensions of the FTAA project are proof of its scale. It commits countries to going well beyond a simple free trade agreement designed to stimulate trade in goods and services by dismantling customs barriers. It also aims to encompass issues such as investment and investor protection, financial markets, intellectual property, government procurement and competition policy in the discussions.

6.2.2

In reality, an institutional framework is being established, based on law and promoting a profound market-driven economic integration. This means that the plan for integrating the Americas involves both a process of opening up markets and the establishment of new laws, standards and regulations to govern world trade. Given the political and economic power of the United States, it is highly likely that these rules will be based upon American law and practice.

6.2.3

If this scenario were to become a reality, it would only accelerate Europe's loss of influence and complicate matters for European businesses operating in LAC countries.

6.2.4

The entry into force of NAFTA has already had very negative consequences for the EU as it has caused a shift in trade, with European businesses losing half their market share in Mexico. In 1990 Europe still accounted for 14.3 % of Mexican imports, but by 1997 its market share had fallen to 8.5 %. At the same time, the EU only accounted for 3.6 % of Mexican exports, compared to 12.6 % in the early 1990s. By contrast, the USA now accounts for 90 % of Mexican exports and has become the country's main trading partner. Despite the Association Agreement which the EU rapidly negotiated with Mexico, the lost market share has not been fully recovered. Too accustomed to trading with the United States, Mexico is taking a long time to forge trade links with Europe. The great potential offered by the EU-Mexico agreement has not yet been exploited to the full by the two parties.

6.2.5

The NAFTA experience has shown the extent to which trading patterns can be shifted by such means. This is precisely the type of trade and investment shift which the FTAA could cause.

6.2.6

Even though the FTAA project is behind schedule, the trend to regionalise/continentalise trade in the Americas is already clear, as a result of the various free trade agreements negotiated on the continent. At present, 60 % of exports and 50 % of the total imports of 34 countries are carried out within the Americas, compared to 48 % and 41 % ten years ago. With the exception of MERCOSUR, whose main trading partner is the EU, the rest of the LAC region is strongly dependent on trade with the north of the continent. Almost 50 % of CAN exports, 45 % of CACM exports and 41 % of CARICOM exports go to NAFTA. The FTAA would reinforce this trend.

6.3.1

The EU must take due note of the United States' international strategy in seeking to build its own strategy. This does not mean that it should set itself up in opposition to the United States on the international scene but rather that it should pursue the European way of promoting the European model of regional governance to the rest of the world, whilst respecting existing international rules, with a view to ultimately building a multi-regional, and hence more balanced, world. The conclusion of preferential agreements with the various regional groupings in Latin America would enable them to strengthen their internal structures and be integrated as individual players on the international stage.

6.3.2

The EU cannot afford to neglect this world region since it needs partners to redefine its role in world politics. LAC is a natural ally for cultural, political and economic reasons, especially as there is a real desire for closer links with Europe. As the European Parliament report of October 2001 proposes, the EU must no longer make the conclusion of a free trade agreement with MERCOSUR dependent on the finalisation of WTO negotiations (12). This is especially so as the date set for the conclusion of the Doha Round seems doubtful because of the difficulty the parties are having in finding a consensus for moving forward with the multilateral trade negotiations, as evidenced by the failure at Cancun.

6.3.3

It is important for the EU to get to grips with the Americas project. If it wants to retain its position on the continent and play a part in developing new rules for international trade, the EU must as a matter of urgency find the political will and the financial resources to match its international ambitions and act as a single voice within international economic institutions (IMF, World Bank, etc.) in order to make its influence felt.

6.3.4

Now more than ever there is a clear need for Europe in the troubled Latin-American/Caribbean continent. The EU continues to be perceived as a social model and political benchmark. Europe must not lose sight of the fact that the great challenge currently faced by LAC countries is to find an alternative economic and social model to the ‘Washington consensus’ and to the plans to integrate with the USA.

6.3.5

It is clear that multilateral negotiations, eastward enlargement, developments on the international stage since 11 September 2001 and the crisis faced by Latin America have all contributed to a slowdown in relations between the two sides of the Atlantic. However, the EU does not have only economic interests in the region, it is a global player. It cannot therefore do without a consistent overall policy towards this region.

