In the face of growing public disquiet over free-trade deals and unfair competition by China, the European Council decided on Friday 21 October to beef up EU trade policy with agreement to update Europe’s trade defence instruments before the end of 2016 and the expiry of certain provisions of China’s protocol of accession to the WTO, which allow that country to be treated as a non-market economy in calculating anti-dumping duties.
European Council President Donald Tusk told the press corps after the summit that “our citizens are increasingly concerned about whether the trade deals we negotiate are in their best interest. And I am afraid that we won’t be able to continue to negotiate free-trade agreements if we do not prove in practice that we are very serious about protecting European consumers, workers and companies”.
“Today we have made some progress in this regard. Leaders committed to reach an urgent agreement on the modernisation of all the EU’s trade defence instruments”, he added, announcing that the heads of state and/or government had tasked trade ministers with breaking the deadlock and coming to an agreement on the proposal tabled by the Commission in April 2013 when they meet on 11 November.
At the end of 2016, a decision will have to be taken on whether or not to grant China market economy status. The Commission does not want to avoid its responsibility under international law, Commission President Jean-Claude Juncker commented. He went on, we cannot say to the people of Europe that China is a market economy but the constraints of Article 15 of China’s protocol of accession to the WTO have to be respected. He said, urging the member states to come to an agreement on the key issue of trade defences, that he did not want European industry, in particular the steel sector, to be sacrificed on the altar of an agreement with China.
“While supporting free trade, we have to make sure we do not abandon trade defence instruments. I urged the heads of state and government to ensure the member states follow the Commission’s proposals, something which some haven’t done fully, even though it is clear that the United States impose 100 times more than Europe in customs duties on some Chinese steel products. We have industrial interests which are social interests to be defended. I cannot accept that Europe should disarm to please others”, Juncker stated.
In their conclusions, the heads of state and/or government make clear that “unfair trade practices need to be tackled efficiently and robustly” and that “it is of crucial importance that the EU’s trade defence instruments are effective in the face of global challenges”. “This requires an urgent and balanced agreement on the Council position on the comprehensive modernisation of all trade defence instruments by the end of 2016. Adequate provisions should address situations in which market conditions are not prevailing”, they add. The Council took note of the communication adopted by the Commission on 19 October, urging the member states finally to agree on the proposal to update trade defence instruments to give it greater room for manoeuvre (see EUROPE 11649).
“We each see things differently. There are those who, through principle, put their trust in free trade. And there are others who ensure that there is protection, not excessive but which has to be affirmed when dumping is taking place”, said French President François Hollande, underlining, too, that “the Paris international climate agreement must be included in the definition of global trade rules”.
The leaders also underlined that it is important for a decision to be reached quickly on signing the free-trade agreement with Canada (CETA). It had been hoped that this would take place at an EU-Canada summit in Brussels on 27 October. On Friday afternoon, Belgium was still unable to approve the signing by the EU, a number of Belgian regional entities having refused to grant full powers to the Belgian federal government to endorse it (see other article).
“On CETA let me just say that I remain concerned, for a good trade agreement with a close partner like Canada and for Europe’s reputation. All member states but one endorsed the agreement”, regretted Tusk after the summit.
Lastly, the European Council determined the path to be followed in free-trade talks with other “key partners”. The Council invited the Commission to “actively pursue” negotiations with Japan, “with a view to reaching a political agreement by the end of the year”, with the US “to be able to present an ambitious, balanced and comprehensive” agreement, and with Mercosur, underlining “the importance of intensifying ongoing negotiations with other trade partners”. Interim Spanish Prime Minister Mariano Rajoy urged his peers to make “rapid progress” with Mercosur. (Original version in French by Emmanuel Hagry with the editorial team)