Businesses and trade unions debate future trade strategy

Amid fears that the Democrats’ victory in US Congress could put an end to already troubled efforts to reach a global trade pact, the Commission has discussed future trade strategies with stakeholders.

While reaffirming its support for global trade talks within the WTO, the new paper, Global Europe: competing in the world, sets the conclusion of bilateral trade agreements as a top priority following the suspension of the Doha Round. 

While business views this approach as a necessary ‘Plan B’ that will help European companies gain access to new markets, thereby stimulating competitiveness and growth in Europe, NGOs see the Commission’s new trade strategy as an abandonment of the multilateral agenda and an attempt to push the interests of European business before the needs of the poor and the environment. 

In the meantime, bilateralism and regionalism could soon be the only ways forward for European trade policy as a successful outcome to the Doha Round looks increasingly unlikely following the US mid-term elections on 7 November, which saw the Democrats, who have a much less favourable stance on free trade, take control of Congress (see EURACTIV 7 November 2006). 

Positions

Trade Commissioner Peter Mandelson stressed that “bilateralism is not a plan B...because the Doha Round has not failed”, adding that bilateral deals will support the multilateral agenda by convincing countries of the benefits of opening up their markets, while providing more opportunities to pursue Europe’s sustainable development agenda. 

Stressing his commitment to multilateral talks, he called on civil society, business and trade unions around the world to step up the pressure on negotiators to get the Doha Round restarted within the coming weeks: “We have a short window in the weeks and months ahead to close a deal. If we do not, we risk losing the opportunity for some time to come, possibly years,” he said, pointing to the “worrying” growth of anti free- trade sentiments around the world, notably in the US where anti free-trade campaigners won an increasing number of seats in the recent congressional elections. 

In this context, he said, the Commission’s job is to promote openness: “It means ensuring that as we are open to others, they are open to us. That is not zero sum, narrow-minded mercantilism. It is about creating freer trade around the world as an essential condition of global growth.” 

Wolfgang Munchau, associate editor of the Financial Times, who was moderating the debate, agreed that the results of the US elections were worrying for the pursuit of global-trade talks, pointing to the expiry of US President George W. Bush’s fast-track trade authority - viewed as necessary to the successful conclusion of the Doha Round - in July 2007. Considering the anti-free trade agenda pushed by a large number of members of the new Congress: “It looks like there is no chance of Bush getting the trade promotion authority renewed,” he said. 

Former competition commissioner and Bruegel Chairman Mario Monti was less pessimistic as to the results of the US elections, underlining the fact that they also represented “the defeat of unilateralism in US policies”. Nevertheless, he warned that globalisation is increasingly under threat and urged business and the Commission to prevent nationalistic trends from prevailing. 

Ernest-Antoine Seillière, chairman of the confederation of European businesses (UNICE) said the new policy was a huge step forward compared to previous trade strategies, thanks to its focus on strengthening the global competitiveness of European companies and its new focus on bilateralism which “offers the possibility of going much deeper than the WTO”. 

Nevertheless, the conclusion of the Doha Round remains a top priority and UNICE Vice-President Michael Treschow urged Mandelson not to “give up” on it, saying that even plurilateral agreements would be better than unilateral or bilateral initiatives that create an increasingly complex and confusing legal framework for global trade. “We must save what can be saved,” he urged. 

John Monks, secretary-general of the European Trade Union Confederation (ETUC), underlined that he is “not opposed to the development of bilateral or inter-regional agreements”, which he views as important tools for promoting the EU’s positions on issues such as climate change, the environment, public health, intellectual property rights and technology transfers. 

However, he said, the Commission’s Communication on Global Europe follows the current trend of “delinking of trade policy from social, developmental and environmental considerations”. 

“Do we want to act like the Chinese, who…have launched an offensive on Africa aimed at extracting maximum trade benefits to them without any other consideration?…Europe surely is better than that,” he said. 

Europe’s trade policy must integrate basic principles, such as the promotion of decent work, social protection and core labour standards in all its negotiations, he said, criticising Mandelson’s choice of ‘priority partners’ for free-trade agreements, which include countries such as Korea and India that are “ignoring international obligations on workers’ rights”. 

Background

On 4 October 2006, Trade Commissioner Peter Mandelson presented a new strategy aimed at increasing the EU’s trade policy contribution to its Lisbon programme for growth and jobs (see EURACTIV 5 October 2006). 

On 13 November, the Commission organised its first policy debate with economic stakeholders on the strategy. 

Further Reading

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