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Committee on Industry, External Trade, Research and Energy

24 January 2002

OPINION

of the Committee on Industry, External Trade, Research and Energy

for the Committee on Economic and Monetary Affairs

on the Report from the Commission: Overview of EU action in response to the events of the 11 September and assessment of their likely economic impact (2001/2240(INI))

Draftsman: Hans-Peter Martin

AD\459959EN.doc PE 309.075 EN EN PE 309.075 2/6 AD\459959EN.doc EN PROCEDURE

The Committee on Industry, External Trade, Research and Energy appointed Hans-Peter Martin draftsman at its meeting of 23 January 2002.

It considered the draft opinion at its meetings of 23 January 2002 and 24 January 2002.

At the last meeting it adopted the following conclusions by 36 votes to 5, with 5 abstentions.

The following were present for the vote: Carlos Westendorp y Cabeza, chairman; Peter Michael Mombaur, Yves Piétrasanta and Jaime Valdivielso de Cué, vice-chairmen; Hans-Peter Martin, rapporteur; Konstantinos Alyssandrakis, Sir Robert Atkins, Freddy Blak(for Roseline Vachetta), David Robert Bowe(for Massimo Carraro), Gérard Caudron, Giles Bryan Chichester, Nicholas Clegg, Concepció Ferrer, Colette Flesch, Christos Folias(for Guido Bodrato), , (for Umberto Scapagnini), Michel Hansenne, Hans Karlsson, Bashir Khanbhai, , Rolf Linkohr, Caroline Lucas, Minerva Melpomeni Malliori(for Harlem Désir), Eryl Margaret McNally, , , Giuseppe Nisticò(for Marjo Matikainen-Kallström), Reino Paasilinna, Elly Plooij-van Gorsel, Samuli Pohjamo(for Willy C.E.H. De Clercq), John Purvis, Godelieve Quisthoudt-Rowohl, (for W.G. van Velzen), (for Elena Valenciano Martínez- Orozco), , Christian Foldberg Rovsing, Paul Rübig, Jacques Santer(for Paolo Pastorelli), Konrad K. Schwaiger, Esko Olavi Seppänen, Gary Titley, Claude Turmes, Alejo Vidal-Quadras Roca, Dominique Vlasto, Myrsini Zorba.

AD\459959EN.doc 3/6 PE 309.075 EN SHORT JUSTIFICATION

Introduction

The events of the 11th of September 2001 have changed the world. Whereas it is important not to overestimate the immediate economic impact of the terrorist attacks, the events have also made clear that a multitude of issues now haveto be given top priority. It is time to act.

A Global Marshall Plan should be set up and implemented to help close the social gap between haves and have-nots. The European Parliament could play a significant role in this undertaking by providing the necessary studies and political support.

Developing a new rules-based international trading system is also of utmost importance, including the creation or transformation of appropriate institutions and a prompt reform of international institutions, such as the IMF and the World Bank, for addressing justified concerns of the civil society and for providing aid and for using trade policy to tackle poverty, hunger and disease.

The issue of human rights in particular has moved once again to the top of the political agenda. This applies to most fields of political debate, including trade.

In order to achieve endurable peace and sustainable prosperity, a coherent human rights policy without double standards is essential. The should assume the leading role in achieving this goal. In the age of globalization, the task of promoting and enforcing the universality of human rights has to be a matter of utmost relevance to the economic sector as well as to transnational corporations. Political decision-makers can facilitate this by facing up to decisions.

The EU should therefore take a clearly visible and pro-active approach, using political dialogue, trade and external assistance to achieve these goals and turn globalization into a truly inclusive process.

The Commission already acknowledges the fact that global actors such as transnational corporations should also be encouraged by the EU to play a full part in increasing respect for human rights world-wide. The question remains, however, how these transnational enterprises could be convinced to use their often considerable influence within a developing country to support the EU's attempt to promote human rights, and which activities they should undertake. More concrete measures regarding their contributions, such as enormously increased transparency in the actions of multinational companies, need to be discussed and implemented.

