The Executive Vice-President of the European Commission, Valdis Dombrovskis, will undoubtedly add foreign trade to his already extensive portfolio of competences. After his hearing in the European Parliament, the EPP and S&D groups expressed their positive assessment of the Commissioner-designate’s performance on Friday 2 October.
Demonstrating strong knowledge of trade issues, Mr Dombrovskis made no major news. These issues could be included in the results of the review of European policy, which the Commission will present in early 2021. He took up the European Union’s traditional position on the defence of the multilateral system and the more recent one on ending European naivety in the face of its main foreign competitors. Sustainability issues from a social and environmental point of view featured prominently in the three-hour discussion with MEPs.
Sustainable development. In his introductory and closing speeches and in his answers to questions from MEPs, the Vice-President pledged repeatedly to “further strengthen” the implementation of the ‘trade and sustainable development’ chapter of the EU’s trade agreements with non-Member States.
Asked by several MEPs how he intended to achieve this, Dombrovskis said the Chief Trade Enforcement Officer, Denis Redonnet (see EUROPE 12535/22), would have an important role to play. A position he had already expressed in his replies to written questions (see EUROPE 12571/21).
Regarding the possibility of providing for sanctions for non-compliance with this chapter in future trade agreements, he expressed his willingness to explore this avenue. “But we have to see what our trading partners will ask for in exchange”, he added.
He further stated that the Commission is “very interested” in the joint working document published in May by Paris and The Hague (see EUROPE 12480/14), in particular the proposal to apply tariff reductions in a progressive, if not reversible, manner linked to the effective implementation of the ‘trade and sustainable development’ provisions.
Due diligence. The Vice-President also has high expectations that the forthcoming ‘due diligence’ mechanism will help strengthen the implementation of provisions on human rights, gender equality, and the prohibition of forced and child labour.
In this respect, he announced that he will work to take forward the Commission’s proposal on the subject so that it can be presented next year.
In his view, this initiative will be particularly important in the EU’s relations with China, which is accused of forcing the Uighur community to work for big brands such as Nike.
This new legislation will force companies in the EU to be fully transparent about the origin of the goods they sell, thus preventing goods, especially those produced through forced labour, from being imported into Europe, Dombrovskis said.
Mercosur. Asked several times about his intentions with regard to the Mercosur free trade agreement, Mr Dombrovskis confirmed that he did not intend to continue the process of ratification of the agreement until the EU had obtained commitments from the Mercosur countries, particularly Brazil, to combat deforestation.
However, he ruled out the possibility of reopening the negotiations, stressing that the EU’s credibility as a trading partner would suffer greatly in view of the 20-year-long negotiation process that led to the conclusion of the agreement (see EUROPE 12286/3).
Border carbon adjustment. Asked by Massimiliano Salini (EPP, Italy) about the difficulty of setting up a border carbon adjustment mechanism compatible with World Trade Organization (WTO) rules, the Vice-President recalled that the Commission is currently examining several options (see EUROPE 12534/10).
Whichever option is chosen, it must necessarily avoid discrimination between imported and domestic products, he said.
A stronger EU internationally.
The Executive Vice-President pleaded for a Europe capable both of asserting itself in the face of turbulence from the United States and unfair practices and counterfeiting from China, and of acting to explore new business opportunities while defending its interests, values and standards.
Dombrovskis argued that “85% of economic growth will come from outside the EU” in the coming years. To Immaculada Rodriguez-Piñero (S&D, Spain), for whom, faced with the US and China, the EU will be “decision-maker, referee or victim”, he replied that, if “non-Member States do not play by the rules, we must defend ourselves”.
The Commission will therefore present a communication on European sovereignty.
On several occasions, the Commissioner-designate stressed the importance of enforcing agreed trade rules. To this end, an interinstitutional agreement should be rapidly reached on the revision of the ‘enforcement regulation’ to include “services and intellectual property rights”.
Among the Commission departments, the Chief Trade Enforcement Officer will act to enforce trade agreements. “This means removing barriers and protecting our workers, consumers and businesses when our trading partners do not play by the rules”, said Mr Dombrovskis, convinced that EU action will be more systematic in this way.
The Commissioner-designate also called for a strengthening of trade defence tools. He announced a new instrument to deal with State aid from non-Member States, which inhibits free competition within the Union, as well as a new mechanism against coercive measures from non-Member States.
The steel industry is a sector in which the EU is taking action to combat dumping and excessive state subsidies. European defence measures in force until the summer of 2021 have a cumulative value of EUR 20 billion, Mr Dombrovskis noted. In order to avoid retaliation by non-Member States, he called for a specific anti-dumping and anti-subsidy mechanism to be set up in the WTO framework.
WTO. The Commissioner-designate committed himself to an international trading system based on renewed rules. “The World Trade Organization is going through a deep crisis and we need to reform it”, he said.
According to him, this reform depends on the WTO’s ability to settle conflicts “quickly and effectively”, to guarantee a ‘level playing field’, and to pursue sustainable development goals and the fight against climate change.
He also announced that he will launch a trade and climate initiative on goods as well as services within the WTO, with the aim of presenting a concrete proposal at the next Ministerial Council.
United States. Asked by Christophe Hansen (EPP, Luxembourg) about his approach to Washington, the Executive Vice-President promised to spare no effort to rebuild the ties that have been strained since President Trump came to power.
After the November presidential elections, “a new administration would make our job easier”, he said. Nevertheless, if Washington continues to take unilateral action, “we will not hesitate to respond in a proportionate manner”, he said.
On the Airbus/Boeing dispute, the Commissioner-designate advocated a negotiated solution, building on the proposals to this effect already made by the Commission.
On the CETA trade agreement with Canada, Mr Dombrovskis replied to Virginie Joron (ID, France) that no Member State, not even Cyprus, had at this stage indicated its inability to ratify the agreement, which continues to apply provisionally.
China. The European Union is trying to rebalance its strategic relationship with Beijing, as a new bilateral summit has been announced for 16 November in Berlin (see EUROPE 12573/5). Advocating “a partnership that produces results”, the former Latvian Prime Minister called for “a fair and balanced agreement on investment” that includes a chapter on sustainable development and prohibits products made using forced labour from entering the European market.
Finally, when asked by Marek Belka (S&D, Poland) how he planned to manage three full-time jobs, the executive vice-president, who will continue to sit on the Eurogroup and the ECB, said his coordinating role in the Commission will enable him to “integrate trade into a cross-disciplinary approach”.
“Being Commissioner for Trade is really a full-time job!“, committee chair Bernd Lange said at the start of the hearing, expressing concern about Mr Dombrovskis’ day-to-day availability.
On the basis of the recommendations of the competent parliamentary committee, the Conference of Committee Chairs of the European Parliament will assess the results of the hearing and forward its conclusions to the Conference of Presidents (CoP). The Commission will decide on 6 October whether or not to close the hearing. If it is closed, the plenary session will approve the appointment of the Commissioner-designate on 7 October. (Original version in French by Damien Genicot and Mathieu Bion)