6.3.6

There is a strong demand for change in Latin America, witness for example the many demonstrations and expressions of popular discontent in Andean and South American countries in recent years as well as the election of Luis Inácio Lula da Silva in Brazil and Néstor Kirchner in Argentina, who have expressed their willingness to strengthen the region, even before concluding the FTAA, and to promote relations with the EU, as shown by the visits the two presidents made to various European capitals in July 2003.

6.3.7

This need for Europe has yet to be acted upon, which has provoked expressions of regret within Europe. In fact, some MEPs have been quick to point out that, although Europe has the necessary means to offer LAC an alternative to the FTAA, the political will has not been forthcoming. This was reiterated at the Sixteenth EU-Latin America Inter-parliamentary Conference in May 2003.

6.3.8

More emphasis must be placed on social and environmental aspects of relations. The EESC endorses Commissioner Patten's initiative, proposing that social cohesion (13) be one of the main themes of the discussions at the next EU-LAC summit (Mexico, 2004).

6.3.9

Given the rise in unemployment, accelerating impoverishment and social injustices that LAC societies have experienced over the last ten years, it would be useful to include a social clause – as well as a clause on the environment – in the strategic partnership to ensure that the trade agreements signed with Europe help reduce poverty and the extreme inequalities which mark the region, as well as mitigating the potential collateral social risks of trade liberalisation. The purpose of the social clause would be to enable LAC governments to use EU funds for income redistribution and thus combat the social disparities that are a scourge in this part of the world.

6.3.10

Moreover, as was pointed out above, the EU and LAC have so far found it difficult to define a real common agenda. There is a danger that the differences in agendas will continue at the next EU-LAC summit in Mexico. While Commissioner Patten wants to put the spotlight on social cohesion at this third summit, so as to help eliminate social inequalities and poverty in the LAC region, the latter believe that it is through better access to international trade that they can return to growth and thus fight poverty. As long as the Europeans and Latin Americans are unable to agree on a common agenda, or at least reduce the differences in priorities, they will experience many difficulties in trying to move forward in the ambitious strategic partnership initiative proposed at Rio. Although the EESC strongly endorses the social cohesion initiative, the EU must also pay due regard to the priorities of its partners so as to ensure the success of the Mexico summit. Mindful of the post-Cancun situation, the EU must not only devote itself to social issues, which enable it to make its mark on the international scene, but also respond to the expectations of LAC, which are to conclude preferential agreements with the EU. Europe must seize the opportunity offered by the Mexico summit to give much-needed impetus to the EU-LAC strategic partnership, some months before the completion of the FTAA negotiations.

7.1

The Cotonou Agreement, which was concluded between the EU and the African, Pacific and Caribbean States in June 2000, requires dialogue to be conducted between the institutions and NGOs in a manner whereby the State and civil society have a complementary role in action taken in the development field. The White Paper on European Governance, presented in 2001, also underlines the importance of civil society for defining policies with an international dimension.

7.2

Therefore it is within a framework of participation by civil society that LAC must conduct its relations with the EU, both in the cooperation programmes and in the negotiations on agreements under preparation.

7.3

Up till now, there has been no real, basic strategy for involving civil society in the negotiations between the EU and LAC; participation has been largely symbolic. Apart from meetings between the EESC and organised civil society in LAC countries, most notably at the summit of heads of state and government, very little has been done in this regard.

7.4

Given that active citizenship is a key aspect of consolidating democracy and an essential basis for sustainable development, and that it is therefore vital to be able to rely on civil society to provide legitimacy to the EU-LAC strategic partnership and avoid the mistakes made in the FTAA project, so heavily criticised by the societies of the Americas, the EESC makes the following proposals:

7.4.1.1

In a more complex world where there are an increasing number of risks, the European Union must have a global strategy based on the following values: peace, sustainable development and human rights, while seeking to build a fairer, more balanced world.

7.4.1.2

These values and this objective must be borne in mind in relations with Latin America and the Caribbean so that the people of this region understand that agreements with the EU can be a key factor in promoting their own development and their place on the world stage.

7.4.1.3

To give practical effect to this strategy, it is important that the EU increase its financial resources accordingly.

7.4.1.4

Thus, in the negotiations under way with MERCOSUR, the CAN, the CACM and CARICOM, the EU must, over and above trade and customs-related issues, take the above-mentioned global strategy into consideration.

7.4.1.5

The EU must also provide new impetus to the EU-LAC dialogue, not only because it represents one of the three pillars of the association agreements it has signed, or is in the process of signing, with LAC countries or regions, amongst others, but also, and above all, because it is the component which differentiates the association project which the EU is putting together with LAC from the FTAA. To achieve this, it is vital for the European ministerial presence at EU-LAC inter-ministerial fora, along the lines of the EU-Rio Group meetings, to be equal to the task in hand: bringing about a strategic bi-regional partnership.

