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La mondialisation, stade suprême du capitalisme ?

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Wladimir Andreff

Le commerce

The EU protectionist response to the financial and economic crisis

Giovanni Graziani

Texte intégral

World protectionist trends during and after the global economic downturn

1Financial and economic crises in modern history seem to have witnessed an increase of protectionist pressures and measures: when the economy shrinks, competition becomes harsher and unemployment surges, the different sectors become more vocal in demanding protection. The 2008-2009 financial and economic crisis does not appear to have been an exception to this general pattern.

  • 1 . OECD-WTO-UNCTAD, Report on G20 trade and investment measures, 14 September 2009.

2Official statements by international organizations have shown a tendency to play down the extent of protectionist measures actually implemented by the various governments during and in the wake of the crisis. Following other WTO reports to the G20 leaders offering continuous monitoring on protectionist trends in the world, a 2009 joint OECD-WTO-UNCTAD report affirmed that, up to September 2009, there had been no widespread resort by the G20 members to trade or investment restrictions, but admittedly continued policy slippage crept in since the global crisis began1. It was however required that many emerging countries had raised tariffs and introduced new non-tariff measures to protect domestic production in certain sectors, especially agricultural products, iron and steel, motor vehicles and parts, chemical and plastic products, and textile and clothing.

  • 2 . Bown Chad, “The Global Resort to Antidumping, Safeguards, and other Trade Remedies amidst the Eco (...)

3Moreover, all the G20 members, including the more developed ones, continued to use trade defence mechanisms. Here, not only the use of the traditional trade remedy instruments of anti-dumping and global safeguards have spread to new countries, but also many countries have been implementing the use of other new instruments, like the China-specific transitional safeguards and countervailing duties2.

  • 3 . WTO, Report to the TPRB from the Director-General on trade-related developments, WT/TPR/OV/W/3, G (...)
  • 4 . Eichengreen Barry et Irwin Douglas, The Protectionist Temptation: Lessons from the Great Depressi (...)
  • 5 . Beattie Alan, “Protectionism: Pantomime villain fails to materialise”, in Financial Times, 25 jun (...)

4Almost one year later, a new report from the WTO Director-General was stating that “despite the severity of the global financial crisis and its widespread impact on economies around the world, governments have largely resisted resort to trade barriers”, although one could find “still instances of trade restrictive measures taken during the period under review3”. The report even finds that there exists an overall pattern of a declining trend in terms of instances of new measures and their coverage of trade, although it points to the growing risk of a potential accumulation of trade-restricting measures implemented since the outbreak of the global financial crisis. It further estimates that all restrictive measures affect roughly 0. 4 per cent of total world imports, apparently basing the calculation only on tariff increases and trade defence actions. All in all, the general opinion has been that for the moment the measures taken at the border are worrisome, but limited: no raising of tariffs like in the 1930s has yet taken place4. This general perception found a colourful expression in the title of a Financial Times article: “Protectionism: Pantomime villain fails to materialise5”.

5Such a widespread consensus seems to be founded on a rather narrow concept of protectionism. Extending the latter, the Global Trade Alert (GTA) database, launched on 8 June 2009, has been gathering all available information about actual and pending state measures liable to affect foreign commercial interests, starting from the ones announced on or after 1 November 2008 (http://www.globaltradealert.org). GTA does not discuss the WTO legality of a measure, nor its “fairness” or “appropriateness”. All state initiatives that introduce or change asymmetries of treatment to the detriment of some foreign commercial interests are considered to be contrary to the no-protectionism pledges made at the November 2008 G20 summit in Washington, DC. Moreover each initiative is being studied in its impact on tariff lines, sectors and number of trading partners.

  • 6 . Unequal Compliance: The 6th GTA report, CEPR and Global Trade Alert, Evenett Simon (ed.), London, (...)
  • 7 . The Collapse of global trade, murky protectionism, and the crisis: recommendations for the G20, B (...)

6From this renewed perspective, protectionist trends appear already in 2009 more pronounced than several analysts had pointed out6. Even the comparison with the 1930s protectionism might appear misplaced, since the types of discrimination have been different. In fact, in the context of the recent crisis, more worrisome than tariff raisings have been the numerous “behind the border” protectionist trends. These are more subtle, murkier, creeping forms of protectionism or economic nationalism, which do not represent direct violations of WTO obligations7.

