The new trade strategy presented by Peter Mandelson in the press room on Wednesday raises quite a few questions. Mr Mandelson was clever enough to present it to journalists, and therefore to the public, as the second strand of the Lisbon Strategy. The first deals with the internal competitiveness of the Union, this one deals with external competitiveness, with the aim of each being economic growth and employment. Who could question such an aim? The advantages for Europe would be threefold: a) the opening of non-EU markets to European products, with a substantial degree of “legal security”; b) the inclusion, in the bilateral negotiations announced, of points which are not yet ready for multilateral negotiation, but which are of great importance to Europe (protection of intellectual property, public markets, non-tariff barriers, investment, etc.); c) the opening of Europe's borders to low cost products, to the benefit of consumers. All this while at the same time protecting the environment and maintaining preferential treatment for the poorest countries.
How can reservations be expressed about a programme which, at first sight, is so attractive and full of advantages? I will restrict myself to asking a few questions.
1. How can trade preferences granted to the least well off countries be reconciled with the extending free trade to most third countries? According to the paper, the geographic priorities for the free trade areas envisaged are a) firstly Mercosur, ASEAN and South Korea, because negotiations have already been opened with these groups of countries; b) then India and Russia, promising major markets, and the relaunch of negotiations with the Gulf states, which have been on-going for a long time but currently deadlocked (not to mention Mexico and the Andean countries, with which free trade already exists or is being prepared.
The removal of customs duties and other trade restrictions (implicit in free trade areas, with exemptions rigorously limited by WTO rules) leads in practice to the virtually unlimited geographical extension of the benefits currently reserved for ACP states and other less well-off countries. These countries are not able to meet the competition of giants like Brazil India and some other Asian countries. This has already been noted for sugar and bananas (where the EU had to reduce its preferences) and with regard to China (the removal of quantitative restrictions, without removing customs duties, led to crisis among many usual EU market suppliers, particularly in textiles). Increasing the number of free trade areas will lead to the virtual disappearance of preferences for ACP and other very poor countries.
2. Why would Brazil and other emerging countries agree to things bilaterally that they rejected on a multilaterally? Mr Mandelson says that bilateral negotiations would also deal with issues that are deadlocked or that are not covered in the Doha Round, because the time is not ripe for multilateral negotiation on these issues. But is precisely Brazil and other emerging countries which have rejected the liberalisation of investments, services, public markets etc. Why would they be more flexible in bilateral negotiations, unless to ask in exchange for full opening of European borders in the agriculture area, something the EU rightly rejected in the Doha Round?
3. Is the creation of a common economic area with the United States to be envisaged? The paper is cautious on this point, speaking only of giving fresh impetus to the Transatlantic Economic Initiative, which is seeking to eliminate non-tariff trade barriers. Mr Mandelson has clearly said, however, that he backs the line attributed to German Chancellor Angela Merkel, seeking a common economic area. It's a line that brings back bad memories.
4. Why were only Mr Verheugen and Mr McCreevy associated with drawing up the paper? How can it be possible for the Commissioners responsible for external relations, Ms Benita Ferrero-Waldner, agriculture, Ms Mariann Fischer Boel, and relations with ACP and other developing countries, Mr Louis Michel, not to have been associated? Disagreement over certain points or lack of interest?
Beyond these limited questions, I will, at the start of next week, return to the general tendency and political significance of this paper.
(F.R.)