The future of EU trade policy

SUMMARY

In her speech, Commissioner Cecilia Malmström set out the EU's trade agenda for 2017 and beyond. In light of last years political events and the current overturning of the international trade chessboard, Cecilia Malmström shared her views about the reasons why trade is worth fighting for; and how the European Commission will continue ensuring that trade is (and will be more) transparent, fair, protecting our values at home, while promoting them abroad.

According to the Commissioner, trade is about openness and opportunity. For European citizens and firms (with 31 million jobs dependent on exports), but also for people beyond our borders. Millions of people have been lifted out of poverty because of trade”. However, with unemployment rates remaining unbearably high in many European countries, an increasing number of citizens feel left behind, or with declining income and uncertain future.

Many jobs and wages have declined because of automation, with machines and computers replacing manual work, at a faster speed than any other previous Industrial revolutions. “Against this reality, trade deals are a handy scapegoat. But if we - incorrectly - lay all the blame for economic change at the door of free trade or globalisation, we won't end up solving our problems: we'll just delay the solution”. The only answer to globalisation and technological change is “more investment, training and education to help people adapt. An adaptation that must take place as fast as technology evolves”.

While the election of Trump will surely halt EU-US negotiations (at least for a while), Commissioner Malmström reminded that the world is bigger than one country. Precisely for this, DG-Trade has a long list of many other countries willing to deal with the EU, and about 20 more trade deals already in the pipeline.

She stressed the importance of opening the doors as much as possible in further negotiations and communicating in a more effective way with the public opinion. Mentioning the unprecedented degree of transparency at all stages of TTIP negotiations, she argued that “we have nothing to hide”.

Answering to the comments of André Sapir, and the questions posed by David Bremmer and the audience,Commissioner Malmström argued that an important lesson drawn from the negotiations for the CETA is that Member States governments should open up and engage, too. The support of national publics and parliaments is essential.

Then, the Commissioner presented the idea to extend to a multilateral level the new investment court system designed for CETA. She announced in Davos that the EU, alongside with Canada, will work towards this direction with all the partners willing to work to develop the details.

In conclusion, she pointed out that “by using trade policy as a vehicle for our values, we can shape globalisation, rather than merely submitting to it, or letting others shape it for us. It’s about ensuring other parts of the world embrace our high standards of protection in areas like consumer safety, health, or environmental protection.  Most countries still share this same vision: they believe in the benefits of open trade and investment, and are ready to work with us bilaterally and in multilateral organisations like WTO”.

Event notes by Filippo Biondi, Research Assistant.

Video recording

Read Commissioner Malmström's speech.

We are happy to welcome the European Commissioner for Trade, Cecilia Malmström on 24 January at Bruegel to discuss the future of EU-China relations in the context of a new US approach to China under Trump's administration.

The year 2016 was certainly eventful as far as EU trade policy is concerned. Among the many developments that occurred during the past 12 months, three are particularly noteworthy. The first was the difficulties with the signature of the trade agreement with Canada (CETA) in October and the ability of the EU to engage in international agreements in the future, notably on investment. As part of this debate, Commissioner Malmström will advance her plans towards a Multilateral Investment Court, a new instrument to address some of the concerns related to disputes with foreign investors.

The second follows Trump’s election in the fact that the EU-US trade and investment partnership deal “will probably be in the freezer for quite some time”. Commissioner Malmström will share her prospects and expectations of engaging with the new administration and the future of TTIP. The third key development was the expiry of some provisions in China's WTO protocol, the so-called ‘market economy status’.

Following the Commission's proposal on 11th November for a new anti-dumping methodology and China's request for WTO consultations with the EU and the US approach to China under Trump's administration.