7For instance, the fiscal and financial packages introduced to tackle the crisis contain elements-such as state aids, other subsidies and “buy/lend/invest/hire local” conditions-that favour domestic goods and services at the expense of imports. Stimulus packages generally contain actions to prop up industry sectors through subsidies and rescue plans. The subsidy components of these programmes have a clear competition-distorting effect. One should only recall that, given the size of these packages, stimulus measures taken to keep jobs (auto sector) or to rescue sectors of strategic importance (banks) or to stimulate demand (“buy national” provisions) could have a stronger impact on trade and competition than traditional trade restrictions.

8All governments of the world, in particular developed and emerging countries, resorted to such packages during the first year after the outbreak of the crisis. These were three times more numerous than tariff increases. If one adds export taxes, public procurement measures, local content requirements, exports subsidies, migration measures and other non tariff barriers, one may gauge the difference in the mix of measures from the experience of the 1930s.

  • 8 . WTO, Report to the TPRB from the Director-General on trade-related developments, op. cit.
  • 9 . Managed Exports and the Recovery of World Trade: The 7th GTA report, Evenett Simon (ed.), CEPR an (...)

9If we take into consideration all these measures, there is little evidence of a general fall in protectionism even after the first signs of recovery in 2010. Many government stimulus measures were still in place in 2010, although newer programmes were found to be less frequent8. More importantly, as recovery proceeded and trade started expanding again, the nature of protectionism has been taking new forms, most of which under the guise of so-called “managed exports”, that is measures taken to stimulate exports, like export promotion schemes, subsidies, cheap access to credit, tax rebates and exemptions for exporters9. All countries have been involved in some form or other of this kind of new mercantilism, often as a retaliation to other nations’ initiatives. And this is not the end of the story: by the end of August 2010 there were still 234 potentially protectionist measures in the pipeline, 146 of which were trade defence investigations.

  • 10 . Managed Exports and the Recovery of World Trade: The 7th GTA report, op. cit.

10Drawing a global picture, from November 2008 to October 2010 bailouts and state aids are the most used types of beggar-thy-neighbour policies (28 per cent of the total), followed by trade defence measures-anti-dumping, countervailing duties, safeguards-(21 per cent), tariff measures (14 per cent), export taxes or restrictions (6 per cent), public procurement (5 per cent), migration measures (4 per cent), other unspecified non tariff barriers (4 per cent), export subsidies (3 per cent) and finally local content requirements (3 per cent), leaving a residue of 9 per cent of miscellaneous measures (calculated from GTA database). Although the most affected sectors appear to be transport equipment, basic metals, special purpose machinery, basic chemicals, agricultural products and financial intermediation sectors, in the order, one basic feature of recent protectionism has been its covering of a wide spectrum of sectors. That is, most governments today not only discriminate in a wide variety of forms, but also in many different products and sectors reaching the near totality of nations of the world. Altogether, the above-mentioned policies are estimated to be covering more than 10 per cent of world imports10.

The EU response to the crisis

11How has the EU behaved within this context of generalized protectionist upsurge ? Her official position has always been to fight protectionism under every form, fully supporting the many G20 pledges against protectionism.

12The GTA database seems to tell another story. The EU appears to have joined most countries in the world in announcing and implementing a lot of harmful measures against trade partners. Table 1 lists the top 10 countries in the world that have imposed “red measures”, i. e. measures that have been implemented and almost certainly discriminate against foreign commercial interests.

  • 11 . “Red measures”: measures that have been implemented and almost certainly discriminate against for (...)

Table 1. Top 10 countries that have inflicted most harm (imposing “red measures11”)

Rank

Ranked by number of “red measures” imposed imposed

Ranked by the number of tariff lines (product categories) affected by “red measures”

Ranked by the number of sectors affected by “red measures”

Ranked by the number of trading partners affected by “red measures”

1.

EU27 (164)

Viet Nam (925)

EU27 (57)

Argentina (174)

2.

Russia (81)

Venezuela (784)

Algeria (54)

EU27 (168)

3.

Argentina (53)

Kazakhstan (719)

Nigeria (45)

China (160)

4.

India (47)

Nigeria (599)

Venezuela (38)

Indonesia (151)

5.

