Dagmar Wolf

Trade agreements can help to reduce in the long run what makes people migrate from their home countries. But to do so, the agreements must be geared to sustainable development and deal with environmental and social aspects.
Other factors – including war and climate change – are probably more important for migration decisions, but trade can make a difference too. A recent report published by the German Institute for International and Security Affairs (SWP) examines the interrelationships.
According to Eva Schmieg, the author of the study, migration always has a positive effect on trade. Moreover, it deepens trade relations between the countries people left and those where they reside. Migrants make exports and imports increase, especially in the host country. This is especially true of highly qualified people who are also particularly mobile. On the other hand, the countries of origin suffer considerable “brain drain”. They lose tax revenues as well as the investment made in educating and training migrants.
Sub-Saharan Africa is particularly affected by brain drain. Schmieg points out that more than 20 per cent of the people who graduated from universities in sub-Saharan Africa now live in industrial countries. On the other hand, they are an important source of capital. A welcome side effect of their remittances and investments at home, moreover, is the transfer of knowledge and technology.
According to the SWP study, trade agreements can thus have positive as well as negative impacts on migration. Although a country’s openness is an important factor for economic growth, world market integration does not automatically reduce poverty. After all, economic change may also cause unemployment and even the collapse of entire sectors. The people affected are then likely to move abroad in hope of better opportunities.
But even if world-market integration leads to higher incomes, that trend may initially fuel migration. As Schmieg points out, people are only able to migrate once they reach a certain level of prosperity. In the long term, however, new trade flows and growth are likely to lead to less migration. Therefore, trade agreements should be designed in ways that they help to bring about sustainable growth in developing countries. World-market integration must go hand in hand with redistribution through social-protection policies and cushion off the negative impacts.
The EU has concluded Economic Partnership Agreements with African regional organisations. According to the author, they largely meet the requirements of sustainable development, but she sees room for improvement in many areas. For example, the agreements have so far been limited primarily to trade in goods. They hardly mention migration. Moreover, services have been excluded up until now.
Ecological and social aspects of trade and economic activity could be incorporated into all existing trade agreements, Schmieg argues, and renegotiations at eye level between all parties involved could bring about the desired results. Well balanced trade agreements would contribute to sustainable development and thus reduce causes of flight in the long term.

 Development & Cooperation