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new f2Promoting global fairness through trade, taxation and transparency, says President Barroso ahead of G8 Summit

Ahead of the G8 summit, President Barroso sets out his views on the main items on the G8 agenda in the summit magazine published by the G8 Research Group of the University of Toronto.

Read the article below or under the following link (pages 30-33):

Strengthening the European Union’s economic partnership with the world

This G8 summit in Northern Ireland is particularly emotional. The summit places on the global stage the local and national efforts, supported not least by the European Union, that over two decades have returned peace and reconciliation to this most beautiful and hospitable part of Europe. I would like to commend the United Kingdom presidency for this choice.

It also has a personal significance for me: it was under the last UK presidency of the G8 in 2005 that I attended at Gleneagles my first G8 summit as president of the European Commission.

Of course, no UK presidency would forego ‘teatime’ and this summit has three ‘Ts’ as priorities: trade and the economy, taxation and transparency. Let me briefly set out our views on these main issues.

First, on trade: free and unimpeded international trade among open economies is a vital engine for growth, jobs and development.

The European Union has always been a staunch supporter and promoter of free trade and of the multilateral system. While working tirelessly to promote progress in key areas of the Doha Development Round, we are also deepening our trade and economic relationships with many countries and regions across the world. The most prominent examples right now are the Transatlantic Trade and Investment Partnership with the United States, on which we want to launch negotiations before the summer, and the free trade agreement that we have started negotiating recently with Japan.

The bilateral trade agreements that we have initiated and concluded are not in contradiction with our multilateral ambitions and certainly do not replace our commitment to the World Trade Organization (WTO) and the Doha Development Agenda. Indeed, they are a stepping stone towards free and multilateral global trade.

We will continue to try to move forward the multilateral agenda where possible. For example, we are fully engaged with our partners to conclude a WTO trade facilitation agreement, which would have a huge positive impact for developing and least developed countries.

The G8 summit should make the case for such an agreement and then, together with the G20, provide the political impulse needed to close the deal at the WTO ministerial meeting in Bali in December. This G8 should also back and outline actions to further trade in Africa, for example by lowering trade costs, stimulating infrastructure financing and coordinating support better.

The presence in the next G8 of the co-chairs of the United Nations High Level Panel on global development beyond 2015, also gives us an opportunity to reiterate a strong message of our collective commitment to achieve the Millennium Development Goals and to start preparing a post-2015 development framework that has the fight against poverty and sustainable development as its key objectives.

We will, of course, not ignore the broader picture of the world economy at the Lough Erne Summit. If we compare the situation with a year ago, confidence is gradually returning. In Europe, we have averted the existential threat to the euro, but we still have huge challenges to tackle, not least to promote growth and create jobs. We therefore will have to stay the course of growth-friendly fiscal consolidation, structural reforms and targeted investment, while ensuring that our economic and monetary union is built on a rock-solid architecture and continuing to stabilise the financial sector.

Much has already been achieved. We have completely overhauled the way in which we are coordinating our economic policies in order to achieve sustainable growth on the back of sound public finances and increased competitiveness. And we are making good progress on establishing a banking union that will reduce the risk of future banking crises with new supranational supervision and resolution mechanisms, as well as strengthened regulation and capital requirements in line with the G20 commitments.

However, the situation remains fragile and there is no room for complacency. This is true for Europe and for other parts of the world. Sustained efforts are needed in order to ensure the return of financial stability, growth and jobs worldwide. It is therefore very important that G8 leaders take the opportunity to have a very frank exchange of views and update each other on our joint efforts to speed up the return of growth and jobs.

On the second T, taxation, I strongly welcome the new willingness to join forces and cooperate more effectively to fight tax evasion and avoidance, in Europe and worldwide.

Tackling these issues is, above all, a matter of fairness.

In difficult economic times it is particularly urgent to ease the burden on honest tax payers and businesses and hold those accountable who do not respect the rules of the game. Tax evasion and avoidance costs the European Union €1 trillion every year, which is the equivalent to the EU’s next seven-year budget. The global bill is much higher. That is money that should be available to spend on education, skills, healthcare and infrastructure investment in both developed and developing countries.

Within the European Union we are taking common action on exchange of information, on tax havens and on aggressive tax planning. There is a new willingness among our members to finally agree a strengthened savings tax and the mandates to negotiate tax agreements with partner countries. This is complemented by new rules for stronger administrative cooperation and greater transparency, which should come into effect as soon as possible. So in Europe, the arsenal for fighting tax evasion is being used and stepped up.

But, as we know, in a globalised world, tax avoiders are taking advantage of gaps and loopholes in the different tax regimes around the globe. So we are convinced that there is a need to improve tax governance everywhere. Let us therefore foster a unity of purpose at the global level. The G8 summit is a great opportunity to inject further momentum. Our work should focus on the compatibility of standards for automatic exchange of information, taking into account the particular features and legal requirements of all countries involved. The European Union would strongly support a joint effort towards a new multilateral standard in the context of the Organisation for Economic Co-operation and Development. We believe that our European Union savings tax directive can be an important point of reference here.

Fairness is also the driver behind the work to combat corruption, and this brings me to the third T of the UK presidency, transparency.

The European Union has been a strong advocate of greater transparency in payments made to host governments by extractive industries. With the brand new update of the European Union transparency and accounting directives, we will hold governments and companies involved in the sectors of oil, gas, mining and forestry more to account and protect citizens around the globe from unfair distribution of their national wealth. We hope to see the timely implementation of our new rules in European Union members and encourage more and more countries to join in the global effort to subscribe to the Extractive Industries Transparency Initiative. We are also ready to team up with individual resource-rich countries to help them reap the full benefits of this new transparency. Transparency should also be further enhanced on land tenure. We clearly see a role for the G8 to push further the implementation of the ground-breaking Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests endorsed by the Committee on World Food Security in May 2012.

For us, agriculture and food security remain a priority in development cooperation as we made clear in our Agenda for Change. The European Union provides more than half of global aid, of which around €1 billion per year alone is dedicated to boosting agriculture and food security. The EU is and remains the world’s most generous donor of development assistance, also with its multi-annual aid programmes as of next year.

On other issues, the summit is a time for more than T: other topics have their firm place on the G8 agenda, such as international and security issues or climate change. We will discuss the crisis in Syria, the tensions on the Korean Peninsula or the situation in Mali, and we will take stock of the successful work in supporting the transition in the Southern Mediterranean through the G8 Deauville Partnership. Here too, I expect the G8 to provide a clear political signal and reaffirm its leadership.

The European Union, as a full member of the G8, remains committed to play an active role in the G8. I am looking forward to open and candid discussions with fellow leaders in Lough Erne.