Germany (33)

EU27 (465)

Viet Nam (38)

Viet Nam (148)

6.

UK (29)

Russia (422)

Kazakhstan (36)

India (145)

7.

Brazil (28)

Argentina (393)

Russia (34)

Russia (143)

8.

Indonesia (24)

India (363)

India (32)

Finland (132)

9.

Italy (22)

Indonesie (347)

Indonesia (32)

Germany (132)

10.

China (20)

Ethiopia (345)

Ethiopia (32)

UK (131)

Source: calculations from Global Trade Alert database (accessed on 27 October 2010)

13The EU27 ranks first on two metrics, by the total number of “red measures” imposed and by the number of sectors affected. It ranks second on the number of trade partners affected by her measures and fifth on the number of tariff lines affected. To this, one should add the data relating to individual EU member states, when action was not taken collectively by all the 27 member states. Germany, the UK, Italy and Finland seem to have been particularly active.

14It should be recalled that some of the measures taken by the EU27 have had discriminatory effects also on individual EU member states, adding further elements to the negative aspects of such measures.

15Considering also the so-called “amber measures”-that is measures which have been implemented and may involve discrimination against foreign commercial interests, or measures that have been announced or are under consideration and would (if implemented) almost certainly involve discrimination against foreign commercial interests-the EU27 would still be on top by the number of measures imposed, followed by Russia, Argentina, India and the USA (GTA database).

16One of the striking features of these policies is that they foster possible retaliation: this is one of the reasons why one may find many of the top offending countries also on the side of the targets of those measures. Table 2 shows the top 10 biggest targets of “red measures”. China seems to be the top target, closely followed by EU27 and the major economies of the world. But China appears also among the ten worst offenders, and increasingly so. This ranking might last also in the near future, once we take stock of the pending measures, which are even more biased against China. Strangely enough, for the moment, emerging countries do not appear to be among the main targets of world average “red measures”.

Table 2. Top 10 biggest targets of “red measures” from the world

Target

Number of “red measures” imposed on target

Number of trading partners imposing “red measures”

Number of pending “red measures”, which, if implemented, would harm target too

China

327

79

118

EU27

311

80

80

USA

248

70

45

Germany

234

55

54

France

213

57

44

UK

207

55

42

Italy

203

52

48

Japan

187

63

45

Belgium

187

52

40

Netherlands

185

52

41

Source: calculations from Global Trade Alert database (accessed on 27 October 2010)

17The outlook appears slightly different if one takes into consideration the trading partners affected by the “red measures” implemented by the EU and the EU member states (Table 3). China still tops the list, but the USA, Japan and Switzerland follow closely, preceding emerging economies like India, South Korea, Turkey and Brazil (South Africa, Thailand, Mexico, Malaysia and Russia being also present among the top twenty targets). The particular competitive pressure on the EU from the latter group might partly explain its importance in the list.

Table 3. Number of trading partners affected by red measures implemented by the EU and the EU member states (only partners affected by at least 20 “red measures” appear in the list)

Memo : total number of affected trade partners: 164 of which:

Number of “red measures” affecting the partner

Memo: total number of affected trade partners: 164 of which:

Number of “red measures” affecting the partner

China

50

EU member states:

United States

42

UK

37

Japan

37

Netherlands

36

Switzerland

37

Belgium

36

India

33

Germany

34

Korea

32

France

34

Turkey

31

Sweden

33

Australia

26

Spain

31

Brazil

25

Austria

31

Canada

25

Italy

30

South Africa

25

Denmark

28

Norway

25

Czech Republic

26

Thailand

24

Finland

26

Mexico

23

Slovakia

25

Malaysia

21

Slovenia

23

Russia

21

Greece

22

New Zealand

20

Hungary

22

Romania

22

Portugal

21

Poland

21

Note: there are 128 further trade partners (eight of which being EU member states), each affected by less than 20 EU and EU member states’ “red measures”.
Source: calculations from Global Trade Alert Database (accessed on 27 October 2010)

18Worth of noting is also the fact that EU measures affect extensively the other EU member states as well. The main reason lies in the peculiar nature and types of EU measures. If we take both “red” and “amber” measures implemented by the EU and the EU member states, we can see that they are particularly skewed towards the bailouts and the state aid measures-76 per cent (as against the world average of 28 per cent), followed by far by trade defence measures (AD, CVD, safeguards)-almost 10 per cent (as against a world average of 21 per cent), while all the other types of implemented measures (migration measures, export subsidies, investment measures, public procurement, other service sector measures, local content requirement, consumption subsidies and export taxes and restrictions, in the order) represent correspondingly only minor shares of the total, while being generally more represented in the world average [Table 4].

