Vigilance is not protectionism. Inside the EU, protectionism is absurd and freedom of trade is not at risk (see this column in yesterday's edition). The global situation is, however, different; not because a return to protectionism would be justified, but insofar as the rules of fair trade must absolutely be spelled out and have to be applied. In principle, there are already rules and the World Trade Organisation (WTO) monitors how they are applied. On the ground, however, things are not quite as simple. The scale of fraud, counterfeiting, and infringements of intellectual property is, in some instances, mind-boggling, and it is tolerated to far too great an extent, with consequences that are not only economic, but also very often affect health, security, and Nature.
Vigilance does not mean protectionism: it responds to the need to safeguard fairness of trade and to protect health, security and the environment. But these objectives must not be allowed to become justifications for restrictions. Moreover, an image of a world which denies freedom of trade does not correspond to reality. The way most trade takes place is satisfactory.
Clear overview. The EU, in particular, is anything but a bastion of protectionism. Other European countries, such as Norway and Switzerland are, in practice, members of the common market and Turkey along with the EU is in a customs union that works well. There are no problems, other than transitory, with Japan, Canada or Australia. Discussions with South Korea are not on the current system but on progress towards reciprocal free trade (the European car industry is calling for reciprocity on respective market access). In relations with the southern rim of the Mediterranean and with regional Latin American groups, the EU set itself the wrong target: it is just not possible to create free trade areas with countries which continue to erect trade barriers between themselves and which, in some cases, close their borders or even maintain conflicts. Reasonable aims are, however, gradually being achieved (Mexico, Morocco, etc).
Euro-American trade certainly not in danger. Trade relations between the EU and the United States provide the world's main trade flow. Differences, often artificially exaggerated, mainly reflect specific interests, justifiable but not major in the global context. Fortunately there is no longer any talk of a Euro-American free trade area, an unrealistic objective. The obstacle is not economic or technical, but essentially political: it is unthinkable to contemplate joint supranational governance, responsible for monitoring observance of rules and with powers of intervention and decision, such as exists in the EU. The US Senate would never give up its trade powers; and neither side is prepared to give up its independence in areas which have implications for health and cultural roots - genetically modified organisms (GMOs), hormone-injected meat, etc. The controversial issues sometimes create a lot of stink, but their real scale is insignificant when compared to the amount of trade - though, perfectly logically, those sectors that are directly affected (the latest cases are Roquefort cheese from France and mineral waters from Italy) make a bit of a noise because, for them, the US market is important.
The two sides often clash at the WTO, but no real damage has been done to trade expansion. Quarrels such as the one over subsidies to the aeronautical industry have been going on for years; we have got used to them. If, perchance, a clear case of protectionism develops, we slip into reverse gear. Last week, the new US president announced the review of the economic recovery plan standard which would require American steel to be used in publicly funded infrastructure construction. European Trade Commissioner Catherine Ashton will shortly travel to Washington for discussions on future prospects and issues already opened. Not all differences will be removed (some will go on for a long time yet: aid for Airbus and subsidies enjoyed by Boeing, hormone injected beef, chlorine treated chicken, etc) but clarification will be brought, and there is the possibility of arbitration in Geneva. Euro-American trade relations are certainly not at risk, even if the US must necessarily reduce its trade deficit.
Where, then, are the risks of European protectionism that a section of the British press has condemned and the Chinese authorities say they fear? This column will consider the matter tomorrow.
(F.R./transl.rt)