Brussels, 04/11/2010 (Agence Europe) - Does Europe still believe in Doha? The draft new EU trade strategy that the European Commission will be unveiling on 9 November, an overview of which is set out in this article, does not give a clear answer. While restating the European Commission's commitment to ensuring success in the current round of multilateral negotiations at the World Trade Organisation (WTO), it insists that it wants to see an increase in bilateral free trade deals with emerging economies. The Commission says that the EU will remain open to trade but will not be naive, and the trade strategy will focus on increased access to services markets, public procurement and raw materials markets outside the EU, at the risk of generating tension with China and Russia. The policy is not supported by all the EU commissioners, however, and in a letter to Commission President José Manuel Barroso, Agriculture Commissioner Dacian Cioloº expresses serious reservation, regretting that the new strategy does not take sufficient account of the impact of bilateral deals on certain sensitive industries.
Following on from the strategy unveiled by his predecessor, Peter Mandelson of the UK, in 2006, the strategy developed by the current trade commissioner, Karel De Gucht of Belgium, is based on Europe's commitment to an open, fair and regulated trade system prioritising the adoption of a stronger approach to ensure that all stakeholders benefit from free trade. European public opinion about the EU trade policy was assessed in a Eurobarometer poll, the results of which will be published on 9 November 2010.
The Commission says that Europe has to seize the triple benefit of more open trade and investment, asserting that finalising the bilateral agreements, the Doha Trade Round and progress in strategic partnerships will enable the EU GDP to rise by 1% more by 2010 than would otherwise have been the case: “The gains from a wider variety of goods and services for the average European consumer are around €600 a year, in addition to the gains from lower prices”; and “it is generally agreed that the EU's integration in the global economy through increased trade generates more and better jobs”.
Less naivety in pursuit of free trade. “For an open trade policy to succeed politically in Europe, others - including both our developed and emerging partners - must match our efforts, in a spirit of reciprocity and mutual benefit. Trade policy will not gain public support in Europe if we do not have access to raw materials, or if access to public procurement is blocked, for example. The EU will remain an open economy but we will not be naive. In particular, the Commission will remain vigilant in defence of European interests and European jobs. It will fight unfair trading practices with all appropriate means.” The Commission says that the European agenda “must evolve” as the EUROPE 2020 strategy makes clear, explaining that while tariff liberalisation for farm and industrial products is still important, it is access to non-EU markets for services and investment, the opening of public markets, better intellectual property protection agreements, unrestricted access to raw material and energy and the elimination of non-tariff barriers through the promotion of international standards that will make the “big difference”. The Commission also wants to get the world to move towards a greener economy by means of world trade.
Keeping the focus on bilateral deals. The Commission says that conclusion of the Doha Trade Round at the WTO by 2012, despite the lack of progress since July 2008, “remains our top priority. However, the bilateral is not the enemy of the multilateral. The opposite may hold truer: liberalisation fuels liberalisation. That is why a large part of our energy will be spent on delivering balanced free-trade agreements.” A sign perhaps of apathy or deeply rooted pessimism about the possibility of concluding the world trade negotiations that have been rumbling on since 2001, the Commission is now clearly focusing on bilateral agreements: “We shall be working towards the conclusion of the Doha Round and the further strengthening of the WTO. Doha is much overdue. Doha is still precious to achieve, not only for the economic gains it will bring but also to confirm the central role of the WTO in the world trade system. Nevertheless the Doha agreement will not give answers to the newer questions that global trade rules ought to take care of.” The European Commission wants to set up a reflection group on the post-Doha situation.
