Paris counts on Trump to shock EU into action on trade

Matthias Fekl

The EU must latch onto the change of tack announced by the United States regarding international trade, and use it as an opportunity to redefine its own trade policy, according to France’s Secretary of State for Foreign Trade. EURACTIV France reports.

President Donald Trump’s decision to take the United States out of the Trans-Pacific Partnership (TPP), the world’s biggest free trade agreement, heralded the beginning of a new era in global trade policy.

The European Union will have to rethink its trade policy if it wants to contend for the position of global free trade leader, vacated by the United States.

“The American election handed Europe a unique opportunity to confirm itself as the world’s leading trading power,” Secretary of State for Foreign Trade Matthias Fekl told MPs in Paris on Tuesday (24 January).

European protectionism

“What will we Europeans do in response to this American protectionism?” asked Pierre Lellouche, a centre-right Republican MP and former secretary of state for foreign trade.

Lamy: 'Trumponomics' won't contaminate Europe

Former World Trade Organisation chief and EU Trade Commissioner Pascal Lamy has denounced Donald Trump’s protectionist trade policy for being outdated, telling a EURACTIV event he isn’t concerned that European politicians will follow the new US president’s cue.

“This should change the attitude of the European Union towards trade negotiations,” he added, calling on Europe to leave behind its “voluntary servitude” on the issue of free trade.

“There is an inversion of roles,” said Fekl. “On the one hand we have President Trump, who has adopted a very harmful attitude of withdrawal and national egotism, and on the other, the Chinese president attended Davos to present himself as the defender of international free trade.”

“It is quite interesting on an intellectual level, but it is also very worrying in reality,” the secretary of state added.

But the White House’s new-found protectionism could provide just the shockwave the EU needs to advance its stagnant trade policy.

TTIP and CETA

In 2016, a barrage of criticism of the contents of the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, the lack of transparency surrounding the negotiations and the lack of progress on important chapters brought the embryonic trade deal to a standstill.

“To me it looks like time is up for TTIP,” said Fekl, adding that “the European Commission appears to think differently.”

In fact, in spite of the stalled negotiations and the election of Donald Trump, Brussels has continued to promote TTIP.

TTIP: Negotiations ‘in the void’

Negotiations on the Transatlantic Trade and Investment Partnership (TTIP) are forging ahead, despite opposition from a number of countries. And the American elections are almost certain to compromise the deal. EURACTIV France reports.

Another thorn in the side of EU trade policy is the free trade deal with Canada (CETA), which is currently in the process of being ratified in the European Parliament. Pressure from France and Belgium over the Investor-State Dispute Settlement mechanism (ISDS) has delayed this process significantly.

Wallonia proposes new rules for negotiating international trade deals

The Belgian region of Wallonia, which gained worldwide notoriety by keeping the CETA agreement and an EU-Canada summit hostage for several days, unveiled the Namur Declaration on Monday (5 December), proposing a new way to negotiate international trade treaties.

For Fekl, the creation of a future international trade court in place of the ISDS mechanism, which would block companies from attacking public policy decisions regarding a country’s commitments under the Paris Agreement, bring added legitimacy to the deal. “But it will be up to you to ratify it,” he told MPs.

Not only will the agreement have to be ratified by the European Parliament, but also by the EU’s 28 national parliaments. This concession from the EU executive threatens to sink the agreement.

The French parliament will examine a resolution next Thursday (2 February), proposing that CETA should be ratified by referendum, rather than a parliamentary vote.

After these many defeats, Fekl called on Brussels to end the EU’s “routine of opening negotiation after negotiation without asking if there is any value in it”.

Reform proposal

“At EU level, we are continuing to push for this to be integrated into the communal doctrine, but we are not there yet, far from it,” the secretary of state said. France’s proposals on trade policy have not had great success in recent years.

One of these proposals is to bring MPs to the table in international trade negotiations.

On environmental issues, Fekl also wants to make the integration of new challenges into trade negotiations mandatory, “to conclude modern agreements that contribute to the COP 21 commitments”.

Similar processes should be established with regard to social issues, in coordination with the International Labour Organisation, according to Fekl.

Other proposals concern the reduction of the duration of the negotiating mandate given to the Commission by member states, which today is open-ended. As a result, some trade negotiations, like those with Mercosur, have been dragging on since 1999 with no end in sight.

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