Review abandoned. In the context of reflections on EU trade policy (see this column yesterday and the day before yesterday), controversy surrounding the trade defence instruments review had, on the face of it, a technical nature: to amend a few regulatory provisions and a few aspects of the “guidelines” followed by the European Commission in the examination of these dossiers. The debate in fact was of a completely different scale and incorporated the nature of industrial activity in the EU. According to one school of thought, which had a certain amount of success in a few member states, as well as the backing of certain economists, Europe should, in the face of competition from countries with significantly lower production costs, abandon (in the context of unbridled globalisation) the manufacture of consumer goods and only maintain the top-end of industrial activity: research, product conceptualisation, innovation, marketing, management of financial flows. This would, according to this thesis, be an intelligent application of globalisation. In my opinion, it would be an “intelligent application” of the economic interests of companies that have significantly relocated their businesses (or intend to), as well as those of big business.
The debate was very lively, involving most member states, several parliamentary committees, business leaders (but unusually their association, BusinessEurope, did not manage to define a position on the question) and trade unions. The European Commission was at the centre of the reflection because it is the Commission that will possibly propose a review of trade defence instruments and define the notion of European interest, a fusion of the interests involved (industry, trade, workers, consumers). The decision not to follow up Peter Mandelson's proposed review, clearly indicates the results of the Commission reflection.
No basis for hypothesis. In the same way as yesterday, when I drew on a speech from the president of the Commission to examine counterfeiting and the subsequent risks, I will now look at the “point of view” of one of the vice presidents, Jacques Barrot, published on 10 March, in an effort to summarise the arguments affirming the importance of manufacturing industry in Europe.
Mr Barrot tore apart the hypothesis of a Europe, “free from having to produce, and dedicated to product conceptualisation…Industrial production is the extension of technological creativity. It is impossible to preserve know-how in a sustainable way if it is not anchored in a unit of production”. Preserving trades and the capacity for manufacturing goods, is indispensable: “remaining attractive, is to continue to manufacture quality products domestically and make them available to quality-aware consumers…The capacity for innovation is inseparable from Europe's industrial tradition”. Mr Barrot also highlighted “the indispensable synergy between universities, research centres and companies…Its industrial base and spirit of innovation makes Europe strong. It possesses all the advantages to loyally play a role in the industries of the future: biotechnology, new communication technologies, new energies, and space etc”.
Competition, however, should be fair and trade rules respected. In the meantime, “global governance remains to be built and Europe must remain firm on the issue of fair competition between countries, each of them strong through their respective advantages. Dumping still has to be fought, whether this involves a company from a third country or a European firm that has relocated to a third country. As well as the purely trade related aspects, the stakes involve jobs, know-how and the capacity for innovation etc.
Rejection of protectionism. The Commission's decision not to propose a review of trade defence instruments was definitively unanimous. Günter Verheugen, another vice president, had also previously vigorously affirmed the role of manufacturing industry. The Commission, however, at the same time, expressed its determination to oppose any kind of protectionism and continue to work on a bigger opening up of the world markets, including the European market, based on reciprocity and respect for rules of fair trade. Certainly, the aspects mentioned in yesterday's column (counterfeiting) and today's (relocations and trade defence instruments) can be used for protectionist ends and to protect one's own backyard. The EU has to think about balance: free trade and respect for rules are two sides of the same coin.
Tomorrow I will be drawing some provisional conclusions from the ongoing reflection.
(F.R.)