Pascal Lamy has won an unprecedented gamble: achieve unanimity, or nearly, in Europe around the guidelines he is publishing on EU trade policy. By sweeping away the legend of "fortress Europe", he was able to emphasis - by basing himself on the work of his predecessors and in close cooperation with Mr Fischler for agriculture - a balanced vision, from which to preach opening to those who even hate the word globalisation and smear the WTO (it is fashionable) than to define the conditions to which this opening is achievable. Thus, for the first time, the EU has a global and coherent doctrine for his trade policy, by giving these terms a wider nature which encompasses the economic aspects of relations with the outside world.
The EU remains at the forefront to favour a new round of international trade negotiations. Though it is not a question for it to simply foresee the future opening of markets, the aim is to introduce at the same time the main rules and standards of behaviour that are presently lacking, so as to discipline international trade with environmental, social and competition provisions. It is clearly indicated in the positions presented by the European Commission in Geneva on behalf of the EU, as well as in the statements made by Mr Lamy here and throughout the world. For those who are distracted let us recall these positions and statements.
The role (and the necessary reform) of the WTO. Last winter, Pascal Lamy had called upon the university professors who are Jean Monnet chairs to consider the functioning of the WTO and of its "panels" and more generally the legitimacy of this organisation's powers (see EUROPE of 13 November 1999). It does not seem that he received many answers, and in the press room he modestly asserted not having yet finished his reflection on this issue. In fact, already last 27 June, he had underlined before the World Bank body "the need for the States not to abdicate from their responsibilities to create law, notably in the new field of the environment, competition and food safety", by explaining: "failing this, the international order would be left to the only with incarnated jurisprudential construction - in the commercial field - through the dispute settlement body. The path of legislation and the path of jurisprudence may develop at the same time up to a certain point, but a synthesis through codified law is needed at this time".
The WTO dispute settlement panel and bodies decide what is illicit and what is not in fields that affect the environment, food safety, the social field and competition, basing themselves on the only standards of international trade. Europe has paid the costs in the cases of hormone meat (which it is forced to import even if outlawed it for its own farmers and if public opinion does not want it) and in other cases; the Americans have had to on their side open their borders to tuna fished without precautions taken for the dolphins. Theses are only examples. A penal of three experts who know by heart the WTO rules in fact prevent the State from legislating (even if they do so in a non-discriminating manner) in the main fields. At least there is food for thought.
These considerations have no relationship with the extreme attitudes of those who discover the existence of rules in international trade and of a body which manages them, and makes this body responsible for all the problems by calling for its suppression. In reality, the rules are necessary in the interest of all, for Europe itself and even more so for developing countries. The new round of world negotiations must not be postponed sine die, but paired with the taking into consideration of all the other aspects cited above. Before the World Bank, Mr Lamy said: "Their does not exist a miracle solution that enables to isolate a trade negotiation to a few theme without taking into account the other subjects, such as competition or the environment", and he reiterated the proposal to create "a joint study platform between the International Labour Organisation and the WTO on the issue of fundamental work standards, organised in a negotiate fashion in the framework of the new round of trade negotiations".
The conditions for the negotiations in the agricultural sector. The documents presented by the Commission on behalf of the EU, at the end of June during the opening of the present agricultural negotiations, assert in an explicit manner the conditions for an additional opening of border in the agricultural sector. It is necessary to recognise the right to maintain agricultural subsidies that correspond to the requirements of civil society. Free trade must not block the efforts made to improve the welfare of animals by ending the shameful way humanity has treated and continues to treat other living beings (the European document underlines that this mainly concerns the rearing intensive and industrialised methods in the rich countries, European included). The quality of food is on the same level and notably implies the fight against the usurping of the certification of foodstuffs and the introduction of rigorous rules in terms of labelling,. Furthermore, certain direct aid linked to production must remain legal. See, for detail, the simple summary of the three Commission documents in of bulletin of last 1st July.
A fourth document, on export subsidies, was presented last week, and confirms the EU readiness to reduce its own, on condition that the other exporting countries do the same for theirs (see EUROPE of 20 September, pages 9/10). The analysis of practices by those who deplore the EU behaviour is educational, especially for one aspect: the American use of food aid not to fight hunger in the world, but to conquer new markets.
The thesis of these documents are not new, if not for the abundance and the quality of the arguments (Mr Fischler's services have a hand in it as much as those of Mr Lamy). What is new; is that the conclusions to which had reached, in principal, the Agriculture Council are now firmed up in the EU's positions as a whole, instead on remaining confined in this Council under the nearly indifferent eye of the General Affairs Council.
Difficult competition. The inclusion in the WTO of environmental and social rules in principal seem achieved, even if the mistrust of developing countries and other major agricultural exporters is far from being appeased; they fear, we know, that the main principals put forward by the rich countries do not hide a new form of protectionism: big words for a more sordid reality. The limits and working methods of the new provisions thus remain to be negotiated, but it is necessary for a new round to be able to open without these points being included in the agenda.
It is not yet the same case for competition rules. Mr Lamy cites them among the unavoidable issues of the new cycle. Though the rest of the world has not necessarily the same view of competition than the West. What is a crime with you is not necessarily the case elsewhere. The European Commission had already presented in 1998 the draft of a multilateral agreement on competition regulations applicable to trade. Karel van Miert personally went to Geneva to propose for the negotiations to open in 1999. According to his draft, each WTO country should provide itself with standards on agreements, the abuses of dominant positions and mergers, by banning price fixing agreements, market sharing and export cartels. This year, Mario Monti and Pascal Lamy re-launched the draft. The United States have reacted with a counter draft aiming to create a world competition authority separate from the WTO (who could still participate, with other bodies, in the preparatory work). The world authority would not, according the Americans, have any decision-making powers, but would function according to the OECD model, with the ability to send back individual cases before the national authorities of the countries concerned.
We are still very far, we can see it, from a uniform plan. For the moment, the most important is summarised b the concept that Pascal Lamy thus summarised: "it is not a case of equitable free trade without surveillance of competition".
How to convince the developing countries? Mr Lamy feels that his main task is to convince the developing countries that the new round of negotiations, with all that it implies, is in their interest. This is why he made himself the preacher of this good cause, from one continent to another, and he managed to convince the Commission (some grinding of teeth) to propose that all the products from the least developed countries benefit from free and unlimited access to the European market without environmental or social conditions and especially with a possibility accumulation of origin. This last aspect is so delicate and threatening for the hyper sensitive products (rice, bananas, sugar) that the Council and Parliament will have to carefully assess the possible consequences and meaning, before giving their assent. This we will have the opportunity to discuss this in more detail in this section.
Let us remain for the moment in the basic principal of the EU position, that Pascal Lamy had summarised thus last June in Durban, before the World Economic Forum: "globalisation of markets must be balanced by global governance".
Ferdinando Riccardi