The review of trade policy is the order of the day. It is part of the more general movement to make the European Union’s economy more resilient, with greater control over the production and supply chains of critical goods and services; and, to this end, it is articulated with industrial policy and competition policy, also under review. The aim must be to strengthen the European economic fabric, based on small and medium-sized enterprises, to open opportunities in all regions, to support the green and digital transition and to ensure conditions of fair competition, both within the internal market and in international trade.
The European Commission’s communication on the review of trade policy, published on 18 February, is a good starting point for the debate between Member States. The Portuguese presidency promoted, last Tuesday, an informal council of ministers responsible for trade, which welcomed the communication. This is quite balanced, showing that Europe can be more firm in defending its interests, but preserving its openness to the outside and the position of the world’s first trading partner. We will work to have the council’s conclusions approved in May.
However, the future of European trade policy is not just a doctrinal one. And it is enough to go down a little to the concrete of things to realize that we are facing a divisive theme, not all of them aligning with the same tuning fork. The divergences are not even organized along the usual fracture lines between East and West or North and South. The difficulties of understanding will increase, however, if we want to pretend that they do not exist. There are inescapable and urgent questions, and it is on the respective answers that we have to base the possible consensus.
More than four fifths of the world growth expected for the coming years will take place outside the European Union. Do we really believe that a drift in the more protectionist sense, creating barriers to entry or easing the rules of State aid to favor supposedly internationally competitive “European champions”, will make us more capable of participating in the global economy? Pure illusion: the closure of Europe will only aggravate the trend that is already occurring today to reduce its weight in the world product.
And, if we agree that a serious neomercantilism leads nowhere and that the connection to the outside will continue to be the engine of European strength, then it is or is not true that trade and investment agreements represent a key instrument of the so-called “strategic autonomy” open ”?
Few suggest that such agreements should not be subject to compliance by the parties with obligations regarding working conditions or compliance with health, environmental, sustainability or subsidization rules, without which the principle of fair competition would be at stake. It is quite a different thing to want to make the trade agreement the place where all the requirements for political or institutional proximity and all the demands that Europe rightfully places when it comes to defining its closest allies would come together. If Europe wanted to trade only with strictly equals, it would not only drastically limit the potential of its economy, but above all it would abdicate one of the most powerful means of bilateral and global influence at its disposal.
In addition, the grandiose proclamations on the necessity of making any agreement dependent on scrupulous respect for all European standards sometimes hide the basic defense of purely sectoral interests. Which stand against the agreements, not because they disrespect values, but because they undermine particular protections or acquired positions.
Finally, there is the issue of approval and ratification of agreements already concluded. What will the Union’s future credibility be if it does not complete the processes relating, for example, to Mexico and Mercosur, which have long been the subject of political agreements between the negotiating parties? Or if there is evidence of manifest disagreement between the effort you put into closing agreements with them and wanting to ratify them at all costs, when you use all your time with others?
These questions are being asked today within and outside the European Union. The future of trade policy depends on knowing how to answer them clearly. The Commission’s communication was a good starting point and the debate in the council was a significant step forward; but it is necessary to know how to draw consequences. For the sake of Europe’s role as a global player that the world can count on.