Trade Sustainability Impact
Assessment (TSIA) in support of
negotiations of DCFTA between the EU
and the Republic of Armenia
European Commission, DG Trade
Brussels, 12 December 2012
Ecorys – CASE consortium
Presentation on draft Inception Report
Trade Sustainability Impact Assessment (TSIA) in support of negotiations
of DCFTA between the EU and the Republic of Armenia
By:
Nora Plaisier, Wojciech Paczynski,
Jurgen Vermeulen, Eoin O’Melia
Agenda
1. Approach and conceptual framework
2. Methodological developments
3. Consultation plan and stakeholders
4. Preliminary Screening on Key Sustainability Issues
5. Planning
6. Questions and contact info
1. Approach and conceptual framework
General approach to the study based on three phases:
2. Sectoral Trade SIA analysis
• Scenario analysis and CGE modelling
• Additional quantitative and qualitative analyses
• Screening and scoping analysis
0. Inception
1. Overall analysis of the sustainability impacts
• In-depth analysis of selected sectors and horizontal issues
• Causal Chain Analysis (CCA)
• Literature review, Partial Equilibrium modelling, interviews
3. Policy recommendations and flanking measures
• Causal Chain Analysis
• Consultation and dissemination (throughout all phases)
• Final report
1. Approach and conceptual framework
A general approach based on three phases
Phase Methodology - Pillar
0 Inception
Scre
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1 Overall analysis
Sc
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2 Sectoral Trade SIA analysis
Secto
ral
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3 Policy recommendations and
flanking measures
1. Approach and conceptual framework
1. Screening and scoping
2. Scenario analysis & CGE
3. Add’l quantitative & qualitative analysis
› Social (quantitative & qualitative)
› Human rights (qualitative)
› Environmental (quantitative &
qualitative)
4. In-depth analysis
› Sectoral analysis
› Horizontal issues
5. Causal Chain Analysis
6. Consultation and dissemination
2. Methodology
CGE modelling specification
› Adjusted actual projection to 2010, based on 2007 (GTAP 8.0) data
1. EU-27 4. Moldova 7. Ukraine 10. ROW
2. Armenia 5. Russia 8. Iran
3. Georgia 6. Turkey 9. China
1. Country selection
2. Base year
2. Methodology
3. Sector specifications
Nr. Sector content (TSIA Adapted)
1 Grains and crops
2 Veg, fruit, nuts, oil seeds
3 Other crops
4 Animal products
5 Forestry products
6 Fish products
7 Energy
8 Other minerals
9 Livestock and Meat Products
10 Vegetable oils and fats
11 Dairy products
12 Sugar
13 Other processed food
14 Beverages and tobacco products
15 Textiles and clothing
16 Wood, paper, publishing
17 Petrochemicals
18 Chemicals, rubber, plastics
19 Ceramics, cement, etc.
20 Primary metals
21 Fabricated metals
22 Motor vehicles
23 Other transport
Nr. Sector content (TSIA Adapted)
24 Electronics, computers
25 Other machinery and equipment
26 Other manufacturing
27 Utilities
28 Construction
29 Trade
30 Other transport
31 Water transport
32 Air transport
33 Communication
34 Finance and insurance
35 Business and ICT
36 Personal and recreational services
37 Public and other services
2. Methodology
CGE modelling specification
Scenarios
• One liberalisation scenario, based on:
› Anticipated changes in tariff lines;
› Services-related regulatory approximation;
› Other types of regulatory approximation (e.g. SPS, TBT).
2. Methodology
Outputs of overall analysis
Theme Indicator
1. Aggregate results
a) Wages (skilled and unskilled)
b) GDP
c) Total exports
d) Total imports
e) National income
f) Terms of trade
2. Sector results
a) Bilateral exports
b) Output
c) Value added
d) Employment (skilled and unskilled)
3. Environment variables
a) Emissions
b) Agricultural
c) Land use
4. Social variables
a) Unskilled wage changes
b) Labour displacement
c) Measure of inequality
2. Methodology
Social and environmental effects – additional analysis
• Objective:
to obtain more detailed, disaggregated information on potential effects in
these 2 spheres
• Approach:
• A combination of quantitative and qualitative analysis
• Quantitative analysis:
• Building on CGE results;
• Combining them with new data sources and techniques.
2. Methodology
Quantifying social impact
• DCFTA likely to affect relative prices (e.g. of food) – modelled in CGE. Effects
split into:
› Consumption effect: prices of households’ consumption basket will be
affected: especially important for the poor (~50% of their consumption
basket)
› Income / wage effect: income determined by changing sectoral wages
and – e.g. for food producers – also sectoral prices: especially
relevant in rural areas
• Simulation taking 2010 household budget survey for Armenia as a baseline
• Outcome of analysis: distribution of welfare effects of the DCFTA
› poverty indicators (incidence, gap/depth, severity)
› inequality indicators (Gini, decile ratio)
› Identification of vulnerable groups (regional, gender differences,
household types, etc.)
