A moral obligation. Cautious in the form, Pascal Lamy was very clear and explicit on the substance, hiding neither his inclinations nor choices. I refer to last Wednesday's conference on the delicate and controversial issue of "collective preferences" (the preferences of the collectivity, the choices of society made by the people) in the context of international trade rules (see our bulletin of 17 September, p.9, and this column of 8 September for the preparatory work and the preliminary debates).
Pascal Lamy quite clearly considered it a moral obligation to launch the debate before leaving the European Commission, in order to hand down the results of a preliminary reflection to "those coming after". In fact, he has already suggested a few avenues which he feels may lead to a solution. The thick trade policy dossier: beyond his "professional obligations" which send him round the world on an almost constant basis, global governance is at the heart of the Commissioner's thoughts and concerns In this respect, he is in agreement with Jacques Delors: globalisation and the multilateral system require genuine global governance, based on real powers. The World Trade Organisation (WTO) has some, but restricted to the trade sector, but things other than trade freedom should be taken into consideration.
Three examples. Opening the conference, Mr Lamy rejected outright all attempts to impute a protectionist nature to his ideas (our translation): "I absolutely repudiate the conceptual approach of those who claim that to defend society's choices would be protectionism". He vigorously reaffirmed his support for trade freedom as a factor of growth and employment, adding: "that is why I am interested in things which create friction". Trade liberalisation permanently needs "legitimisation" to prove its benefits. The Conference's base document (which is not an anonymous work by experts, but bears his signature) states: "as beneficial as it is, this opening up will at the same time have destabilising effects on the economic and social fabrics and, potentially, on society's choice's too". Mr Lamy said that putting various "values systems" into contact with each other via international trade has become a reality, but that "trade governance has not been adapted to reality". When trade was less free, the gap was not apparent; today, it appears in full effect, and we note that "collective choices are sometimes compatible with trade liberalisation, sometimes less so. The gradual disappearance of customs duties and quantitative restrictions moves attention onto standards and regulations, which are the reflection of collective preferences". Mr Lamy gave three examples: a) the development of agricultural trade brings the relationship to nature, the environment and food into play; b) the development of trade in services directly affects the regulation of public services (services of general interest) or the relationship to culture, an element of national identity of a population; c) in the industrial sector, to quote but one example, such an anodyne trade as that in electrical batteries brings with it differing conceptions of respect for the environment: some batteries are "bad for the environment"; should the same treatment be reserved for them as for the good ones?
The WTO does its best. Mr Lamy feels it is unfair to accuse the WTO of ignoring this issue completely. Its rules provide possibilities for derogations from trade freedom for reasons of public health, public order, the environment or national security The use of these derogations by governments has sometimes led to conflicts, which have been brought before the WTO's dispute settlement body, and the Commissioner feels that this body has taken the trouble to tread a path between, on the one hand, condemning "derogations" which veil protectionist tendencies, and, on the other, safeguarding legitimate "collective preferences" (the base document analyses the jurisprudence of the WTO appeals body, which has on occasion recognised the legitimacy of environmental concerns, or taken account of health risks, or admitted the principle of precaution). Mr Lamy does, however, admit that his fairly positive opinion of the actions of the WTO's dispute settlement body "is not shared by everyone"; this body's case law has not always been correctly understood and it has often been accused of having given "priority to trade freedom over and above people's choice". There is a need for clarification and explanation in order to avoid evaluations of the WTO's actions being "reserved for a few specialists".
Two paths. It is to this end that Mr Lamy has indicated his two paths, which may not be entirely new, but which he feels could be explored and developed:
1. Identify, explain and confront the existing "collective preferences". It is not a question of establishing a theoretical repertoire, but of taking account of collective choices which have already been made, explaining them and understanding them, and, above all, confronting them. Mr Lamy quoted the example of agriculture: in ten years, he says, international understanding of the European Union's agricultural policy has made considerable headway. Europe has explained to the rest of the world the collective choices underlying its policy (environmental protection, food safety, rural development, animal welfare) and its orientations are better understood today. The clarification also cuts both ways: the Union has concluded from its discussions that export subsidies for agricultural products are not an instrument adapted to its objectives (Mr Lamy, as we know, told the WTO that the EU is ready to give them up, under certain circumstances). The confrontation of society choices would create fora for dialogues helping to anticipate conflicts and plan possible outcomes.
2. Think about a specific safeguard clause. Whilst stressing the need for "formal guarantees" in favour of society's choices, Pascal Lamy defended the idea of a safeguard clause, rejecting the attacks and criticism which the clauses attracted. He feels that they are a "normal and precious [instrument], a less heterodox hypothesis than it may appear", given that in this case, the clause should be subject to conditions, respect parameters and also contain a "compensation system". All depends on the conditions for its use. The Conference's base document (which will be reproduced in our EUROPE/Documents series) contains indications on the controls to be put into place to prevent abuses, on the temporary nature of the protection allowed by the clause and on the compensation mechanism.
Taking the view that it is "imperative to ensure that the opening will not lead legitimate collective choices being called into question", Mr Lamy concluded in these terms: "I know the risks. Proponents of purer and harder liberalism than mine see the door being open to protectionism, some developing countries fear veiled protectionism or a way of maintaining the status quo, to their detriment. I measure the risks of instrumentalising my ideas. I take this risk, as I am convinced that in the absence of a reflection, we will skip over an essential aspect of globalisation".
Insignificant objectives? The floor was then given to other speakers: economists, lawyers, representatives of international organisations or non-governmental organisations. Generally speaking, Mr Lamy had anticipated many of the objections raised, some of which focused on technicalities, although what had been presented was a vision of international trade. André Sapir, Professor of Economics at the University of Brussels, contested the view that society's choices were uniform and universal; differences are often radical, depending on the level of development of countries or groups of countries. According to Marco Bronckers, a lawyer from the University of Leiden, we should avoid imposing our "collective preferences" on others (to which one could reply that Pascal Lamy has never called for this, as his idea was more that we should be able to protects ours), and he took position against the hypothetical safeguard clause. He suggested instead a formula of "revisable derogations", but was always clear that third countries should not have to "pay" the EU to respect its trade commitments. Others who took the floor highlighted the difficulty of drawing up a list of "collective preferences": who should take the work on? Pressure groups?
Overall, the speakers stressed that Mr Lamy's views raise "a long list of questions". To this, the European Commissioner replied that he was aware of this, and that it was for this reason that he was taking the opportunity of this Conference to call upon participants to think about the limits of international integration, in order to preserve the legitimacy and diversity of societies' choices.
The reflection is now officially open. The Barroso Commission will decide in what form it will continue. (F.R.)