The United States, Japan, China and Russia remain essential strategic partners with which the Commission is planning to strengthen relations, particularly through greater regulatory cooperation to lift non-tariff barriers with the US and Japan, but De Gucht is also planning to take European industry into other important growth areas. Thus, following the agreement recently concluded with South Korea, Peru, Colombia and the Central American countries (Costa Rica, Guatemala, Honduras, Nicaragua and San Salvador), the European executive wants to wrap up negotiations already at an advanced stage on free trade agreements with India, Canada, the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) and the countries of the Gulf Cooperation Council (Saudi Arabia, Bahrain, the United Arab Emirates, Kuwait, Oman and Qatar). The Commission hopes, too, to conclude bilateral agreements with a number of South-East Asian (ASEAN) countries - Singapore, Vietnam and Malaysia. These may be seen as “new generation” free trade agreements as, in addition to the removal of tariff barriers, they include more stringent provisions on intellectual property protection, competition, rules of origin, and good financial, tax and legal governance, and also provisions encouraging sustainable development (social and environmental standards). At the same time, the Commission is continuing to establish “areas of shared prosperity” with neighbouring countries as part of the EU's Eastern and Euro-Mediterranean Partnerships.
Going on the attack on raw materials and public procurement. With the EU having to face up to the scarcity of certain resources, the Commission intends to go firmly on the offensive to open up access to raw materials, even at the risk of creating tensions with China and Russia. For several weeks, China has been in the EU's sights over the scarcity of rare earth, a group of 17 minerals used by the electronic and automotive industries in a wide range of high tech products. No matter how hard China may deny any export restrictions, the Commission has not ruled out referring the matter to the WTO. Russia has not been spared either by the Commission strategy, for which viable and unrestricted supply of raw materials and energy resources is of “strategic importance” for the competitiveness of the European economy.
De Gucht is also determined to defend the EU's strategic interests in public procurement. While not going into fine detail, the Commission communication sets out the broad guidelines for establishing trade reciprocity in access to public contracts, in particular with China. The European executive plans to ban access to European public procurement for any third countries which apply restrictions. This is a step the EU could justify on the grounds that China has yet to sign up to the WTO agreement on public procurement (GPA) and that, as a result, the EU is not tied in to commitments towards China. Discussion is on-going between De Gucht's staff and the staff of Frenchman Michel Barnier at Internal Market on how to proceed.
Continuing liberalisation of services and FDI. The Commission also wants to continue the liberalisation of the global services market, including with emerging economies, while sticking to EU objectives on cultural diversity. It intends, also, to continue to work to bring neighbouring countries, such as Ukraine, Moldova, the countries of the Caucasus, Egypt, Jordan, Morocco and Tunisia, into the EU internal market for services - especially in the financial services, postal services and telecoms sectors.
The European executive arm also hopes to conduct more in-depth work on the EU package of measures, tabled in July this year, relating to foreign direct investment (FDI) to strengthen investors' rights. In this context, the Commission plans, before long, to propose updating relevant negotiating directives, beginning with Canada, Singapore and India. It suggests, moreover, that China should be the subject of a bilateral agreement on FDI exclusively.
Strategy for market access, ACTA and GSP reform. Continuation of the strategy for improving access by EU companies to third country markets, initiated in April 2007, is also a priority of the Commission which, in addition to strengthening the 33 teams already on the ground for identifying trade barriers and controlling implementation of bilateral agreements, provides for the publication of an annual report on trade and investment barriers of third countries. Finally, the Commission will put the final touches to the anti-counterfeiting trade agreement (ACTA), settled in early October, and present, in early 2011, a legislative proposal for reforming the EU's generalised system of preferences (GSP).
Deep reserve from Dacian Cioloº. In a letter addressed to President Barroso on 27 October, the agriculture commissioner regrets that the new strategy does not really take into account the impact that agreements sealed by the EU with third counties will have on “sensitive” economic sectors such as agriculture, which is subject at Community level to heavy regulatory constraints in order to protect the environment, and biodiversity. Bemoaning the fact that the college of commissioners had not taken the time to discuss the new strategy, Cioloº underlines that the EU trade agreements with third countries must above all be “balanced”, which, for the most sensitive economic sectors, means that they should also provide real, new opportunities for exports and that the volume of concessions for access to the European market should be limited and gradually reduced over time. Finally, the agriculture commissioner said he felt convinced that the Commission's strategy in favour of bilateral free trade agreements runs counter to the EU's important multilateral agenda, the Doha Round. (E.H./transl./fl/rt/jl)