As part of the reflection on the future of Europe that was launched with the publication of a White Paper on 1 March, the European Commission presented guidelines for reflection, on Wednesday 10 May, that are clearly based on free trade dogma, in order to better manage globalisation so that its advantages might benefit all European citizens fairly – and, beyond that, all peoples of the world.
In the face of hostility towards globalisation and a rise in protectionism and isolationism, the Commission is trying to counter-attack by launching a wide-ranging debate on how the EU and its member states can “shape globalisation so as to improve Europeans’ living conditions, on the basis of a fair appreciation of the advantages and disadvantages of globalisation”, it says in a 25-page reflection paper.
The Commission is sure about the positive contribution of free trade for the EU’s economic growth: every billion euros in additional exports contributes to the creation or preservation of 14,000 jobs, and its less expensive imports benefit poorer households, it assures. But it admits that these gains “are not automatic or spread evenly” and that the EU is affected by differences in social, environmental and safety standards with third countries, which are translated into unfair competition and thus the closure of factories, jobs losses, and downwards pressure on salaries and working conditions.
“We must now see how we can manage globalisation because it will be an even greater problem in 2025. There is no protection in protectionism, and isolationism would make us lose opportunities – and we will pay the price for this. Globalisation brings new benefits for the European economy but this makes little sense for our citizens if the benefits are not spread fairly and more evenly”, European Commission First Vice-President Frans Timmermans told press.
On the external level, the Commission advocates shaping a "truly sustainable" world order, suggesting that the EU might take the leadership in writing a new body of rules at world level, "in line with its interests, values and standards" and based on "effective" multilateral institutions and a "fair" settlement of disputes, Timmermans states, adding that the EU would uphold its approach within the G7 and G20.
This global body of rules would aim at ensuring fair competition conditions by fighting unfair practices like tax fraud, harmful state subsidies or social dumping. "If the EU could defend the fight against tax evasion with a single voice at the G20, that would already be significant. This is only one example illustrating the need for global governance", European Commission Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen said, also highlighting the EU's leadership in creating a multilateral court to settle investment disputes.
The Commission is also working on the negotiation of free trade agreements, including binding clauses on the respect of social and environmental standards, along with sanctions for violations of these standards, Timmermans said.
On the internal level, the Commission is building on work at national level for "more robust" social policies, along with "safety nets", according to Timmermans, and on "reformed structures" for social security, according to Katainen, adequate support on education and lifelong learning, "progressive" tax policies and investment in innovation.
In the meantime, the Commission advocates the use of the European Structural Funds to help vulnerable regions, and the European Globalisation Adjustment Fund to help workers who have been dismissed find a job.
"Better redistribution would contribute to ensuring social cohesion and the solidarity on which our Union is founded. Globalisation can be beneficial if it is well managed", Timmermans stated, asking the member states and regions, international partners and other stakeholders to work together with the EU.
Katainen pours cold water on a Buy European Act. Questioned by press about the plan of French President-elect Emmanuel Macron – in the framework of his vision for a "Europe that protects" – for a Buy European Act, which would reserve access to European public procurement for companies with at least half their production in the EU, Katainen warned on Wednesday that it "would not be in line with European rules".
"We don’t know concretely what he [Marcon] is going to propose. But generally speaking, if he had some sort of quotas that public authorities must buy products or services no matter what the quality no matter what the price, only on the basis of geographical quotas, it doesn’t fit very well to our public procurement principles. Because these principles have been created in order to protect taxpayers’ interests. So taxpayers can trust on public authorities that once they play by the rules, the quality and the prices, you can get the best from the market. And also the goods and services providers can be sure that they are treated equally, there’s is no country based discrimination", Katainen said.
Mixed response from the European Parliament. On behalf of the EPP, Françoise Grossetête from France hailed the proposals put forward by the Commission, especially as regards the reciprocity of access to public procurement, the modernisation of trade defence instruments and the fight against tax evasion, particularly in the digital domain, but she called for "more ambition" on the control of foreign investment in strategic domains for the EU.
On behalf of the S&D Group, Jeppe Kofod from Denmark said that the Commission's document was "not fully balanced". "The Commission puts too much emphasis on markets and not enough on people", he said, adding: "the offshoring of manufacturing has left wastelands and huge pockets of unemployment, and digitisation leaves people concerned about their jobs and even more worried about their children’s futures. Recognising a problem is a first step towards solving it. It is high time we recognised the negative impact of globalisation and strengthened our labour markets in response. Active labour-market policies are crucial, both to protect job security and combat inequality".
Speaking for the Greens/EFA Groups, Ska Keller from Germany accused the Commission of "allowing free rein to unharnessed globalisation". "References to initiatives such as that on sustainable development proposed by the UN will not be credible as long as the EU favours global deregulation through unfair trade agreements. We want openness and fair global trade, not a return to nationalist protectionism. Which does not in any way mean giving a blank cheque to economic greed. The EU must act to put an end to the practices of international tax evasion and optimisation so that the winners of globalisation, to which all the big international groups belong, contribute to the common good. We also want fair trade relations based on ecological and social standards worldwide", she said. Philippe Lamberts from Belgium called for "Social Europe to be strengthened through a real investment plan for sustainable jobs, particularly in the renewable energy, healthcare and research sectors". (Original version in French by Emmanuel Hagry)