EU Trade Policy is not Dead

Despite being in the midst of a crisis of confidence (“Is EU trade policy dead?”), glimmers of hope appear.

At the European Parliament’s International Trade Committee’s ‘Trade Policy Day’ meeting on November 9 there were two emerging trends to note in the details of the discussion.

• A defensive action against the ‘nationalisation’ of EU trade policy
• Nascent ideas to support trade agreements through coordinated policies

A defensive action against the ‘nationalisation’ of EU trade policy

Trade Committee Chair Bernd Lange said, “I don’t believe at all that we need to re-nationalise trade. But we need to reflect on ways to simplify and streamline procedures without undermining democratic involvement.” The European Parliament is emerging as a strong ally for the European Commission’s trade competence. MEPs see that their role is reduced if national parliaments also have to approve trade deals.

Despite the Lisbon Treaty solidifying EU competence for trade agreements covering goods, services, intellectual property and investment, Member States have pushed the Commission to allow for national parliaments to approve trade deals, such as those with Singapore and Canada.

MEPs in the centre parties argue that if the European Union gives national parliaments a vote on all trade agreements, this would further fragment and de-legitimise the European Parliament as a democratically-elected body to be the voice of the people and represent constituencies.

Commissioner Malmstrom emphasised the role of the European Parliament in her remarks, saying, “You have the authority and credibility to participate in national conversations on EU issues.”

Nascent ideas to support trade agreements through coordinated policies

The Trade Committee heard from a panel of experts representing leading global institutions who all reaffirmed the economic consensus that, ‘free trade is good; we just need to do it better’.

Trade is distributional in nature. There are winners and losers. ‘Doing trade better’ requires addressing transitions from sectors that suffer from competition by providing social safety nets and re-training. And the problem in Europe is that trade policy is federal, but actions to address the losses from trade rest at the national level

MEPs of all groups seemed to hear this message, and their questions recognised that promotion of complementary policies to help distribute the gains from trade is a way forward to solve the substantive problems with trade agreements and relieve the communication problems as well.

Of course, the discussion about trade assistance is not new. Trade economists have often advocated for strong adjustment assistance programmes to accompany liberalised trade. The renewed attention to the structural problem in Europe’s governance system is good, and could lead to a European solution for its current trade policy weakness.

A new hope

CETA continues to move forward, negotiations should be opened in 2017 with new partners, and EU Trade Ministers on November 11 will discuss how the EU engages with trading partners in negotiations. Of course, TTIP is a separate discussion.

But the claims that EU trade policy is dead are not true.

Michael Stanton-Geddes