Nedan följer ett tal som jag höll vid EIN-Summer University i Budapest 17 september.
However, the difficult economic situation in the US, concerns about a potential “overheating” of China’s economy, the debt crisis in the Eurozone and a number of other serious issues overshadow the prospects for global trade.
In this situation, a clear signal for boosting trade is vital. Unfortunately, the Doha agenda will not produce such a signal in 2010 since the G20 just dismissed the intention to come to an early breakthrough. Almost nine years of negotiations have not produced fruitful results yet. Undeniably, all parties concerned still feel the need for a considerable reduction of trade barriers. Willingness to compromise will grow in the course of the further economic development which seems anything but stable. The overall desire to boost economic growth by accelerating global trade will sooner or later produce a result. Doha is definitely not dead.
However, in the face of the stalemate for Doha, the EU and other global players have to cope with the status quo. From this follows the political imperative to bridge the deficits of global trade as well as possible. The most promising alternative is to develop further bilateral trade agreements. All heavy weights in global trade take that route.
This policy may provide solutions but it also contains serious perils. There is also no guarantee that bilateral negotiations produce quicker and more tangible results than multilateral trade negotiations. The comprehensive economic and trade agreement (CETA) between the EU and Canada has been under negotiation since June 2009 and should be signed in 2011. Effectively, a positive outcome has become anything but certain since concerns of the impact of an agreement on social policy, environmental sustainability, public services, intellectual property rights, food sovereignty and other areas have risen on both sides in the last months.
Decision makers need to learn a lesson from this controversial debate: it is more than ever vital to assess the likelihood of success before starting negotiations on bilateral trade agreements. In other words, we need a realistic expectation management, bearing the interests of a vast number of stakeholders in mind. Without broad political backing and support, negotiations may sooner or later stall and produce nothing else than frustration among the parties involved.
However, trade agreements are definitely not the only way to boost global trade. A lot can be done to boost global trade and fight its worst enemy – protectionism – unilaterally. That applies not only to other parties, but also to the EU.
What does that practically mean? Above all, the EU could and should start a discussion on the finality of anti-dumping duties. Before imposing such harsh measures, the EU should thoroughly asses if they are really necessary and justified. The latest WTO ruling indicates that the EU’s anti-dumping measures against Chinese producers of screws and bolts are unjustified. According to the WTO, they were simply designed to protect European producers against fair competition. Such charges are anything but new. The latest renewal of the EU’s anti-dumping measures against Chinese and Vietnamese shoe producers have activated the very same criticism.
Moreover, an open and frank discussion on broadening the information technology agreement (ITA) is overdue. The EU’s refusal to include further IT and electronic devices into the ITA, does not underline the EU’s claim of being one of the strongest supporters of free trade.
Generally, European policy makers are more than ever aware of the necessity to evaluate, discuss and, if necessary, review the EU’s trade policy. Right now, the Commission is about to assess the public consultation on a future trade policy. The results of the Commission’s assessment will accelerate and facilitate the further debate. At the end of such a debate, a clear strategy for the EU’s future trade policy has to be framed and implemented.
The following political objectives should be included into such a strategy:
-
- Fight protectionism both in Europe and in export markets
In this context, the European Commission and the EU27 should keep on backing the WTO and ensure that its rulings will be respected and implemented.
-
- Ensure that growing economies (China, India) play by the rules
Against too aggressive export policies anti-dumping measures may remain a useful tool but need to be applied with a sense of proportion. Moreover, attempts to monopolize raw material supplies need to be closely watched.
-
- Promote multilateral trade agreements
Above all, this applies to the Doha agenda. Every initiative to break the stalemate in the negotiations should be supported.
-
- Use bilateral agreements for producing a level playing field and as a pathfinder for multilateral agreements
Bilateral agreements are able to bridge the absence of a broad and international solution. Moreover, such agreements may flatten the global dissent on issues of relevance for the Doha agenda. Thereby, they could facilitate further multilateral negotiations. The EU’s current policy and latest agreements – such as the agreement with Korea – have to be seen in that light.
-
- Avoid confusion between trade policy and environmental or social policy goals
To bridge controversial opinions in trade issues is – the Doha agenda is a sad proof – a difficult business. By adding social and environmental issues to the negotiations, it will turn into an impossible business. Achieving a compromise means a concentration of the range of topics, definitely not the opposite.
This strategy or at least some of its pillars might be controversial. Doubtlessly, the trade policy panel of the EIN Summer University 2010 will be is an excellent opportunity to discuss them, to exchange different point of views and to come to a common understanding concerning the challenges for policy makers.