‘Mr. Free Trade’ makes Brussels comeback

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Sir Leon Brittan, the long-serving UK commissioner for trade and for external affairs (1989-1999), known as a strong promoter and in his own words a "believer" in the free market, has made his first Brussels visit in a new capacity after an eleven-year absence.

Leon Brittan, now trade advisor to UK Prime Minister David Cameron, met with a small group of journalists following a dinner on 10 November with EU trade ministers, organised by the Belgian EU Presidency, at which he represented his country.

The aim of the meeting was to discuss a European Commission blueprint for trade policy for the next five years, which was published the previous day.

Asked about the differences he perceived in coming back to the EU carousel after eleven years, he said that in spite of treaty changes and power shifts, the major difference was the larger number of EU countries around the table (now 27).

"Going to the dinner last night, which was the first such thing I've been to in eleven years, [I saw the EU] is manifestly recognisable as the same animal," he said.

Brittan was visibly pleased to be talking to the press and said he had been "very well received" in Brussels, "not just by politeness". Indeed, his long-term prestige – boosted by his two terms in office as commissioner for trade and external relations, which in the late nineties included enlargement – seems to have remained intact in Brussels circles.

Commenting on trade, his favourite subject, he said the UK regarded trade and investment as a major engine for growth at a time when growth was "sluggish, to put it mildly". Removing trade barriers would be crucial to stimulate growth and create jobs, he insisted.

Restarting the Doha Round

The challenge, Brittan explained, is to kick-start the Doha Round of global trade talks [see 'Background'], while proceeding simultaneously with the bilateral trade agreements that major players are negotiating.

He said he hoped the G20 summit in Seoul would discuss such an option and offered some insights into the consultations he had held in Geneva, Washington and Paris, as well as with representatives of "difficult countries".

He said he understood that if there was "an end game on Doha", the "difficult countries" would have "more in their pockets which they could empty out".

"The question is: how do you get them to move to the end game?" he said, adding that he hoped that the Seoul summit would find a formula.

Brittan said the EU would also have to show its hidden cards if there was to be a serious end game. "But let's first get there," he added.

But he warned that if there were to be no agreement in the first half of 2011, then the whole Doha Round would "run into the sand".

Against protectionism

Asked to comment on whether some of the proposals on public procurement in the Commission document could be interpreted as reducing access for outside partners, Brittan said he hoped this would not happen.

"It would be a mistake. I think we should be asking other people to open their public procurement markets instead of closing our own markets," he said.

"We [the EU] are the gainers from open markets and we could be bigger gainers if others would open their markets more, but we won't gain anything by closing our own," he further argued.

Instead of resorting to protectionism, the EU should exercise its "considerable diplomatic and commercial muscle" to get other countries to open their markets, Brittan suggested.

"We don't have to underestimate the ability we have to do that," he said.

A different view on currency wars

Brittan was asked to comment on German Chancellor Angela Merkel's stance, largely taken on board by Commission President Barroso, that major economies refrain from competitive devaluations of their currencies.

Brittan indicated that the UK was keeping its distance from the German position. In fact, he argued that Chinese expansion policies had played a positive role for the world economy.

"The question comes when you reach the turning point, when inflationary risks exceed deflationary ones. This is viewed in different ways in different places," he said.

Asked to comment on Merkel's idea of "benchmarks" to calculate what a fair exchange rate is, he said he would be surprised if any quantifiable benchmarking with regard to currencies were agreed upon in Seoul.

Human rights vs. Trade

Brittan deemed "unrealistic" the possibility that the EU could push for human right clauses to be included in trade agreements, as the European Parliament advocates.

"I'm not aware of any evidence that the inclusion of such a clause has prevented any country from doing what it wants to do, or forced any country not to do what it has wanted to do. I am highly sceptical about the value of such clauses," Brittan said.

UK government taking 'positive action' with EU

Asked to comment on the fact that on a number of occasions, the Conservative-Liberal Democrat coalition in Britain has proven less Eurosceptic than many had expected, Brittan saw greater credit for this in David Cameron's positions.

"I welcome the fact that the coalition government is taking positive action towards Europe," he said, adding that he doubted that the Conservatives positions vis-à-vis Europe would be much different had they formed a government on their own.

Asked if there was a chance that the Tories, who created the separate European Conservatives and Reformists group in the European Parliament following the 2009 EU elections, would rejoin the European People's Party, he said he saw "no imminent sign of this happening".

The European Commission unveiled on 9 November its blueprint for an EU trade policy to help revitalise Europe's economy. In its discussion paper 'Trade, Growth and World Affairs', the Commission analyses how trade is an engine for economic growth and job creation. It proposes a strategy to reduce trade barriers, to open global markets and to get a fair deal for European businesses.

At the G20 summit, the EU representatives will raise, among other issues, the idea that recovery following the economic crisis can be sustained by boosting trade. As Commission President José Manuel Barroso and Council President Herman Van Rompuy indicated in their letter, sent to G20 leaders ahead of the summit, "trade is the most effective way to boost global growth".

Barroso and Van Rompuy called on G20 to give a strong political impulse to a rapid conclusion of the Doha Round negotiations, which were commenced in 2001 with the objective of lowering trade barriers globally.

The most recent Doha Round of negotiations in July 2008 broke down after the sides failed to agree on agricultural import rules. Since then, intense bilateral negotiations have taken place.



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