7.4.2.1

Given the failure of the WTO negotiations at Cancun and the North American decision to carry out negotiations aimed at achieving the timetable envisaged for the FTAA, the European Union must as soon as possible draw up a new action plan and timetable which are more in line with the new circumstances.

7.4.2.2

In particular, the European Union must consider the need for a new negotiating mandate which is not dependent on the conclusion of the Doha Round.

7.4.2.3

The EESC would like to see the Association Agreement with MERCOSUR signed (or at least announced) during the May 2004 summit of heads of state and government to be held in Guadalajara, Mexico.

7.4.3.1

Transparency in the negotiations and information about successes and obstacles encountered are essential for civil society to be involved in all stages of the negotiation process.

7.4.3.2

Europe must take initiatives with all sectors of civil society, explaining the thinking behind its proposals and the concessions it is ready to make to reach an agreement with the parties involved.

7.4.4.1

The European Union has broad experience in civil dialogue, the EESC being one of the most notable examples of this.

7.4.4.2

Without any intention of exporting its own models, the EU must support the establishment of similar institutions in regions which do not already have them or where they are less effective.

7.4.4.3

Likewise, support for more or less institutionalised contacts and relations with organisations on both sides of the Atlantic seems to offer a way of bringing the two sides together which is very positive for the European strategy.

7.4.5.1

All integration processes have repercussions affecting people's everyday life, particularly those who are the most vulnerable.

7.4.5.2

With this in mind, the EU must carry out studies into the effects of integration and the opening up of markets and, consequently, provide financial support for policies to counter poverty and social exclusion and promote employment.

7.4.6.1

The European Union should not only view the agreements with LAC as a chance to gain access to new markets, but also as an opportunity for the economic and social development of the populations concerned.

7.4.6.2

The whole population must benefit from these agreements, not only those who are already benefiting. It would be a strategic error with the most damaging repercussions if the EU were to be linked to a policy which aggravated economic and social inequalities in LAC.

7.4.6.3

The requirement for a social cohesion policy backing up the whole process of agreements already negotiated, or in the process of being so, must be the component which differentiates the association project which the EU is putting together with LAC from the FTAA.

7.4.6.4

The EESC welcomes the Commission's initiative proposing that social cohesion be the topic for discussion at the Mexico summit.

7.4.7.1

In the protocol signed between the European Commission and the EESC in 2001, and in the wake of the Nice Treaty, the EESC is recognised as the leading body for dialogue between the European institutions and civil society not only in Europe, but also with regard to organised civil society in non-Member States.

7.4.7.2

The EESC has made use of every opportunity to carry out this role, but acknowledges that it can – and must – go further in the dialogue with similar bodies in LAC and seek other ways of cooperating more closely and effectively.

7.4.7.3

So, at a key moment in relations between the EU and LAC, the EESC must:

30.4.2004   

EN

Official Journal of the European Union

C 110/55

i.

The present exploratory opinion, requested by Commissioner Patten, sets out to express the views of European, Latin American and Caribbean organised civil society on social cohesion in Latin America and the Caribbean (LAC). It will focus in particular on how civil society organisations can contribute to this objective by means, for example, of social consultation, developing social protection systems or promoting corporate social responsibility. To this end, the EESC opinion should be fleshed out by contributions from Latin American and Caribbean organisations, and by the outcome of the proceedings at the third meeting of EU-Latin America civil society to be held in Mexico City in April 2004.

ii.

The opinion does not seek to define the concept of social cohesion, but rather to point out its various dimensions – political, economic, social and territorial – so that account is taken not only of the usual macroeconomic factors, but also of others, such as education, institutions or access to essential public assets: these are fundamental to any analysis of the degree of social cohesion in LAC.

iii.

As the opinion explains, the lack of social cohesion in LAC countries is most clearly illustrated by poverty and inequality. Although poverty figures have improved in relative terms over the last decade (affecting 48 % of the population in 1990, falling to 43 % in 2002), inequality has continued to worsen to the point where it has become chronic. Although the picture varies widely, Latin America as a whole is now the most unequal part of the world. Physical poverty is aggravated by intangible forms of poverty (access to education, spread of opportunities) and legal poverty (effective inequality before the law, weak civil, political and social citizenship and general insecurity in terms of life events). This generates violence, social breakdown and alienation, and undermines the credibility of institutions and the democratic system. A recent UNDP report (Report on democracy in Latin America 2004) highlighted the danger that the perception among Latin Americans that their democracies are irrelevant could spread.

iv.