In this context it is important to link human and social rights with trade and investment activities in developing countries, a trend that has been led by NGOs, trade unions and the European Parliament. At the power centre of all the necessary changes are the US and the EU. In 2000, the EU and US accounted for not less than 33% of the total world exports and 41,5% of world imports of goods .. Equally, the two jointly accounted for more than 50% of world exports and 45% of world imports of commercial services. The EU was the largest foreign investor, with over 50% of world foreign direct investment (FDI) outflows in 2000. Nearly half of the EU-15 FDI stocks held at third countries in 1999 PE 309.075 4/6 AD\459959EN.doc EN was invested in the US. However the EU/US joint stock at the end of 1999 was 2312.6 billion euro, approximately 80% of the world total. If one considers the capital market of the US and EU then the entire world is based on two centres: US and EU, accounting for about 85% of world capital flows. More concretely 80% of currency market transactions related to trade financing and 84% of that volume resides with the US and EU. The EU countries amounted to more than $27 trillion at end of 1995, which was roughly the same order of magnitude as the world GDP (in fact 94 percent of world GDP). The EU domestic financial market not only is the largest in the world but it also is very active in all parts of the world.

. The world exports of goods in 2000 were 5354.6 billion euro. However this amount of exports is equivalent - according to the Survey of foreign exchange markets by the Bank for International Settlements - to less than 3 days transactions (i.e. in 1999 about 2000 billion US dollars worth of foreign exchange was recorded daily). Furthermore in 1999 the foreign exchange markets in the EU accounted for about 51% whilst in the US, about 18%, implying that approximately 70% of foreign exchange is traded in these two markets.

This is where ‘financial and monetary stability’ resides. A common regulatory approach by the US and EU to capital markets will ensure a global solution to speculation, volatility of exchange rates, financial and economic crises. It will also provide a solid base for tackling tax avoidance, fraud and regulating offshore centres while making tax havens comply with international standards.

Especially after the events of the llth of September an enormous responsibility lies on us.

CONCLUSIONS

The Committee on Industry, External Trade, Research and Energy calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following points in its motion for a resolution:

1. Believes that developing a new rules-based international trading system is of utmost importance, including the creation (or transformation) of the appropriate institutions, and a prompt reform of international institutions such as the IMF and the World Bank for addressing justified concerns of civil society and for providing aid and for using trade policy to tackle poverty, hunger and disease; 2. Stresses the need for a joint-approach by the US and EU seeking to tackle global challenges that overcome national frontiers, such as money laundering, trafficking in human beings, food safety, security of energy supply and climate change; 3. Recalls its support for the setting of fair social standards in economic activity and its commitment to take part in efforts to combat the exploitation of labour throughout the world; stresses the vital role which the WTO, the requested WTO parliamentary assembly and ILO must play in this area and the need for them to effectively implement a joint work programme; 4. Calls on the Commission in agreement with the social partners to intensify its efforts to adopt a concise White Paper on Corporate Social Responsibility during the present Spanish EU-presidency;

AD\459959EN.doc 5/6 PE 309.075 EN 5. Calls on all enterprises to take their Corporate Social Responsibility seriously and re- evaluate their global business practises while paying particular attention to the concerns of SMEs and special attention devoted to human rights objectives; and at the same time calls upon consumers to be socially aware when purchasing products;

6.Requests its competent bodies to commission a study on how a global Marshall plan could be set up and be implemented to help close the social gap between “the haves and the have-nots”, especially identifying the forces at work in the digital economy.

7.Asks the European Commission to evaluate the impact of the events of 11 September 2001 on various sectors, such as tourism, financial services, insurance and air industry, and to also assess the impact of these events on trade within the common transatlantic market of EU and US;

8. Requests the European Commission to study how the events of the 11 September 2001 have led and would lead to changes in critical areas, such as communications, network infrastructure in general.

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