Changing track on trade

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

The similarities between the EU and Canada have been rightly pointed out. But we should be working together on climate and environment issues, not just trade. [European Commission]

A potential CETA trainwreck was narrowly avoided this week, but the chaos surrounding the EU-Canada trade deal has been long in the making and may not be over yet, warns Pieter de Pous.

Pieter de Pous is the European Environmental Bureau’s EU policy director.

Those convinced that CETA is essential to maintaining EU credibility, growth and prosperity looked at the apparently impending crash in horror and fell over each other to scoff at the Belgian region of Wallonia for having the audacity to use the power it had been given.

CETA enthusiasts are right about one thing: the consequences of any fallout for the EU could be disastrous, but for a very different reason than they argue. The economic significance of this deal is marginal and pales in comparison to the economic benefits that would arise from an ambitious circular economy and clean energy policies.

The EU is still perfectly able to achieve these on its own with good old fashioned regulatory instruments. And the political cost of pressing ahead with these next generation type of trade deals that provide investors with special tribunals and put the removal of trade barriers before the protection of citizens has become prohibitively high. 

The potential failure of CETA has been billed by Canadian negotiators as a nail in the coffin for EU-Canadian relationships. They have emphasised the similarities between Europe and Canada and their desire to protect people and nature. If this is indeed the case then these countries should be co-operating on solving climate change and divesting from fossil exploration for instance, rather than putting all their eggs in the free trade basket with uncertain and unevenly spread benefits.

The real risk with CETA is that its supporters from across the political spectrum will see this debacle as a protectionist backlash and retreat into their trenches in defence of free trade, arguing that this is necessary for open societies and economies, and civilization itself.

This is highly dangerous as it plays straight into the hands of the far-right groups that are on the rise in most parts of Europe with their toxic offering of national identity politics. It is these groups that pose a clear threat to open societies and economies based on the rule of law, not the bulk of people opposed to TTIP or CETA.

Progressive groups including environmentalists, consumers, social rights defenders and trade unions, and the constituencies they represent, are the strongest possible allies for an EU that defends the fundamental rights of its citizens.

Member states and the EU institutions should therefore be listening to these groups, not tarring them with the same brush as the Front National in France or UKIP in the UK, for example. The worst thing that the political centre could do right now is plough ahead with deals like CETA and TTIP with the risk of permanently alienating some of the EU’s most important allies.

This risk of alienation is already very significant regardless of these deals.

Environmental groups like the EEB have condemned President Juncker’s environmental blindspot since he took office. By short-sightedly chopping away at environmental policies like the circular economy and calling into question flagship policies such as the EU’s Natura 2000 network, the Commission president seems consistently deaf to the gravity of the environmental crisis and the opportunities that solving it will bring.

Instead of pandering to the past, the EU can and should be leading the way with 21st century policies and standards that can help tackle the economic, environmental and social challenges we are facing. Where the EU leads, the world often follows, if for no better reason than to gain access to our markets.

Sweden has recently set a new bar in Europe, introducing tax breaks on the cost of repairing goods. If other countries want to be competitive in tomorrow’s economy they will have to follow suit. The EU can show the way forward for the rest of the world; we do not have to be hidebound by outdated ideas on trade as the only source of prosperity.

In short, the outlook for the EU after this CETA debacle can be anything except the grim picture threatened by many.  But a change of heart will be needed. Those who have so far been arguing that CETA is essential for the EU’s survival and credibility need to think carefully about what they really want: to save the EU or to save the EU’s trade policy in its current form.

It is clear that they can’t have both.

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