Two-pronged approach. On paper, nothing has changed. All the statements and policy documents on the future of global trade from Brussels and elsewhere are at pains to set out in the list of aims and fine intentions that the freeing up of trade shall continue. Expanding trade has always been seen, and rightly so, as a key positive area of human progress. Trade allows people to expand their knowledge, different civilisations come into contact with one another and things discovered by one group can be used by others. For some time now, however, precautions have been added along the lines that trade should continue to expand but should now respect a number of rules and criteria. This is a sea-change. We can talk these days of a two-pronged approach - eliminating protectionism in whatever form, including those that have not yet been properly fought against, while at the same time subordinating the opening up of borders to respect for certain key conditions.
European manufacturers and producers, whether in industry or farming, may have been the first to call for conditions to be applied, but they were soon followed by other countries and continents and the need for rules to be respected and for their respect to be seen as crucial is now widespread, with even China and other emerging economies demanding it, although some poor countries challenge the idea of their being expected to make reciprocal moves. The spread of these ideas makes it easier to report on European ideas and comments. China is now facing competition from other countries in Asia where production costs are even lower than its own; Brazil has introduced restrictions on foreign capital; not to mention India, which applies some pretty restrictive measures. The word “protectionism” is rejected and no country sees itself as committing such a crime, talking instead of fair trade, respect for the environment and, to a lesser extent, respect for social standards.
Free competition is not the only fruit. Basically, the question being raised is whether competition should be seen as the be-all and end-all of global trade. A well-known commentator has asked how fair it is to demand that a country's or a continent's economy be allowed to be destroyed by “unfair competition feeding on piracy and law-breaking”. These are not the terms used by the European Commission in its 9 November report on the EU's new trade strategy, but it has never hesitated in its analyses to openly and strongly criticise abuse and bending of the rules by China; I have reported on this on several occasions. The Commission demands reciprocity from its trading partners in Europe, reciprocity that is not always respected in practice - far from it. The Commission insists on reciprocity in access to public contracts, for example, announcing that it will unveil a European instrument next year to ensure symmetrical access in this domain with developped countries and big emerging economies. While calling for the Doha Round to be concluded next year, it is planning to pursue and conclude the many different negotiations under way at the moment on bilateral free trade deals with some of the world's giant economies that will include reciprocal requirements.
Europe should assert itself. The main objective quoted (the Doha Round) is questionable and several bilateral trade deals generate doubts (should free trade with Mercosur include Brazil?), but overall, the EU's new trade policy is based on reciprocity. The current EU trade commissioner, Karel De Gucht, is well-known for not mincing his words, sometimes exceeding the bounds of diplomatic speech, and so much the better. In interviews, he openly criticises abusive practices like the building of a motorway in Poland by a Chinese company whose workers are paid half the going rate and use dumping-priced materials. This is how he describes his attitude: “I favour the freedom of trade - that is clear, but I am not naive. I want Europe to stand up for itself. If, for example, the Chinese artificially blocked the sale of rare earth to European companies, that could not be tolerated.”
How do non-trading European companies react to all this? They criticise abuses by some non-EU exporting countries, arguing that European rules applying to their products should also apply to imported products in order to guarantee high quality and ensure that competition is fair. I will be returning to this.
(F.R./transl.fl)