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Addressing the economic dimensions of peacebuilding through trade and support to private enterprise

Conflict-sensitive trade and private sector development policies for the EU

Authors: C. Gündüz; C. Vaillant
Publisher: International Alert, 2006

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This paper explores how the European Union’s (EU) economic policies can enhance peace and development. The authors argue that putting peacebuilding at the centre of the European Union's range of economic development and trade policies could contribute to greater policy coherence for development, but also help support the kind of economic growth which can help societies and regions permanently emerge from violence and war.

In particular, the report focuses on the areas of trade policy and private sector development (PSD). The report discusses:

  • EU trade policy in developing countries
  • a conflict-sensitive approach to regional trade integration trade in African Caribbean and Pacific (ACP) countries
  • links between trade and violent conflict
  • linking Economic Partnership Agreements (EPAs) with instability in ACP countries
  • links between private sector actors, peace and conflict

The report recommends the following actions for integrating EU economic activities with peacebuilding. On trade, the reports recommendations include:

  • widening understanding of the links between trade and conflict, and establishing institutional mechanisms to ensure the conflict-sensitivity of trade policy and trade-related assistance
  • focusing on in-country capacity to raise domestic revenues and access new markets
  • a longer transition period than currently suggested by the EU under EPAs in order to allow time for addressing the numerous structural constraints that stop ACP countries competing effectively among themselves and with their European partners widening and deepening the participation of all civil society and business actors in EPA processes

On PSD, the report recommends:

  • developing institutional capacity to identify and respond to conflict issues that impact on EU PSD programmes
  • engaging the private sector in partner countries in policy dialogue
  • promoting conflict-sensitive foreign direct investment and business-to-business linkages
  • conflict-sensitive finance
  • reinforcing the benefits of business networking