Table 4. Number of harmful measures (classified red and amber) implemented by the EU and the EU member states, by type of measure

Bail out/state aid measure

142

Trade defence measure (AD, CVD, safeguard)

19

Migration measure

6

Export subsidy

5

Investment measure

4

Public procurement

3

Other service sector measure

3

Local content requirement

1

Consumption subsidy

1

Export taxes or restriction

1

TOTAL

185

Note: Red (i) The measure has been implemented and almost certainly discriminates against foreign commercial interests. Amber (i) The measure has been implemented and may involve discrimination against foreign commercial interests ; OR (ii) The measure has been announced or is under consideration and would (if implemented) almost certainly involve discrimination against foreign commercial interests
Source: Calculations from Global Trade Alert Database (accessed on 27 October 2010)

  • 12 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade- (...)

19“Buy national clauses” have become fashionable among European governments. After the famous American Recovery and Reinvestment Act of February 2009, which included two “buy American” provisions that required government procurement of US-produced products12, one will recall the Swedish government suggestion that money should be spent in Sweden and the Spanish Ministry of Industry urging Spaniards to buy more local products.

  • 13 . Ibid. ; WTO, Report to the TPRB from the Director-General on the financial and economic crisis an (...)

20State aid packages have also become very popular. Particularly targeted is the auto industry. After the approval in the US of Federal loans for General Motors and Chrysler, various EU member states’ packages foresee specific support measures aimed at boosting domestic car production and sales (among others through car scrapping schemes). The most well known example is represented by the French government, who pledged 3 billion Euros each to ailing carmakers Peugeot Citroen and Renault in return for promises to safeguard jobs in France. President Sarkozy depicted the aid as encouragement for development of environmentally friendly cars, which, he said, would give French carmakers a competitive edge after an economic recovery. But at the same time the money should push Renault, Peugeot and Citroen, the main French producers, to keep their factories in France and prevent the loss of jobs. This action went hand in hand with the encouragement given to French banks to lend to airlines that might otherwise cancel Airbus orders. Sweden has offered loans to SAAB and Volvo and Germany announced incentives for car buyers and innovation. Spain granted loan guarantees and support for research and development for car industry. Finally the UK organised scrapping schemes and incentives for purchase of electric cars, while Italy provided subsidies to Fiat and Portugal to component suppliers13.

  • 14 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade- (...)

21This behaviour seems to have found a green light by the Commission, which relaxed in December 2008 the rules of the EU state aid regime to allow member states to offer subsidized interest rates on loans and state guarantees14.

22The crisis has in addition engendered some forms of financial protectionism, as evidenced by various bank bailouts and fund steering. Three examples may show this trend. France offered to inject 21 Billions Euros into six large banks to ensure that they were not at a competitive disadvantage to UK or US rivals. The UK government pressured many bailed-out domestic banks to withdraw from lending abroad and to increase lending at home. The Greek central bank governor warned Greek banks against using funds from government support package to support Balkan subsidiaries.

23Rising unemployment has also given new voice to job protectionism: “Right to work. UK workers 1st” said a poster of protesters at the Lindsey oil refinery, where the use of Italian and Portuguese construction workers by Total sparked wildcat strikes.

24Some signs of FDI protectionism start creeping through as well. In the EU, it involves more specifically sovereign FDI from Russia and more broadly the protection of national champions. As an example, at the beginning of 2009 Germany has strengthened its screening mechanisms for non-EU investment.

  • 15 . Zeman Nicholas, “Brazil’s Ecodiesel restructures, Argentine Renewables protests EU protectionism” (...)