The lack of solid pillars which underpin any advanced society (infrastructure, education, health and tax systems, justice, social protection, framework for labour relations, etc.) is a common feature of all Latin American and Caribbean countries. The UNDP report even goes so far as to describe the ‘absent State’ as a typical characteristic of many Latin American countries. The education system's low quality, unequal access and dissociation from the economy, the inadequacy and unfairness of the region's prevailing tax systems, and the lack of universal social protection schemes in most of the region's countries are three of the clearest expressions of this state of affairs. The result is drastic inequality and the exclusion of most of the population from cover under existing systems.

v.

The opinion argues that one of the key factors to boosting social cohesion lies in achieving greater efficiency and democratisation within the economy, which is held back by the extent of the informal economy, the small size of markets, lack of economic diversification, underdeveloped infrastructure – especially in transport and communications – delay in agrarian reform, the lack of financial resources and the region's ensuing external dependence in this area, the penury of different forms of social economy, poor employment quality and protection, and the virtual absence of labour relations systems based on compliance with basic labour rights, a balanced approach and trust.

vi.

Similarly, the opinion points to an aspect of key importance to the EESC: securing higher levels of democracy, human development and governance in LAC depends on strengthening civil society organisations and involving them more closely in decision-making. This is a prerequisite for successfully boosting political democracy, achieving fairer distribution of material and intangible wealth and facilitating the integration into political, economic and social life of sectors of society and minorities, such as indigenous populations, who have been excluded for centuries.

vii.

Lastly, the opinion makes a series of proposals on the contribution which EU-LAC relations can make to social cohesion in this part of the Americas. These are based on two starting-points. Firstly, the strategic importance for the EU of its relations with Latin America and the Caribbean, both in order to boost its role in world affairs and to foster a new international order and fair, solidarity-based governance of globalisation, together with the importance for LAC of its relations with the EU, with a view to achieving balanced integration in the area and strengthening its negotiating position in the international arena. Secondly, the conviction that, as well as helping to increase social cohesion in LAC through development aid and cooperation, the EU must place this objective at the heart of all its relations – in all spheres – with Latin America and the Caribbean.

viii.

Some of the opinion's suggestions are geared to strengthening organised civil society (support for projects to boost the social dimension in regional integration processes; support for joint EU-LAC forums bringing together socio-occupational organisations; introducing a budget line for strengthening socio-economic organisations; setting up a programme to protect those working for human rights in LAC, etc.); others aim to have an impact on developing the productive system and establishing democratic frameworks for labour relations and social dialogue (transfer of European know-how on social consultation; encouragement for the development of infrastructure to attract foreign direct investment; setting up an SME fund for Latin America; joint development plans with the countries of origin of migrants from LAC to the EU; drawing up a charter of the principles of corporate social responsibility). Some initiatives aim to reduce the external debt burden and finance development (formulas for renegotiating, relieving or cancelling external debt by means of programmes for poverty reduction, environmental or educational cooperation, recommendations to attempt to prevent rating agency dependence). A number of proposals seek to reinforce social protection systems (transfer of European know-how, support for international agreements on migration, support for management and specialist training). Lastly, a series of suggestions are also put forward concerning development aid and development cooperation: stepping up coordination between European donors, adjusting aid more closely to the stated objectives, trying to ensure that the recipient countries take the basic decisions on where to intervene, and helping the most needy countries to facilitate and strengthen their ability to act autonomously in multilateral negotiations. The overall priority should be with provision of training, and strengthening of institutions.

1.1

On 28 March 2003, Commissioner Patten unveiled to the members of the Rio Group meeting in Vouliagmeni, Greece an initiative aimed at boosting social cohesion in the countries of Latin America. The starting point for the initiative – which is set to be a central theme at the summit of EU-Latin America and Caribbean Heads of State and Government to be held in Guadalajara (Mexico) on 28 and 29 May 2004 - is the observation that the benefits of democratisation and economic development achieved during the 1990s have failed to reach large sectors of the population, who continue to suffer from inequality and exclusion. This constitutes a barrier to further economic development and is a source of instability across the region.

