Trade policy: time for a rethink?

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

Published in Bruegel’s collection of essays Fragmented Power: Europe and the Global Economy
, Simon J. Evenett’s contribution assesses the role and importance of the EU in international trade negotiations, and claims that “a fundamental rethink of the ends and means of European trade policy is in order”.

Arguing that “it is difficult to point to a string of (Commission) successes”, Evenett believes that the Commission’s decision to abandon its moratorium on negotiating new free trade agreements “seems more of a stop-gap measure to maintain some negotiating momentum than a systematic strategy to leverage European clout”, and risks “seriously undermining the multilateral trading system”. 

The new EU trade policy must: 

  • Reflect the shift away from a bipolar to a multipolar WTO; 
  • Recognise that the principal liberalising achievement of the multilateral trading system has been freeing up trade in manufactured goods between industrialised countries. 
  • Place greater emphasis on signing bilateral and regional free trade agreements. 

Evenett states that with the massive size of its economy and over 450 million “relatively well-off” customers, the EU should remain “at the top negotiating table in the decades to come”. 

He suggests that the new negotiating agenda be based on rules that “further restrict discrimination by national governments in the design and implementation of non-tariff barriers and domestic policies”, adding that despite the setbacks of the Doha Round, “the boundaries of the WTO have probably not been set in stone”. 

Regarding multilateral provisions that the EU values but its partners are not interested in, such as on labour and environmental standards, the response should not be for the EU to disengage from the WTO or raise trade barriers, but consider alternative combinations of formal international obligations and incentives, citing aid budgets as an example. 

Evenett believes that for the EU and its member states, the watchwords for the future will be “common ground, pragmatism and accommodation”. 

He concludes by stating that the EU will “need to meet a number of specific and important challenges in managing its commercial relations with certain neighbours in the years to come”, citing Russia, Ukraine and Turkey in particular. 

Foreign policy as well as commercial considerations will have a role to play, but must not “distract European trade strategists from the necessary task of establishing a new modus operandi for the multilateral trading system”, adds Evenett. 

Subscribe to our newsletters