The new EU trade strategy: What’s actually new?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

The new EU trade strategy unveiled by the European Commission contains much to be welcomed, but not much that is new, writes Isabelle Brachet. EPA-EFE/Francisco Seco / POOL

The new EU trade strategy unveiled by the European Commission contains much to be welcomed, but not much that is new, writes Isabelle Brachet.

Isabelle Brachet is the EU policy adviser at ActionAid International, an NGO working against poverty and injustice.

The recently adopted new EU trade policy contains much that is good. It reiterates the intention to support decent work and social fairness. It also includes strong references concerning the fight against climate change and the loss of biodiversity.

The Paris Climate Agreement will be considered an essential element of future trade and investment agreements. The narrative is greener than in the past, which is welcome.

The intention with the new strategy is to ensure international trade contributes to growth in Europe post-COVID. Well-being and the reduction of inequality should be the core objective of post-COVID policies. Whether or not there is growth doesn’t really matter.

More and more voices argue that GDP growth – producing more – is not an adequate measure of progress as it doesn’t capture essential things such as environmental and climate damage generated by our overconsumption and production model; or the massive unpaid care and domestic work, carried out for free mostly by women, and without which the economy couldn’t thrive.

Women’s unpaid care work has increased during the pandemic, with children at home and sick relatives to take care of.

These objectives have been captured by the EU Trade Commissioner with three words: Open because we want to keep boosting exports. Sustainable because trade needs to be greener and fairer. Assertive because we are going to better promote the interests of EU businesses in the World Trade Organisation (WTO), and make sure imports comply with all EU standards and are not subsidised by third countries.

Assertive? Making sure imported goods fully comply with all health, safety, animal welfare and other standards applied in the EU is most welcome. Avoiding imported products that are subsidised in countries where they are made is also logical, though the same should apply the other way round, one of the most obvious examples being in the field of agriculture.

So far, Europe has always secured WTO rules to its advantage, so that massive European subsidies for agriculture are considered acceptable and fair, in spite of the fact that most developing countries don’t have the resources to subsidise their own agriculture. As a result, local producers can’t compete with dumped European agriculture products flooding into their markets.

Open? To generate this growth, the Commission is proposing a stronger emphasis on creating market access opportunities for green goods and services produced in Europe and regulating digital trade at global level. The green and digital economy are going to be massively subsidised by the EU through the post-COVID recovery plans, which is welcome. Making sure European companies can better access foreign markets in these sectors makes sense.

However, nothing is said about least developed countries – which are struggling to pay back skyrocketing debt aggravated by their public spending for health and social protection in response to the pandemic. These countries do not have the resources to invest in these promising sectors. We believe these countries deserve a differentiated approach, with technology transfer, waivers on intellectual property rights, a focus on local industrialisation and important levels of protection for their own nascent industries.

Sustainable? Making sure labour and other human rights are respected in countries with which we have trade agreements was already prominent in the previous trade strategy adopted six years ago, though nothing significant has happened since then. It remains an objective of the new EU trade policy, which refers to two upcoming legislative proposals that have been called for by civil society organisations for years.

First, an EU law on corporate governance and accountability that should be tabled in June. If well designed and ambitious enough, it will improve respect for human rights and the environment in global supply chains of companies operating in the EU.

Second, an EU law to ensure that products contributing to deforestation can’t be imported in Europe. These are fundamental and long-awaited pieces of legislation, but they were in the pipeline well before the new trade strategy.

The third proposal is also not new as it was announced already more than a year ago: The appointment of a chief enforcement officer, to deal with complaints in case of violation of labour and other human rights, or environmental abuses happening in trading partner countries.

The expectation is that this person will “level-up social, labour and environmental standards globally” – an unrealistic expectation in view of the systematic and widespread abuses of labour and trade unions rights in so many countries with which we have trade agreements. In fact, low wages, restrictions on workers’ right to organise and lax environmental standards keep prices low – including for the raw material we need to produce goods in the EU.

But it gets even worse: Nowhere is there any reference to the fact that our trade agreements themselves contribute in many cases to human rights violations in partner countries.

It does so by restricting the right of farmers to traditional seeds, imposing intellectual property rights that restrict access to medicines and vaccines, dismantling the protection for local economic actors in developing countries whose industries are not ready to face global competition, exporting heavily subsidised agricultural products such as powder milk or poultry with devastating consequences for local producers in developing countries.

These adverse impacts have been shown again and again to have disproportionate effects on women. As long as European countries continue to ignore the adverse impacts of EU trade deals on people living in developing countries, trade will not be fair and women will continue to be exploited through paid and unpaid care work – making the wealthiest richer, and the powerful more powerful.

Something new? One new opening is to be noted, however. The Strategy announces that future trade agreements will include a chapter on sustainable food systems.

Let’s hope that this specific chapter will be based on the understanding that trade agreements should stop incentivising an unsustainable model of agriculture – intensive monocultures for export – and should protect local food systems and short food supply chains in Europe and in partner countries.

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