CPR (10) 5 – Part II - Sustainable Regions under Global Rules 1 (06/05/03)

Rapporteur: Ute KOCZY (Germany)

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EXPLANATORY MEMORANDUM

Introduction

In 2002, the Committee on Sustainable Development of the Chamber of Regions of the Congress decided to prepare a report in order to analyse the impact of globalisation on the European Regions and on the opportunities for future sustainability of these last.

Also the European Regions are directly affected by new “globalised” world: they need to be prepared to adapt themselves to these rules but they also have the responsibility to contribute to the protection of the global welfare and to a globally sustainable development.

Globalisation requires not only global regulation at the international level, but also a matrix of different steering mechanisms, which can be summarised under the concept of global governance. Being responsible for the global future also includes being responsible for the well-being of citizens, economic structure and local environment within the global economy; in other words it is also important for the regions to maintain their systemic competitiveness.

In this perspective the Recommendation of the Congress asks the national governments: to establish a consultation mechanism for local an regional authorities with a view to ensure that their interests and concerns about sustainable development are taken into consideration in international negotiations; to start an open dialogue with the actors of civil society at the regional and national level, following the example set by the European Commission and to support regional authorities in their efforts to implement a proactive and successful integration into the global economies by fostering their sustainable competitiveness.

The Resolution of the Congress calls on local and regional authorities to consider new cooperative international policies as ways to solve problems of global change. In this respect the concept of global governance is considered as a good reference. Regional authorities are also asked to consider that they have a central responsibility to check whether implementation of global action at national level harmonizes with the local level. At the same time regions are asked to use their expertise to put local experience up to the global level and to focus their attention on the growing importance of "sustainable investment" supporting the enterprises in their efforts towards an increased sustainability.

The report2 has been prepared with the precious help of the International Council for Local Environmental Initiatives (ICLEI) who acted as a Consultant of the Congress and has been approved by the Committee on Sustainable Development of the Chamber during the meeting held in Strasbourg on 24 April 2003.

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The report of the Congress contains some policy Recommendations and develop a number of ideas founded on three central hypotheses:

1. Subnational governments have a responsibility to contribute to the protection of the global commons and to globally sustainable development;

2. Globalisation requires not only global regulation at the international level, but rather a matrix of different steering mechanisms, which can be summarised under the concept of global governance. To constitute this, regions play a crucial role;

3. Being responsible for the global future also includes being responsible for the well-being of ones own citizens, economic structure and local environment within the global economy – in other words maintaining the region’s systemic competitiveness.

Regions and cities acting at the local level

The main focus of regions and cities is on actions to take within their own constituency. Here, a clear mandate from the World Summit on Sustainable Development held in Johannesburg last year exists. This should be implemented by both regions and cities, even when the messages mostly address the local level specifically.

We believe that all subnational authorities should make sure that a Local Agenda 21 process has started. For Europe, the Aalborg Charter from 1994 still holds valid as a guiding document. Regions and cities, who have established a fruitful Local Agenda process, should now look into the next step. Under the motto “Local Action 21” the priority areas for action have to be identified and then implementation planned.

One of the main points stressed by the report is the General Agreement on Trade in Services (GATS). The following steps are proposed as guiding suggestions for subnational authorities. The idea is to execute all projects:

A sustainability Check; the central aim of political steering, even in the service sector, should be to set up a sustainable structure. In our opinion, the central question here is: is this service sector in line with the sustainable development of our region?

A GATS Check; in order to assess all services provided, supported or regulated by the public authority, in terms of whether they would be affected by GATS. The central question here is: are there private or public operators with a commercial interest fulfilling the service?

An efficiency Check should be undertaken in parallel independently of whether there is a legal obligation/assessment or whether opening the market would make sense in terms of efficiency.

In addition, it is advisable to define service areas to protect: identify the services, which should be protected from market opening. While these areas should be communicated to the national or EC negotiators; solutions should also be prepared on how to mitigate the feared negative effect. This could mean, for example, considering bringing a public service back into the public domain rather than having it carried out by a publicly owned commercial company.