2. Methodology
Quantification of environmental impacts
• Inputs:
› CGE results: sectoral outputs & CO2 emissions
› air pollution intensity per sector (for Armenia)
› data / methodology for estimating externalities from environmental burden
• Outcomes
› Pollution change (% & tonnes): SO2, NOx and particulate matter in Armenia
› decomposition: scale & composition effects (policy-relevant)
› computed values (in EUR) of external costs (welfare changes due to effects
on human health, ecosystems, materials)
2. Methodology
Qualitative analysis:
› Social aspects
› Decent work agenda, interaction with ILO core labour standards, equality
› Environmental aspects
› Land, water and other pollution, biodiversity, etc.
› Human rights issues
› Broad range of issues, following Walker (2009), looking e.g. at
complementarity between trade law and human rights law, role of DCFTA in
growth and resources for HR, competitive pressure and HR risks
• Extensive literature review
• Critical interpretation of CGE and other simulation results at the sectoral level
• Selective analysis of reporting schemes under relevant international conventions
• Consultations with stakeholders
3. Consultations and stakeholders
Consultation activities
Activities Detail
1 Electronic consultation and documentation Continuously
http://tsia.ecorys.com/armenia/
2 Public meetings EU 12 December 2012
24 June 2013
3 Workshops in Armenia 15-19 April 2013 (exact dates t.b.d.)
4 Attendance of other relevant conferences, workshops etc.
5 Personal interviews with individual representatives of civil
society and stakeholders
Continuously
3. Consultations and stakeholders
Website / Email / Feedback form
• Websites:
tsia.ecorys.com/armenia
• Email:
• Feedback form
4. Identification of key issues
Screening and scoping
• Aim: to identify key sustainability issues DCFTA; for further in-depth analysis
• Selection criteria applied in screening and scoping exercise:
Number Criterion
Criterion 1 Initial importance for economy (GDP, employment, trade shares)
Criterion 2 Economic impact from DCFTA
Criterion 3 Social / environmental importance and impact / Human rights
Criterion 4 Stakeholder issues of special importance
Criterion 5
Strategic importance of sector/issue in the negotiations
4. Identification of key issues
Criterion 1. Initial importance for economy
• Utilities and gas distribution
› 12th export sector to the EU (2.1% of total)
› 4th largest sector in Armenia’s GDP (8.3 %)
› 4th largest unskilled labour employer (7 %)
› 3rd largest skilled labour employer (10.9 %)
• Trade
› 6th largest export sector to EU (4.3% of total)
› 3rd largest sector in Armenia’s GDP (8.8%)
› 5th largest unskilled labour employer (6.5%)
› 7th largest skilled labour employer (4 %)
• Primary metals
› 1st largest export sector to EU (39% of total)
› 17th sector in Armenia GDP (1.1%)
› 15th largest unskilled labour employer (1.5%)
› 12th largest skilled labour employer (0.9%)
• Construction
› 11th largest export sector to EU (2.3% of total)
› 1st largest sector in Armenia GDP (34%)
› 2nd largest skilled labour employer (14%)
› 1st largest unskilled labour employer (24%)
4. Identification of key issues
Criterion 2. Impact (economic) from the DCFTA
• Based on outcomes of Phase 1: mainly CGE outcomes + additional analysis
4. Identification of key issues
Criterion 3. Social / Environmental importance / Human rights impact
• Based on CGE outcomes and additional quantitative and qualitative analysis
Criterion 4. Stakeholder issues of special importance
• You!
• Based on inputs received from the Civil society, our local partners and existing
literature and documentation
» Implementation issues regarding TBT, SPS and IPRs
» Implementation issues regarding environmental / social / human rights
topics
» For example, think of heavy use of agricultural chemicals (pesticides)
4. Identification of key issues
Criterion 5. Strategic importance of sector in the negotiations
» Kick of meeting suggestions form the SC:
SPS, mining (especially important for the environmental and social
analysis), dairy, tourism and sugar.
» ......other suggestions
5. Planning
Activity Leaders Deadline
Kick-off meeting EC and Ecorys 8 November 2012
Draft Inception Report Ecorys 3 December 2012
Online publication of draft Inception Report 10 days before CSD Ecorys 7 December 2012
Civil Society Dialogue EC and Ecorys 12 December 2012 afternoon
2nd draft inception report (final version) Ecorys 10 January 2013
1st Draft Interim Technical Report Ecorys 1 March 2013
Online publication of draft Interim Technical Report Ecorys 6 March 2012
TSIA workshop Yerevan Ecorys 15-19 April 2013
1st Draft Final Report Ecorys 6 June 2013
Send draft inception report to Civil Society and/or summary 10 days before CSD EC and Ecorys 14 June 2013
Civil Society Dialogue EC and Ecorys 24 June 2013 afternoon
2nd Draft Final report (Final version) Ecorys 15 July 2013
Questions & Discussion
Contact us through:
W: tsia.ecorys.com/armenia
T: +31-104538781
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