EN Official Journal of the European Union CE 88/108

(2004/C 88 E/0113)

WRITTEN QUESTION E-2664/03

by Terence Wynn (PSE) to the Commission

(10 September 2003)

Subject: Manufactured products from third countries

The answer to the question E-1795/03 (1) misses the point. Let me give an example. If an industrial casting is manufactured in China for sale in the EU, the Chinese manufacturers do not have to comply with the same health, safety and environmental laws that EU manufacturers have to. Employees can work in conditions that would not be acceptable in the EU and emissions in the atmosphere would also not be acceptable. Yet these products are marketed in the EU and EU products cannot compete because of EU legislation demands.

Let me now repeat E-1795/03:

Why does the Commission allow manufactured products to enter the EU from third countries that do not meet minimum health, safety and environmental standards that EU companies have to comply with? Would the Commission agree that by allowing such products into the EU, the direct result is the loss of European manufacturing jobs?

Answer given by Mr Lamy on behalf of the Commission

(7 November 2003)

The original reply to Written Question E-1795/03 by the Honourable Member alluded to the efforts that were being made to promote Europe's regulatory approach in third countries.

It is important to differentiate between mandatory product requirements based on legitimate policy objectives, like the protection of the environment or health and safety, and applied by the Community on domestic and alike foreign products and concerns related to the methods in which imported goods are produced.

The Community can set legitimate product requirements, provided that complies with its international obligations. In other words, the Community is not at liberty to impose safety and environmental laws on countries outside its jurisdiction, just as those countries are not at liberty to impose their own requirements in the territory of the Community. This is not only a fundamental principle of sovereignty and fully in line with the 1992 Rio Declaration on Environment and Development, notably principles 2, 11 and 12, but also one of the basic principles of the World Trade Organisation (WTO) rules.

The Community is, however, seeking to promote the respect of higher standards in developing countries; for instance:

— developing countries that abide by higher social or environmental standards may be granted preferential access to the Community market through the Generalised System of Preference;

— developed countries dialogue with companies in order to encourage them to behave in a socially and environmentally more responsible manner in developing countries (for instance, the Organisation for Economic Cooperation and Development (OECD) has set up Corporate Social Responsibility Guidelines);

— the Commission's development assistance policy is supporting developing countries wishing to set up and implement new and stricter standards;

— the Union is also exploring with its WTO partners ways to improve the linkages between trade and environment.

It is noteworthy in this context that research shows that environmental standards tend to rise with the level of development. Therefore the best thing that the Union can do to encourage the take up of higher standards in its partners is to encourage economic development and growth. Blocking imports from developing countries would have quite the opposite effect, locking them into poverty and further delaying their move up the regulatory ladder.

The Commission is aware of the argument that allowing such imports might cause the loss of European manufacturing jobs. This is al old argument which has been largely disproved by events.

The Commission considers that the following elements should be taken into account when assessing this argument:

— It is a hypothetical proposition, depending on hypothesis that the Community might renege on its WTO obligations and turn its back on the benefits of multilateral trade agreements. The hypothetical ‘loss’ has to be netted off against the rather less hypothetical gain of manufacturing jobs achieved over decades of trade liberalisation;

— Trade liberalisation allows countries to specialise in those sectors in which they are most competitive enabling all players to gain from increased productivity;

— In the course of the natural upgrading of the Union economy it has moved away from the sort of labour intensive manufactures in which developing countries specialise and now has an economic structure based on services. The extent to which Union job holders compete with low cost imports is therefore very limited;

— Environmental and social awareness among European consumers implies that Community manufacturers can draw advantage from the global market for products conforming to high standards. For example serving highly discriminating consumers has helped to make Union industry highly competitive in environmentally friendly goods and technologies that protect the environment.

(1) OJ C 78 E, 27.3.2004, p. 725.