Bridges Weekly Trade News Digest • 11th November 2010
EU to focus on bilateral deals, Doha, and beyond
The European Commission on Tuesday set out a blueprint for an EU trade strategy that would help boost growth and job creation in Europe.
The paper does not represent a significant departure from the EU’s four-year-old ‘global Europe’ strategy, which called for free trade agreements (FTAs) with some key trading partners, cooperation to reduce non-tariff barriers with others, efforts to open up public procurement and investment markets, and the enforcement of existing trade commitments, including through the use of trade remedies.
Instead, the Commission focuses on how lowering trade barriers could help the Europe recover from the global economic downturn, looking at potential contributions to increased growth, purchasing power, and employment. The report is intended to highlight trade’s role in the EU’s growth strategy for the upcoming decade, dubbed Europe 2020.
“Trade is working for Europe’s economic recovery by ensuring growth and jobs”, said EU Trade Commissioner Karel De Gucht. “A renewed trade strategy will open markets and connect Europe to the main sources and regions of global growth. My aim is to ensure that European business gets a fair deal and that our rights are respected so that all of us can enjoy the benefits of trade.”
The Commission says that concluding agreements in the Doha Round negotiations and the ongoing bilateral FTA talks with major trading partners such as India and Mercosur would boost the EU’s GDP by more than 1 percent per year. For other, “strategic,” partners, such as the US, China, Russia, and Japan, it stops short of calling for full-fledged FTAs, but instead calls for joint action to tackle non-tariff barriers. industries. The report estimates that removing only half the non-tariff barriers from trade with the US would boost the EU’s GDP by 0.5 percent. Russia and China are singled out for a cautious approach on the grounds that both countries pursue policies based on “state capitalism.”
While the paper stresses that the multilateral talks are the Commissions’ top negotiating priority, it adds that a “Doha agreement will not give answers to the newer questions that global trade rules ought to take care of,” and pledges to set up a “group of eminent people” to “start reflecting on the next steps after Doha.”
In addition, the Commission wants to seek expanded access to public procurement markets in other countries, as well as pursue comprehensive investment provisions with some trading partners. It insists that it would ensure that intellectual property rights are protected in third countries and also at the EU’s borders (an observation that may be disquieting to countries concerned about the seizure in European ports of generic drug shipments en route from one developing country to another, on the grounds of suspected intellectual property violations).
On energy trade, the Commission says that it will pursue free transit and a diversified supply base for the EU. On resource trade, it calls for disciplines and a monitoring mechanism on the use of export restrictions.
Also figuring in the strategy is a heightened focus on impact assessments, including on the potential domestic social impacts of new trade initiatives.
The report promises two development-related announcements in 2011: a reform of the EU’s “general system of preferences” (GSP) scheme, and a communication on trade and development that will set out views on issues such as special and differential treatment for developing countries and how trade can help countries hit by natural disasters.