Russia, Brazil, tomorrow (we hope) China: has the European Union really got a reasonable concept of economic and trade relations, in line with its interests in the medium and longer terms? Certain recent developments give us hope, be it the breathing space in negotiations with Mercosur, the contents and details of the agreement in principle between the EU and Russia on the four “common areas” or the global nature of recent high-level talks with China.
For an agreement with Mercosur without free trade. On Brazil, I do not feel that the information provided last week to the European Parliament by Commissioner Viviane Reding (see our bulletin 8944) was negative. On the contrary, I feel that the reluctance to go further down the road of free trade is something of a return to sanity. Brazil can't open up virtually all of its borders to industrial products from the Union, or give up its safeguards in terms of services, public procurement etc, and the EU absolutely must ensure that there are extremely strict measures in place to accompany the opening up of its market to Brazilian agricultural products (and Argentinean ones, for that matter). Free trade is a concept which can only work between countries which observe the same environmental, social and trade rules. Certainly, expanding trade is always a desirable objective, but in the absence of common rules, which are being stuck to, it can become a negative thing, and it is almost always ruinous for the poorest countries in the world, which remain excluded from the large blocks of countries thus created. As negotiations stand at the moment, Mercosur does not feel able to present the EU with offers which will really open things up in terms of public procurement, intellectual property rights, services, protection of European geographical indications etc. The EU, for its part, has already offered too much on agriculture and cannot go any further. Under these circumstances, the wisest thing to do- as I have been saying for quite some time- is to reduce the level of ambitions, to forget the free-trade objective and negotiate a realistic agreement aiming to exploit the enormous potential of cooperation and even developing existing trade, to the benefit of both parties and not just traders or large-scale farmers. The EU's external relations and trade policies must be shaped by political decision-makers, including MEPs, and not Oxfam slogans or the slogans of any other similar organisation.
In Russia, “directed capitalism”. On Russia, I have nothing to add to what I wrote in this column yesterday, other than to underline the recent statements of the Russian Deputy Prime Minister with responsibility for industry and energy, Victor Khristenko, describing his policy which a newspaper referred to as “directed capitalism”. For gas and oil, licences to run strategic fields are granted only to companies which are at least 51% state-owned; foreign investment in extraction, particularly in prospecting for new fields, will be encouraged. On trade matters, Russia “will not sacrifice entire swathes of strategic industrial sectors on the altar of free trade”: sectors such as aeronautics, even though this complicates negotiations for its accession to the World Trade Organisation (WTO). In automotives, Mr Khristenko's aim is to promote internal production and, to this effect, keeps taxes high on imported vehicles, whilst liberalising the import of spare parts (which are still indispensable for quality car production) and the establishment of foreign car builders, with their capital and technology. In agriculture, in practice (and I'm simplifying somewhat), imports must be in line with needs. These are guidelines which visibly open doors to cooperation and investment (and the EU will be able to negotiate appropriate conditions and guarantees for its investors), but which certainly do not go towards free trade.
Global negotiations with China. On China, the meeting in Beijing between the Union troika and the Chinese authorities focused on all aspects: arms exports, human rights, trade relations, textiles dossier, etc. This is what I felt was needed for EU to be able to protect its interests. Commissioner Peter Mandelson said that the stakes were too high in EU-Chinese relations to allow the textile issue to compromise the partnership, thus justifying his caution with the safeguard measures. The reasoning has much to gain, in my view, from being reversed: this partnership is so important that the Chinese must not compromise it with an aggressive export policy which is ruinous not only to Europe, but also, and most of all, to all poor countries of supply. And prudence for the future.
(F.R.)