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Struggling with globalisation, EU to take tougher line with trade partners

Agence France-Presse | 17 September 2006

Struggling with globalisation, EU to take tougher line with trade partners


Struggling to cope with shifting patterns of global commerce, the European Commission is planning a more "hard-nosed" approach to breaking into foreign markets and ensuring EU exporters get a fair deal from its trade partners.

The tougher line on market access will be one of the main planks of EU Trade Commissioner Peter Mandelson’s plans to beef up the bloc’s international competitiveness, which are to be unveiled on October 4.

In preparatory notes seen by AFP, the commission said that its current trade strategy, which was launched in 1996, "has not lived up to its full potential" on opening markets, attracting investment and protecting intellectual property rights.

Where EU companies face restrictions and their intellecual property rights are not fully respected "we can and should be hard-nosed about improving these conditions," the commission document asserts.

However "a tougher approach does not mean forcing open markets," it adds.

Once the new strategy is brought in next year, it will focus on "making sure that rules are respected and obligations to provide fair trading conditions are fulfilled".

With that aim in mind, the commission wants to better use its available trade instruments, such as anti-dumping rules and negotiating new free-trade agreements.

At the same time, the commission does not plan to back away from the multilateral approach and "the WTO will remain the essential platform for ensuring Europe’s interests are recognised in the gloabl trading system", the note said.

In the future, new free trade agreements "should be focused on key partners", and in particular on tackling "non-tariff barriers", which now remain the main obstacle to the free flow of trade since tariffs have been eroded by succeeding waves of World Trade Organisation (WTO) liberalisation.

For example, the commission is seeking a mandate from member states by the end of the year to open negotiations with ASEAN and South Korea for free-trade agreements.

Brussels also has high hopes for trade with Latin America and wants to relaunch negotiations with Mercosur as well as opening talks with Central American and Andean countries.

The commission wants to give particular importance to prying open public procurement markets, which represent "an area of enormous untapped potential for EU exporters".

The commission says that public procurement markets, which are so far not covered by WTO rules, generate 10 to 25 percent of the gross domestic product of some of the EU’s partners.

But although it considers its own public procurement markets to be open to others, the EU "constantly finds it difficult to obtain satisfactory, reciprocal commitments from its trading partners."

In a recent example, Canadian train maker Bombardier was selected for a project without a tender in Quebec, leaving French group Alstom out of the race even though in France an open tender would have to be held.

For Mandelson, who has been dubbed the "globalisation commissioner" in the EU executive, the stakes are not only economic but political and social.

Opening up foreign markets makes it easier to dispel the temptation in some member states to shut out the outside world with trade barriers, the commission note said.

"Closing our own border is almost always counterproductive as it cuts off business from global supply chains and the import of cheap materials for production," it said.

The commission’s review of its trade policy would therefore identify "the opportunities and risks of globalisation and set out a programme to increase our ability to respond to, and reap the maximum of benefits for our citizens, of global economic change".

In the EU, that translates into taking care to help the victims of shifting trade patterns while making sure that "the positive effects of trade opening benefit all consumers and are not captured by specific interests".

 source: Turkish Press