In our second #CambreTalksTrade event moderated by the FT’s senior trade writer Alan Beattie, we unpacked the EU’s new trade strategy with Ignacio García Bercero, Director for Trade Strategy at the European Commission; Iuliu Winkler MEP, Vice-Chair of the European Parliament’s Committee on International Trade; Susan Danger, CEO of the American Chamber of Commerce to the EU; and Léa Auffret, Trade Team Leader at the European Consumer Organisation (BEUC).
The EU speaks up
Almost six years have passed since the EU launched its ‘Trade for All’ strategy, a time before COVID-19, Donald Trump’s presidency, Brexit, heightened awareness of climate change and growing geopolitical conflicts. Amidst these challenges, the EU could not take a back seat, so it is sharpening its tools to push back against unilateralism with an assertive stance. According to the panellists, the EU’s trade agenda rightly focuses on:
- Working with like-minded partners to reform the World Trade Organization (WTO), to make global trade rules that are fit for the 21st century – for instance on eCommerce.
- Aligning trade policy with the EU’s internal agenda for the green and digital transformations. Trade policy cannot solve all problems, but it can support a sustainable recovery and help the EU to prepare for an ever more digital and interconnected world.
- Enforcing all the bilateral trade deals that the EU has concluded in the last 6 years, including all safeguards and tools to impose European standards abroad.
Only one thing really missing in the trade strategy perhaps: Amidst a global economic recession caused by the Covid-19 crisis, the strategy may have had an extra eye for European consumers, workers and creating jobs – one may argue that’s all a given since “Trade for all”, but is that enough for the post pandemic world?
Open, but realistic
The speakers welcomed the EU’s commitment to openness but have also called attention to the new reality of the 21st century. There is no interest from stakeholders and officials to decouple from other major countries, as globalisation has created more interdependence than ever, and protectionist temptations can be tamed. But there is a need to modernise the rules of economic interaction and level the playing field between market and non-market economies.
Changing the course of transatlantic relations with the new US administration is a key opportunity for this, and business groups are seeing positive signs, such as the Biden administration re-joining the Paris Agreement and the World Health Organization (WHO). The proposed Transatlantic Trade and Technology Council is a welcomed step to rekindle relations, but NGOs stressed the need for transparency in this regard.
The EU is also ready to strike back if needed. Autonomous measures to address security concerns and unfair trade practices are another key feature of the strategy. The EU has just modernised its foreign direct investment screening mechanism, updated its framework on export controls and is looking into a new anti-coercive instrument to respond to economic threats aiming to change EU policy. Using all the bandwidth of international legality, Brussels is ready to show some teeth.
More sustainable than ever
According to the Commission, the current trade policy review is the greenest strategy ever published. Similarly, sustainability is now the political centre of gravity in the European Parliament. Everyone agrees that the EU’s Green Deal should be a major focus of the post-pandemic economic recovery. Competitiveness will also be a major focus in this regard. Pairing environmental issues with innovation could help to promote green jobs in Europe, especially for young people. Business is also keen to invest more in green technologies, which could provide a competitive advantage for the EU.
To make all of this happen, the EU needs to be more active in the communication battlefield, presenting a positive narrative for trade. Policies without public support can create unexpected backlashes. It is important to hear more from the “winners” of trade agreements, so the European public can see how international trade benefits their daily lives – and to win the hearts and minds of Europeans, the Commission reaffirmed its commitment to promote transparency and engage with stakeholders in the formulation of trade policy.