EU’s trade policy 'on trial'

David O’Sullivan, Director General of the Commission’s DG Trade, lambasted trade critics for their “vague and contradictory” accusations about Europe being at the same time too liberal, too protectionist and insufficiently development-friendly. 

The facts, he said, are that trade creates more jobs in Europe than those that are lost through competition with other nations; that Europe has the lowest protection levels in the world with average tariffs of less than 2%; and that the EU not only imports more from developing countries than the US, Canada and Japan combined, it is also the world’s largest provider of development aid. 

Developing countries need trade because it is “the lifeblood of growth and prosperity”, he said, adding: “There are no anti-globalisation success stories”. 

Then, entered the accusation, represented by Oxfam’s Celine Charveriat, claiming that, as the main culprit behind the melt-down of the Doha Development Round, the EU is responsible for squandering a once-in-a-lifetime opportunity to make trade fair. 

She accused the EU of failing to practice what it preaches on free trade, by maintaining exorbitant agricultural subsidies that allow it to dump products on poor countries’ markets, putting people out of jobs. 

The EU, she said, is guilty not of promoting trade, but of promoting the wrong kind of trade; citing the EU’s involvement in the multilateral agreement on intellectual property (TRIPS) as an example of the EU putting profit ahead of the needs of the world’s poor. This agreement, she said, seriously impedes developing nations’ access to medicines that are essential for their population. The stringent IPR rules that it imposes renders competition impossible and pushes prices up. “People are going to die because of this,” she said, urging the EU to be more ambitious in its trade policy. 

Charveriat’s first witness, MEP Caroline Lucas, reinforced the accusations against the EU, saying that the gap between what is says and what it does is huge. Although it claims to support free trade with a view to eradicating poverty and promoting sustainable development, what it actually promotes is massive deregulation, forcing third countries’ markets open and the destruction of the environment. 

54 developing countries are poorer now than they were 15 years ago, and EU Trade Commissioner Peter Mandelson's plans, presented in his new ‘Global Europe’ strategy, to “tackle restrictions on access to resources such as energy, metals and scrap, primary raw materials including certain agricultural materials” in countries such as India and Brazil, where most of the population still lives on less than $1 per day, will only serve to make things even worse and can only be categorised as outright “colonialism”, she argued. 

FOE Director Fouad Hamdam added that European trade neglected the impact of trade on environment. Resources must be trade in an intelligent, sustainable way and prices of products on our markets must reflect their true environmental cost. “Not everything needs to be traded,” he said, saying that putting a halt to unnecessary imports of products that are already available in Europe would considerably reduce international transport flows and have a beneficial effect on the environment. Lucas provided figures to back up Hamdam’s argument that, saying that 50% of all trade consists of exchanging the same products at the same time, contributing massively to climate change. 

MEP Erika Mann then came to the bar in defence of the EU’s trade policy. She argued that it is precisely the EU that is “putting value” into the trade debate. Her main exhibit was the human rights clause that is contained in all of the EU’s bilateral agreements thereby promoting the development of democracy in the world. 

Craig Burchell of Philips backed her up on this point, saying that not only does the EU promote human rights in partner countries, it also exports higher environmental and labour standards to the rest of world. He also reminded the jury that a key stakeholder was being left out of the debate: consumers – who profit from trade through cheaper prices and increased choice. 

He furthermore noted that when discussing the impact of trade on the environment, the real question is not “Is trade good?” but rather “are we paying the right price?”. Here, he pointed the finger at the aviation industry, which continues to be exempted from paying taxes on kerosene thereby worsening the climate change problem. 

In his closing arguments, David O’Sullivan stressed that the world’s problems could not be solved solely through trade policy. By overloading Europe’s trade policy with environmental, social and human rights issues and threatening sanctions in the case of third country non-respect, the ultimate result will be that there will be less trade and less prosperity all around. 

Developing countries do not want to hear Europe telling them that they cannot trade unless they fulfil certain social and environmental standards. They want the right to develop. If Europe were to do this, “this would be neo-colonialism,” he stressed. 

Although pleading guilty to a few minor charges, such as the need to get rid of trade-distorting agricultural subsidies CAP, and admitting that the EU could do slightly better on environmental and social issues, he said he believed that the EU had found the right balance in its trade policy and refused to be charged of any offence in this area. 

Ultimately though, the plaintiffs succeeded in winning over a number of members of the jury with their arguments that, while trade is a core element for growth and development, people and the planet must come first. 

They argued that developing countries must be able to choose the pace at which they open up, instead of having the EU impose its own pace of trade liberalisation, as it is doing in the context of the Economic Partnership Agreement negotiations with African, Pacific and Caribbean countries. 

Lastly, they told the jury that the EU could do more to promote human rights, democracy, environmental protection and social standards in the world, stressing that it is not because governments don’t want better labour standards, for example, that trade unions do not want them. 

In the final vote, the jury was split 50-50 over the guilt of the EU’s trade policy.