Wednesday

28th Jul 2021

Column

Why is new EU trade policy using WTO as a figleaf?

I consider a market the mirror of the morals of a society.

A productive market encourages workers and entrepreneurs to find innovative ways to express these ideals and to fulfil them.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • The new trade strategy of the European Commission is a sterile vision of neoliberalism shrouded in a green haze

Prosperity is about building a better society, preserving freedom to shape your future. A good market is constructed inside-out, from deep morals and identity, over entrepreneurship and guiding policies, to external trade.

The new trade strategy of the European Commission, however, continues to be outside-in. It is a sterile vision of neoliberalism shrouded in a green haze.

The strategy is crafted to defend world trade, rather than the European market. Europe would benefit from an open and fair economic order, but the European Union just represents 15 percent of the global economy.

Its influence is limited, especially as China and the US will not join efforts to salvage institutions like the World Trade Organization, and a whole host of developing countries balks at deep liberalisation.

The European Commission clings to the World Trade Organization like a piece driftwood from a foregone age of globalisation.

But the shipwrecked tries to rescue the driftwood. Meanwhile, other major economies retrench deeper and deeper into economic nationalism. It is not always nationalism of the harsh protectionist kind.

But if China on the one hand proclaims itself the standard bearer of free trade, Chinese officials continue to make plans for independent innovation, self-reliant industrial supply chains, and supporting national champions.

The same goes for the United States. The Biden administration champions open trade and buy-America simultaneously.

While world trade has grown throughout history, this was not a steady process. Periods of opening alternate with periods of closing and this is beyond the control of individual economies.

Economies can act cautiously, but they must act, and never allow the national economic interest of others to interfere with fundamental choices at home.

The European Commission keeps referring to the World Trade Organization to explain that it cannot fully tie internal standards to external trade. Saving the WTO has become a pretext for a standstill.

If various treaties state that the European institutions ought to defend core values, the European Commission has failed to use its competence in trade to that end.

Instead of using its market as a lever for change, it has accepted local European producers to be exposed to fierce competition from countries that do not even want to consider some of our core values.

The countries that enlarged their share in European imports the most, were dictatorships, heavy CO2-emitters, and lax in terms of labour standards. The new trade strategy hardly addresses this.

Competition from forced labour

Human rights and labour standards are mentioned in the strategy, but without much appetite to get tough on them.

Advanced trade agreements could include some social and human rights provisions, but the readiness to enforce them is modest and its unlikely that such advanced trade agreements will be signed with the most important trade partners anyhow.

While producers in Europe need to live up to demanding labour standards, the European Commission does not make the slightest move to protect them against competition from countries that use forced labour on a massive scale.

Another example is climate change mitigation. The strategy is replete with references to the green deal, but only makes one reference to the key instrument to make it possible: carbon border-adjustment.

This tool has by now been entirely diluted to a modest emission rights scheme that will apply to only a few sectors. The Commission suggests that carbon border adjustments be implemented slowly, so that production chains can adjust.

But if they are implemented too slow, the investment needed for Europe's green new deal will continue to go elsewhere.

Some might still retort that trade should just be kept free and that Europe requires economic realism, not ideals. But how can we speak about free trade, when governments in key partner countries manipulate trade?

The only possible vision of economic realism, is a vision that protect European producers against such manipulation, that truly supports the green new deal and works towards open strategic autonomy.

Strategic autonomy is hardly mentioned in the trade strategy.

A senior Commission trade official recently even interpreted open strategic autonomy as the diversification of dependency. Can you get more deceptive?

Author bio

Jonathan Holslag teaches international politics at the Free University of Brussels.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Column

On Biden's China policy

America's legitimacy will ultimately rest in its capacity to get boots on the ground in heavily-contested environments, to undo Chinese surprise campaigns, and not to allow China to do what Russia did in the Crimea.

Column

US economic nationalism will be subtler - but it will persist

The more the US comes to face economic headwinds, because of the corona pandemic, but also because of the stagnating productivity, growing external debt, and an increasingly unbalanced growth model, the more the tendency of economic nationalism will become manifest.

Column

What American decline means for Europe

The decline of the US and the rise of China have immense consequences for Europe. Above all, it means that all member states must be committed to making enormous efforts to close ranks in terms of trade and security.

EU pushes WTO reform and Paris agenda in new trade plan

The bloc's new trade strategy proposes making respect for the 2015 Paris Agreement an "essential element" of future trade agreements. Reform of the World Trade Organization is also a priority for the coming decade.

Column

EU's peddler politics

The sanctions announced against Chinese officials are another example of European peddler politics: offering a little tasting of this and a little of that - without impact.

Brexit: what is the 'Lugano Convention' and does it matter?

After Brexit, the UK ceased to be a member of the Lugano Convention, an international treaty which governs cross-border civil and commercial legal disputes. In May, the European Commission published an opinion calling for the UK's re-application to be rejected.

Column

Does democracy need troublemakers?

Comedians, businessmen and other outsiders – think of Edward Snowden, Slawi Trifonow (the TV star who won the Bulgarian elections recently), or Donald Trump – try to disrupt power, pretending to expose political elites. Why is this happening?

Ukraine - Zelensky's authoritarian turn?

President Volodymyr Zelensky has begun his third year mired in mid-term unpopularity with a poll showing only 21.8 percent of Ukrainians would vote to re-elect him. More than half would prefer him not even to run for a second term.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. EU hits vaccination target, as Delta variant now dominates
  2. European arms 'displaced over a million people', research finds
  3. Brexit: what is the 'Lugano Convention' and does it matter?
  4. US maintains summer travel ban on EU tourists
  5. Does democracy need troublemakers?
  6. Separating migrant families at EU borders must stop
  7. Germany mulls restrictions for unvaccinated as cases soar
  8. 'Prison island' birthplace of EU reborn as think-tank venue

Join EUobserver

Support quality EU news

Join us