Brussels, 01/06/2012 (Agence Europe) - Trade with the rest of the world is a key engine of economic growth in Europe and the EU Council of trade ministers agreed on Thursday 31 May that the EU must continue focus on free trade via trading deals with strategic partners, while remaining engaged on the multilateral front.
Meeting for the second time under the Danish Presidency on Thursday, EU trade ministers discussed how foreign trade boosts growth and job creation, preparing for the 28-29 June European summit. Chaired by Pia Olsen Dyhr, the ministers said foreign trade, investment and the integration of markets were key engines for strong, sustainable and balanced growth. Trade policy plays an important role and is currently one of the main growth engines in Europe, trade being the only positive growth engine in the EU in 2012. If trade had not grown by 0.7%, then there would not have been any growth this year, explained the Danish Presidency at a press conference after the Council meeting. Olsen Dyhr said that from 2015 onwards, 90% of world growth will be outside Europe and the EU must take advantage of it. She said that if they come off, all the free trade deals currently under negotiation between the EU and other parts of the world would increase EU27 GDP by 2.2 %, generating an estimated €275bn-worth of growth and 2.2 million jobs.
On Thursday, the trade ministers asked the Commission to continue to encourage an opening of strategic partners' markets, to meet the aims set out by EU leaders at the Spring summit, which called for a lifting of trade barriers, better access to markets and better investment conditions. The June European summit may give the Commission a negotiating mandate for a free trade deal with Japan, now that it has been decided exactly what the deal with cover (as Trade Commissioner Karel De Gucht announced on Thursday). Beforehand, the European Commission must provide ministers with clear negotiating guidelines to win over the more reluctant member states, particularly France and Italy, and get them to agree on free trade talks with an economy that is very protective of its farming and does not allow foreign access to its public procurement market. Like the trade ministers on Thursday, the EU27 heads of state will be briefed on progress at the high-level group set up at the end of 2011 to assess the feasibility of a free trade deal with the United States. A fortnight ago, De Gucht lifted the veil on the high-level group talks (an interim report will be published later this month). The deal would cover customs duty on goods, a lifting of barriers to trade and investment, non-tariff barriers and regulatory convergence. A trade deal will only be negotiated if both parties are certain that it would have a positive impact on growth and jobs in the short-term. De Gucht hopes negotiations can start in six months' time and be concluded within 18 months.
In search of short-term sources of growth, the EU implemented its first new generation free trade deal in the summer of 2011 with South Korea, and hopes to sign many more in the future as negotiations are advancing well. Trade deals with Canada and India might be signed by the end of this year if remaining issues (like rules of origin, services, investment and public procurement for Canada, and cars, wine, spirits, services, public procurement and sustainable development for India) can be settled over the next few months.
In South-East Asia, trade talks are continuing with the Philippines and may be launched shortly with Indonesia, but the opening of talks with Thailand is still in suspense, awaiting endorsement by the Thai parliament. The talks with Singapore and Malaysia are at an advanced stage and the EU will shortly enter talks with Vietnam, after ministers gave the Commission a negotiating mandate on Thursday.
In Latin America, talks with MERSCOSUR (Argentina, Brazil, Paraguay and Uruguay - Venezuela is in the process of joining) are very slow and hampered by the poisoned atmosphere following the rise of protectionism in Argentina, but the multipartite EU trade deal with Colombia and Peru may come into force later this year as long as the European Parliament, concerned about human rights, labour rights and environmental protection, gives the go-ahead after the summer holidays. The free trade deal between the EU and Central America (Costa Rica, Guatemala, Honduras, Nicaragua, Panama and El Salvador), which is in the process of being signed, may also come into force this year.
While continuing to focus on free trade, the EU is clearly pursuing a path now of deals with individual countries, while awaiting a full multilateral deal at the WTO as part of the Doha Trade Talks. On Thursday the Danish trade minister, Olsen Dyhr, said the EU was committed to Doha, but because there has not been any progress, free trade deals are needed so that the EU can move forward. (EH/transl.fl)