An action of reviewing regulation is also desirable. For all regulations, it is necessary to ensure the sustainable development of a service sector and to develop regulations that conform with GATS. These regulations should not to be discriminatory toward foreign competitors.

We feel that these suggestions can help the European Regions for new global rules and at the same time achieve improvements in competitiveness and quality of life for their citizens. It is likely that many of the measures developed make sense even without the legal pressure from GATS or are not even affected by GATS and Johannesburg at all. This would reflect the fact that diminishing control of national governments not only leads to globalisation, but also to increased responsibility at the subnational level.

Regions and cities in an international context

The report shows an urgent need for the subnational government level to monitor much more closely what is happening within the World Trade Organisation (WTO) and take a greater advocacy role. The investigations and meetings which have taken place within the framework of the report have already shown that national and European negotiators as well as experts within international organisations are not aware of the needs of subnational governments.

We have suggested that such monitoring and advocacy would have to cover the following aspects:

· Ensure that commitments on certain service sectors are made in a way that leaves political steering opportunities to subnational governments. This includes specifically defining in which commitments to opening markets at the national levels need to include specific exemptions for the subnational levels, e.g. the freedom for a government to define a service in its constituency to be purely public and therefore not subject to opening the market.

· Report back to subnational government on which service sectors are under negotiation to be included in commitments – and how this will happen. This would be an early warning mechanism to react to negotiations, but should also contribute to early adaptations to forthcoming regulations. In fact, virtually none of the GATS commitments are legally binding directly, but first have to be implemented in national law. Therefore, the question, how the regulations are going to be implemented nationally should be influenced in time.

We have to consider that currently there is no organisation, which would have the resources needed to undertake this monitoring process. Subnational governments should not rely on NGOs to do their job, but should seek to create capacities on their own within the existing international local and regional government organisations. Nevertheless, the work of civil organisations like NGOs should be welcomed and appreciated.

In the Resolution, we have also stressed that subnational governments have a huge potential to learn from other countries’ experiences. Therefore increased international networking on sustainability should always play a crucial role.

National governments

In the report, we have stressed that unfortunately national government do not consider the implications of international agreements on subnational governments. Some attempts exist though: the integration of local government representatives in the national delegations which took place in Johannesburg is an example.

But, particularly with a view to the current WTO negotiations, the effects for subnational governments need to be reflected much more clearly at the national level. For the Recommendation stresses that national governments have the responsibility to establish a consultation mechanism.The mechanism existing at the European level from the side of the European Commission DG Trade could be a good example in this respect.

One particular point within GATS, which potentially could be a good example for other areas, is the Sustainability impact assessment to be carried out on the commitments to come. Here an impact assessment with a particular view to subnational governments should be conducted.

We feel that National governments should have in mind that consultation of this kind is not only a question of the legitimisation of decisions taken, but also contributes to much more effective implementation of policy goals. Only if subnational governments are prepared to take action, will the liberalisation of service sectors take place in a favourable way.

Preparing subnational governments for developments to come also includes building the appropriate capacities. Many public authorities currently do not have the know-how to manage a competitive call for tender on public services, which would ensure a high level of quality. Administrative structures are not prepared for this. This has been stressed also by the Recommendation 114 (2002) of the Congress on “Local Authorities and Public Utilities”. Therefore international bodies and national governments should consider setting up capacity building programmes in this respect.

The investigations on the effects of globalisation are still open and controversial. In many cases, even national and international institutions have difficulties in tackling the phenomenon. What we can certainly say is that the European Region’s needs and points of view should not be neglected. We hope that the report can be considered as a useful contribution to debate and an helpful instrument for all European Regions.

1 Approved unanimously by the Committee on Sustainable Development of the Chamber of Regions on 24 April 2003.

2 the full report is contained in document CPR/DEV (9) 4



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