Let's have a look at Mr Mandelson's initiatives to update EU trade policy so that it takes into account the radical transformations that have occurred in world trade.
First two stages. The first stage was the denunciation of the real scale of counterfeiting and piracy by destroying the artisanal and almost sympathetic image this phenomenon has and which in some of the public's mind focuses on perfumes, watches, women's handbags and other luxury products. The reality is far more dramatic because pirates copy everything, trick purchasers and rob the real creators. They can provoke horrendous situations when medicines, spare plane parts or phytosanitary products are counterfeited. Organised crime has made trade piracy is main action area because it noticed that profits are even higher in this domain than in trafficking in drugs or human beings. Theoretically, this battle appears to have been won. But a lot more determination is needed to concretely eliminate behaviour that is poisoning world trade, attracting international criminality and undermining merit and legitimate business.
The second stage was the definition of the “new generation” of free trade agreements which will no longer be exclusively based on free movement of goods. The opening up of the borders is expected to cover the main economic activities (investment, services, public procurement etc.) and will be subject to meeting environmental standards, norms governing safety, the quality of the products themselves and in some cases, social standards. The Council shared the Commission's orientations and will soon be speaking about the opening of negotiations in this connection with India, ASEAN and South Korea, as well as on the insertion of new orientations in the association agreements planned with Central America, and the Andean Community, when it is actually able to undertake genuine negotiations with it.
The third stage has begun. The third stage has just begun with the organisation of a wide-ranging consultation by the Commission on trade defence instruments (summed up by Emanuel Hagry in EUROPE 9322). The Commission explains that it is not challenging the cause, principles or aims of these instruments but that it wants to adapt how they work and are used, to take into account the profound changes that have occurred in the field of international trade. The most controversial recent case (antidumping duties on Chinese and Vietnamese shoes) highlighted a double fracture in the EU between producer and importer Member States on the one hand and between consumer organisations and bodies representing manufacturers on the other.
This double fracture reflects the different interests and the conflict of objective interests. The Commission took this on board and the Council achieved a compromise that does its best to respect the balance. The problem is how the “Community interest” can best be define, and what would trigger defence measures. The Green Paper underlined to what point the new production methods have complicated the situation; a number of European companies' manufacturing of products (or parts of these products) for the Union market is done abroad, while they still maintain some of their business activities in Europe and the jobs that go with them. Transporters and traders also contribute to job creation in the Union and we should not ignore consumers' interests. Criteria of the lowest price should not constitute the absolute criteria for intervention, as European producers have to be efficient and the spur to be competitive is indispensable. If a trade defence measure is decided on, the existence of illegal behaviour by the exporter (state aid, discrimination, unfair trade) has to be proved and procedures have to be transparent.
The stakes are enormous: fair protection of European industry, correct relations with third countries, respect for international rules. Consultation will take up much of next year and the Commission will present legislative proposals before the end of 2007.
Understandable reactions and a few excessive fears. Peter Mandelson's orientations have logically raised a significant number of reactions in the different political, economic and social communities.
John Monks, Secretary General of the ETUC (European Trade Union Confederation) is afraid that emphasis by the Commission on the demand for competitiveness of European companies could increase pressure from entrepreneurs on aspects they describe as being “penalising”: high wages, tough environmental and social standards etc.
This warning by Mr Monks is logical, as well as the reaction from Francis Wurtz, president of the United Left group (GUE/NGL) at the European Parliament, indicating that he shares these concerns. He announced that he has asked the president of the European Parliament and president of the political groups to quickly organise a debate on the Commission's new trade policy and its impact on the Union's internal policies.
In fact, the Commission is, above all, putting emphasis on the demand that third countries respect social and environmental standards that are the same as the Union's. It calls for a level to be set on rules at an international level and no lowering of European rules (which it is attempting to strengthen, despite the wariness of some business interests). Mr Mandelson has overtly indicated that he considers it more important to establish rules for all rather than amend European rules. It is perhaps the Commission's “A Competitive Europe in a Globalised Economy” (see No. 2499-2450 in our EUROPE/Documents series) which undermines his position.
Other parliamentarians reacted completely differently, criticising Mr Mandelson for excessive protectionism. For example, Syed Kamall, the British Conservative, considers these trade measures as being dangerous to consumers, bad for distributors and ineffective in saving jobs, and criticises the EU for excessive use of them in “hitting China”. Mandelson's document provided a figure up front: the EU applies trade defence measures on 0.5% of its imports. It is also well known that the EU is the biggest importer in the world overall, particularly for imports from less developed countries.
Initial reactions from UNICE (representing industry) and Eurocommerce are mainly concerned with the way in which the principles mentioned will be implemented: foreseeable nature of the import conditions, legal certainty, transparency, necessity for large emerging countries (China, India, Brazil) to also respect the basic rules. These reactions will all be explained in the “consultation”.
Strange reactions from those who claim they are “Friends of the Earth”. I can't hide my astonishment at some of the reactions, especially some of those from Non Governmental Organisations (NGOs), which create the impression that they are defending interests that are very far from those indicated in their social remits. A press release from “Friends of the Earth” denounced the initiatives of Mr Mandelson as “pursuing business-friendly reforms…at the expense of people and the environment”. If in fact something is clear about these initiatives, it is the clarity with which we can see the desire to extend environmental protection standards (forests in particular), as well as those involving animal welfare, the socially disadvantaged and children, to other continents and other countries. An organisation that defines itself as being “Friends of the Earth” should be pleased about it.
On the contrary, Friends of the Earth Trade Campaigner Charly Poppe accuses Europe of wanting to guarantee control by its companies of the natural resources of poor countries and seeking to reduce the freedom of governments in these countries to orientate their own trade policies. He criticises the European Commission for calling for consultations before a third country has applied restrictive measures and of wanting to introduce mechanisms for solving disputes that “influence future environmental, social and health policies in its trading partners”. The direction the Commission's orientation is going in is clear: those who want to conclude free trade agreements (FTA) with the EU have to respect certain environmental, social and trade standards, without which there cannot be fair free trade. Countries or groups of countries explicitly mentioned (South Korea, ASEAN countries, India) are very competitive and are in some cases very industrialised and commercially successful (South Korea but not just this country). Less developed countries, the EU is still offering special conditions and is fighting for them to be granted trade preferences.
Do “Friends of the Earth” intend to line up with all the other well known NGOs who systematically oppose any attempt to make world trade fairer? I believe that it is inconceivable that the so-called “Friends of the Earth” take a position against attempts to extend the application of minimum environmental and social standards, to the advantage of big business and the multinationals. Peter Mandelson, who initially gave the impression of being an adept of unbridled free trade (implying the renunciation of trade preferences for less advantaged countries) appears to have evolved in the direction of a better controlled globalisation and generalised environmental and social rules. We should be pleased about this and encourage him in this direction.
(FR)