BUSINESS ADVOCACY IN TRADE POLICY : A MUST FOR SUCCESSFUL EU FTAs

Business advocacy in trade policy is a special form of persuasive activity undertaken by business organisations (Chambers of Commerce, Industry Associations, or Individual Companies) which aim to influence trade-policy making and international trade negotiations. It is the planned and systematic effort to ensure that changes in trade policy are supportive of business development with the national/European and international economy.

A large variety of bodies are involved in trade policy making. It is an absolute requirement in all business advocacy activities to identify the most important players in a specific activity and clarify their special interests.

The following activities are common in all trade related business advocacy :

  • Analysing trade policy issues
  • Monitoring of trade policy developments for a certain interest group
  • Building a case in favour of the interest group
  • Maintaining contacts and providing intellectual inputs into trade policy decisions
  • Presenting the case to decision- makers for their support
  • Improving access to decision-makers through informal initiatives and speaking out for or against policy proposals that are likely to affect industry and corporate performance.
  • Ensuring leadership and giving administrative support to the trade policy debate
  • Participating actively and competently in formal consultations on trade policy matters
  • Communicating the case to the public
  • Assisting the authorities in research, communication, coalition-building and formulation of the negotiating proposals
  • Promoting of the proposals in the negotiating environment
  • Controlling the advocacy process
  • Evaluating the benefits obtained
  • Communicating the results to the members of the interest group

In developing appropriate business advocacy strategy, decisions should be taken in the following matters:

  • Which is the basic business advocacy objective to be followed?
  • What coalitions can be built and how (Who might be the best domestic or foreign coalition partners etc., Which are the major opponents of the business advocacy activity ?
  • Substantive aspects of advocacy (What should be the main message? How should it be delivered? Which are the main government and other bodies which should be convinced and how to access them? Neutralization of counter-advocacy efforts etc.)

In the case of the EU Free Trade Agreements (FTAs) some aspects are particularly relevant for the EU and present stumbling blocks in most negotiations.

Market access: Gaining market access for its industry and service sectors is the main driving force for the EU in negotiating ambitious FTAs. On the other hand, the EU is highly defensive on non-agricultural access.

Protection of intellectual property rights and geographical indications: The EU has a strong interest in the protection and enforcement of intellectual property rights to protect its creative and innovative industries and to ensure that they do not fall victim of counterfeiting or patent infringement. The protection of geographical indications is specific to the EU and creates difficulties with trading partners that also have a strong agricultural sector.

Standards and technical barriers to trade: Non-tariff barriers are one of the most pressing issues in trade relations.

Sanitary and Phytosanitary standards: There is a strong political pressure to maintain high standards in this area. This is often perceived as protectionism by the EU’s trading partners.

Trade in Agricultural Goods: Agriculture is probably the most sensitive sector for the EU, as it depends to a large extent on subsidies. The EU therefore insists on keeping a certain minimum level of subsidies.

The role of Industry   

For industry, the strong push towards FTA negotiations involves a wide array of concrete business opportunities as new markets will open up for European products and services. The European Commission very much depends on industry to understand the concrete impacts of trade liberalization on specific sectors and the European economy as a whole. Industry should therefore engage with policy makers to help them understand what is at stake.

The increasing involvement of civil society has become a critical factor. Very often its opposition to FTAs is caused by a perceived lack of transparency. An open dialogue between industry and civil society can help bring greater clarity into the debate and take away the fear that negotiations are essentially against the interests of society.

Recommendations

  • For business advocacy in trade policy to work, submissions must be intellectually coherent, demonstrate a public interest dimension, and be in tune with prevailing government trade policy.
  • Submissions should specify the ‘added value’ of a strengthened public interest in the proposed trade policy. Indeed, decision-makers are unlikely to concede advantage to vested interests and leave themselves open to easily mounted criticism in the mass media or in political debate.
  • Representations to government bodies should be clearly focused and positioned
  • Focus should be on a limited number of well-defined trade policy issues
  • Arguments should be well structured and supported by convincing evidence
  • Synergies should be exploited among the various institutions that conduct business advocacy activities such as chambers of commerce, NGOs, trade unions, academic institutions, research facilities, political parties.
  • A formalized process of strategy formulation should be maintained along with the participation of external experts to ensure sound professional judgement and objectivity.
  • The advocacy strategy should be changed in light of new experiences and negotiating opportunities
  • The strategies should guide the advocacy effort. Most issues affect the public at large through their effect on consumption, employment and social welfare. The strategy should be made public and seek the widest possible support.
  • Issues management should be promoted through industry associations and business groups.

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