Thursday

23rd Nov 2017

EU commission changes gear on trade

  • Katainen (l) and Malmstroem (r) introduced proposals that seek to reinforce EU trade powers (Photo: European Commission)

The European Commission rolled out a proposal Thursday (14 September) to start free trade talks with Australia and New Zealand, and to install an EU investment screening framework.

The EU executive's push to start negotiations with Austria and New Zealand is part of an effort by the bloc to strengthen its position as a leading global trading power, as the US is turning inwards and pursuing an "America first" policy.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"In the current international climate, the world needs leaders in trade. The EU continues to champion free and fair trade. […] Today's proposals show this leadership in a action," trade commissioner Cecilia Malmstroem told reporters.

In an effort to calm increasing criticism over the opaque nature of trade talks, the commission published its proposed negotiating mandate , and at the same time sent them to national parliaments.

Malmstroem called it "unprecedented and unrivalled transparency" in EU trade.

The trade commissioner added that, in being more transparent, they hope to avoid situations like last year with the Canada free trade agreement (Ceta), when Belgium's Wallonia region objected to the deal in the last minute, claiming they were not informed.

Malmstroem emphasised that it is the member states' responsibility to keep their regional parliaments up to date.

The trade commissioner said agreements with Australia and New Zealand could increase exports to the two countries by around a third in the long-term.

The EU's ambitious trade agenda comes as the US is following a more protectionist policy, and the UK is aiming to start its own trade policy as soon as it leaves the EU in 2019.

The commission hopes to close the deals with Australia and New Zealand before the end of the Juncker commissions mandate, and before the UK can close its own deals with the two countries.

The trade deal with Canada will enter into force next week, and talks with Singapore and Vietnam have finished.

In July, the EU also struck a political agreement with Japan and is aiming to conclude talks with Mexico and the Mercosur countries - Argentina, Brazil, Paraguay and Uruguay - before the end of the year.

The commission is also hoping to be able to start talks with Chile "very soon".

Investment courts

The EU executive, however, is not going to pursue an agreement on investment protection with Australia and New Zealand for now, as the commission is in talks with other countries to set up a permanent multilateral investment court system.

"There is an increasing debate that the old ISDS [investor-state dispute settlement] system is flawed," Malmstroem noted, saying there are over 3,000 bilateral ISDS agreements worldwide.

ISDS systems have increasingly been criticised for their bias toward businesses, and for being ad hoc, inefficient, and not transparent.

The multilateral investment court system proposed by the commission would be permanent, more independent - as not only disputing parties but states could appoint permanent judges - and would be more transparent.

The EU executive also published its recommendation for negotiations on the court system.

"We reach out to as many countries as possible to have a multilateral court system that would take over this ISDS," Malmstroem said.

Screening

The commission also announced plans to put in place a framework, which would screen foreign investments in Europe.

But the EU will not be able to block investments.

Decisions on foreign investments would stay with the member states, but there would be an information sharing mechanism to let other EU states and the commission know if there are sensitive investments, or acquisitions that could have an impact on other states.

The EU executive will be able to screen foreign investments likely to affect projects that have received EU money from funds designed for research, space or transportation, energy and telecommunications networks.

Commissioner for jobs and growth Jyrki Katainen, who was speaking at the same press conference as Malmstroem, gave the example of a foreign company buying a short section in a cross-border energy network.

He said the framework will provide a chance to check if that company has bought any more sections in the network, and if it would put the EU into an "unfavourable situation" as it seeks to ensure uninterrupted energy flows.

"We don't want to restrict investments, but we want to be aware, much better than today, what investments are coming in, who invests, and if something raises concerns, it [the framework] allows member states to take the right decision," he told reporters.

Britain is priority

The commissioner said trade talks with Britain are a priority once the first phase of Brexit negotiations are finished.

"As soon as we know when we can start negotiating about the future arrangement, [trade] negotiations will start then. There's no political priority that we want to keep the UK as the last in the queue," Katainen said.

"Keep calm, don't panic," Malmstroem added, saying the commission is able to simultaneously negotiate trade deals.

EU preparing to screen Chinese investments

The EU is to screen foreign investments to avoid takeovers in sensitive sectors. But the plan, mainly aimed at China, will raise political and technical difficulties.

Opinion

Time to beef up EU trade rules

A long-standing conflict between the US and EU on growth hormones for cattle is back, and could put European standards at risk.

Macron puts trade policy on summit table

France's president wants a "political discussion" on EU trade policies at Thursday's summit, amid domestic concerns over Canada and South America deals. But his colleagues are likely to avoid a lengthy debate.

News in Brief

  1. Spain sends migrant arrivals to unfinished prison
  2. Iceland prepares for biggest volcano to blow
  3. Greek parliament postpones debate on Saudi arms deal
  4. Family of murdered Malta journalist to sue police
  5. UK to sell RBS bank stake, boosting government coffers
  6. December euro summit still on, Tusk confirms
  7. EU calls for end to Kenya election crisis
  8. Report: Israeli PM invited to meet EU ministers

Stakeholders' Highlights

  1. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  2. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  3. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  4. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition
  5. European Jewish CongressEJC to French President Macron: We Oppose All Contact With Far-Right & Far-Left
  6. EPSUWith EU Pillar of Social Rights in Place, Time Is Ticking for Commission to Deliver
  7. ILGA EuropeBan on LGBTI Events in Ankara Must Be Overturned
  8. Bio-Based IndustriesBio-Based Industries: European Growth is in Our Nature!
  9. Dialogue PlatformErdogan's Most Vulnerable Victims: Women and Children
  10. UNICEFEuropean Parliament Marks World Children's Day by Launching Dialogue With Children
  11. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  12. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure

Latest News

  1. Germany's Schulz under pressure to enter coalition talks
  2. LuxLeaks trial re-opens debate on whistleblowers' protection
  3. Wilders says Russia is 'no enemy' ahead of Moscow visit
  4. EU must put Sudan under microscope at Africa summit
  5. Mali blames West for chaos in Libya
  6. Orban stokes up his voters with anti-Soros 'consultation'
  7. Commission warns Italy over high debt level
  8. Mladic found guilty for Bosnia genocide and war crimes

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic countries prioritise fossil fuel subsidy reform
  2. Mission of China to the EUNew era for China brings new opportunities to all
  3. ACCASmall and Medium Sized Practices Must 'Offer the Whole Package'
  4. UNICEFAhead of the African Union - EU Summit, Survey Highlights Impact of Conflict on Education
  5. Nordic Council of MinistersNordic Council Calls for Closer Co-Operation on Foreign Policy
  6. Swedish EnterprisesTrilogue Negotiations - Striking the Balance Between Transparency and Efficiency
  7. Access EuropeProspects for US-EU Relations Under the Trump Administration - 28 November 2017
  8. Nordic Council of MinistersSustainable Growth the Nordic Way: Climate Solutions for a Sustainable Future
  9. EU2017EEHow Data Fuels Estonia's Economy
  10. Mission of China to the EUChina and EU Step Up Water Management Cooperation
  11. CECEMachinery Industry Calls for Joint EU Approach to Develop Digital Construction Sector
  12. EnelNo ETS Deal Means It Can Still Be Strengthened