1.2

The EU is ready to back a new consensus between the governments of Latin America and the Caribbean, which must take official form at the Mexico Summit with a firm commitment to achieving a number of targets relating to social, tax, economic development and social expenditure policy amongst others. The EU plans to contribute to this objective, which is an aspect of particular importance for the strategic association between the two regions, with a EUR 30 million programme aimed at transferring experience and know-how in defining and implementing social policies.

1.3

To kick-start this initiative, on 5 and 6 June 2003 the Commission and the Inter-American Development Bank (IADB) organised a seminar on Social Cohesion in Latin America and the Caribbean, the objective of which was to open a broad debate on the scope of the problem, its negative impact on development and stability, different policy options and steps that must be taken by Latin American governments to tackle problems arising from the lack of social cohesion, such as inequality and social exclusion.

1.4

On 1 July 2003, Commissioner Patten asked the EESC to draw up an exploratory opinion on social cohesion in Latin America in preparation for the third meeting of EU-Latin America civil society to be organised by the EESC, in conjunction with its Latin American and Caribbean counterparts, in Mexico on 13, 14 and 15 April 2004.

1.5

In Commissioner Patten's view, the opinion should reflect the views of Latin American, Caribbean and European civil society organisations on social cohesion in LAC, build on documents drawn up in connection with the above-mentioned seminar in June 2003, take account of the role currently played by the social partners in Latin America and the Caribbean, and analyse – together with Latin American and Caribbean civil society organisations – how the social partners can contribute towards greater social cohesion in their countries. Possible answers could be social dialogue, joint management of social protection systems and the implementation by European companies that invest in Latin America of a policy of social responsibility (1) that simultaneously improves business competitiveness and social cohesion for all those concerned.

2.1

The concept of economic and social cohesion is open to many interpretations. For the purposes of this opinion, we start with the concept that has been devised by the European Commission in its successive reports on economic and social cohesion in the EU, incorporating in the analysis a number of aspects specific to Latin America, such as hunger, indigenous peoples and informal employment, together with greater social determinism in access to equal opportunities.

2.1.1

According to Enrique Iglesias, IADB president, in order to achieve greater social cohesion, States need to be provided with the mechanisms and institutions to reduce inequalities and divisions. From this perspective, the concept of social cohesion is not limited to a set of socio-economic indicators, but encompasses various dimensions.

2.2.1

Social cohesion firstly has a fundamental political dimension which ranges from the quality of democratic institutions to grassroots involvement in public affairs, encompassing protection of social ties, establishment of more equitable societies and of social protection and solidarity systems, conservation of cultural heritage and natural resources, and active participation of economic and social stakeholders in economic and social life.

2.2.2

Improving social cohesion requires intervention by the State and public institutions, in terms of effective legislation and action: developing infrastructures, high-quality public services, independent courts, labour relations standards, etc. In short, public bodies have an essential role to play in promoting rights and civic, political and social citizenship. Social cohesion is therefore first and foremost a political issue.

2.3.1

The economic dimension of social cohesion relates to wealth and its distribution, the growth of the production base (e.g. access to basic resources, increase in factors affecting productivity, favourable environment for the growth of investment and SMEs, etc.), research, development and innovation, the rate of employment and the quality of jobs, pay levels and existing pay differences. Among the obstacles to achieving these objectives are, in the case of the Latin American and Caribbean countries, the dual nature of the labour market, divided between formal and informal employment, the lack of productive investment and low skill levels among the region's human resources. High levels of economic inequality, such as those characterising Latin American societies, hinder economic development, resulting in economic backwardness and social de-structuring.

2.3.2

At the same time, there will be no major improvement in social cohesion in the LAC countries without sustained economic growth and social development. To this end, a greater degree of macroeconomic stability is needed – without this standing in the way of considerable improvements in social equity – as well as structural reforms to energise productive resources in the region, in particular providing company start-up incentives, training employees, distributing wealth more fairly and creating democratic frameworks for labour relations.

2.4.1

Social cohesion is intrinsically linked to territorial cohesion: the ability to generate synergies between all players in a given area; sufficient provision of all types of infrastructure, including new information and communication technologies; and access for all to essential public services (ranging from health and education to water supplies, transport, electricity and housing). Inequalities are reflected on the ground, between the centre and outskirts, between urban and rural areas, between coastal regions and the interior, and concerning sectors of society such as indigenous peoples, new migration patterns, etc.

2.5.1