Friday

22nd Jun 2018

EU to Trump: Protectionism is 'doomed to fail'

  • Commissioner Malmstrom said only an open Europe can be successful

The EU’s trade commissioner has said that new efforts to reimpose trade barriers were "doomed to fail" in reaction to Donald Trump’s U-turn on an Asian deal.

Cecilia Malmstroem, who spoke at a think tank in Brussels on Tuesday (25 January), also said that a world without free trade would be “little short of catastrophic”.

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  • US president threw out TPP on Monday (Photo: Gage Skidmore)

US president Trump on Monday withdrew from the TPP agreement, a free-trade deal between 11 Pacific region nations.

His decision, as well as his verbal attacks on globalisation, indicated that an EU-US free-trade pact, TTIP, already three-years in the making, would be put on hold, Malmstroem said at the Bruegel Institute think tank.

“The election of Donald Trump seems likely to put our EU-US negotiations firmly in the freezer for at least for a while”, she said.

She said that the EU was pressing ahead in talks on free-trade pacts with some 20 other countries despite the US developments.

"Trump or no Trump, we have a long list of many others willing to deal with the EU,” she said.

Malmstroem also defended the political benefits of free trade in the face of mounting populism in EU states.

"We work together, trade together, and have all seen the benefit from it. The alternative is little short of catastrophic,” she said.

"Those who, in the 21st century, think that we can become great again by rebuilding borders, reimposing trade barriers, restricting people's freedom to move, are doomed to fail," the Swedish politician added.

She said the success of the EU depended on open societies and open economies.

"We have all seen a Europe divided, separated by walls and borders in the 20th century. Those dark years should not return," she said.

Genuine concerns

EU trade policy, in the past the domain of commission wonks, has attracted popular anger at its impact on jobs and social and environmental standards.

Malmstroem acknowledged that anti-globalisation movements had legitimate concerns.

The commissioner said some people might feel that technology and trade-driven globalisation were moving fast. She said many jobs were being replaced by computers due to automatisation.

But she said EU trade policy had become a “handy scapegoat” for national politicians to deflect attention from deeper problems.

She also said that earlier generations had had had to adapt to change.

She defended recent EU trade deals, saying the negotiation process had become more transparent and that it did not lead to any lowering of European regulatory standards.

Ceta

One bogeyman of anti-free trade groups were international settlement courts were corporations could challenge national authorities’ decisions, but Malmstroem said that an EU-Canada trade pact, Ceta, had a new-model court that was "transparent and predictable".

She recalled that 31 million European jobs depend on exports and that millions of others stemmed from foreign investments in the EU.

The Ceta deal nearly fell by the wayside when it was challenged by Belgium's Walloon region last year.

The mess, which was fixed in the 11th hour, was an embarrassment for the EU on the international stage.

Malmsotroem said the Ceta crisis had come about because national politicians were doing too little to promote free trade at home.

Ceta was given a green light Tuesday in the European Parliament's trade committee, paving the way for it to be ratified in plenary in February.

It will enter into life on a provisional basis, pending full ratification at national level by all 28 EU states.

EU countries agree to reinforce trade defence

After two years of stalled talks, member states decided to keep the current rules on tariffs but to suspend them in case of “state-induced” distortions in raw material and energy.

Opinion

EU dumping plan could ensure fairer China trade

A European Commission proposal on anti-dumping clears the way for the EU to abide by international obligations and avoid a trade war that would be dangerously counterproductive.

EU ready to challenge US border tax

The EU is willing to fight any attempt by the Trump administration to impose border tax on imports, says jobs commissioner Jyrki Katainen.

UK turns from EU to US in 'new age'

British PM to tell US that the two countries should upgrade their “special relationship” amid plans for early talks on a post-EU trade pact.

Analysis

Greece facing post-bailout challenges

Creditors are expected to agree Thursday on a final loan and debt relief measures for Greece. After eight years on an international lifeline, the country will remain under close surveillance - but will have to find a new economic model.

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