25Finally, the EU has also been accused of so-called “green protectionism”. Although serious EU efforts to block pulp, paper and palm oil imports on ecological ground have already begun in 2003, that is well before the crisis, they underwent a sudden spurt in Summer 2010, when the European Parliament voted to close EU markets to “illegal” timber, supposedly to guarantee legally sourced products access to EU markets, while halting deforestation in third countries. Moreover, in December 2008 the EU Climate Energy Legislation Package established that biofuels used in Europe must have a reduction of greenhouse gas emissions of no less than 35 per cent when compared to fossil fuels. Since soy oil biodiesel was found to reduce emissions by only 31 per cent, imports of Argentinean or Brazilian soy oil biodiesel would be blocked15.

26Many of these forms are not easily quantifiable, as in the case of state aid packages, which last over a long period of time, or are not quantifiable at all, as in many cases of financial, job, investment and green protectionism. The latter may nevertheless cause substantial harm to trade partners.

  • 16 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade- (...)
  • 17 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade- (...)

27As for the other forms of “border protectionism”, the EU has been comparatively less active in export promotion than the world average. In one particular field the EU took however the lead: in January 2009 the EU reintroduced export refunds on dairy products like butter, cheese and whole and skimmed milk powder16. She was soon followed by the US on the same track17. One will also recall the July 2009 EU measures to help stabilize falling dairy prices by scrapping the minimum price for cheese to qualify for export subsidies and the approval of several programs aimed at promoting agricultural products in 12 member states, or, more recently, on January 2010, the European Commission proposal of additional exports of 500,000 tons of out-of-quota sugar until July 2010 (GTA database).

28As for trade defence measures, following a long tradition anti-dumping seems to be the preferred EU way of proceeding. Within this context, the EU does not appear to have been particularly more aggressive than other developed countries, her total number of initiations of anti-dumping investigations being even lower in 2009 than in 2008 and representing less than 10 per cent of all new investigations, on a par with the US. Moreover, in the majority of cases, the EU does not seem to be the first initiating country, but rather a subsequent initiating country.

29However, the still high frequency of initiations in the wake of the crisis seems to point at an important pressure exerted on governments to raise trade barriers. In October 2010 there were still 14 anti-dumping investigations initiated by the EU from September 2009 onwards. Steel, chemical products and China appear to be the main targets, while other emerging countries like India, Indonesia, Malaysia and Thailand follow at a distance (GTA database accessed on 27 October 2010).

  • 18 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade- (...)

30One should only remember that, historically, at least half of new investigations and requests for import protection by developed countries result in the imposition of new import restrictions (the share being almost 80% in the case of emerging countries). Moreover, national trade remedies may be used in a distorted way, once multinationals obtain local presence and become part of a domestic industry. Two examples are the Indian steel firms Tata (which merged with the British firm Corus) and Mittal (which acquired the European firm Arcelor). They both took active part into the European steel industry anti-dumping petitions that resulted in definitive or preliminary duties on certain iron and steel products between December 2008 and April 2009. The exporting countries targeted were China, Russia, Turkey, Belarus and Moldova, but not India18.

Protectionism and its possible impact on EU’s trade policy

31The evidence so far shows that recourse to protectionism has been limited where multilateral disciplines exist, like in the case of tariffs. However, even tariff protectionism remains a distinct possibility, since the increase in tariffs is compatible with WTO regulations, given that much of the tariff reduction undertaken in recent years has been unilateral or within the framework of regional trade agreements, resulting in considerable differences between the tariffs effectively applied and those consolidated at the multilateral level (bound tariffs). The EU (and the US) have thus a margin for increasing tariffs according to their consolidated commitments.

  • 19 . Piermartini Roberta, Trade policy commitments and contingency measures, VoxEU. org, 26 July 2009.

32The other border, contingency measures (trade defence measures and the like) adopted so far, which historically have always accompanied economic downturns19, all along with additional administrative obstacles to imports into the emerging countries, mainly enjoy WTO legal protection and are probably creating only “sand in the gears” of international trade, although they present an obvious risk of escalation in times of crisis.

  • 20 . The fateful allure of protectionism: Taking stock for the G8, Evenett Simon, Hoekman Bernard et C (...)
  • 21 . European Commission, Seventh Report on potentially trade restrictive measures. May 2010-September (...)

33However, where multilateral disciplines do not exist, countries were less able to resist to protectionist pressures, as exemplified by the case of the fiscal stimuli, the financial bailouts or export subsidies ; the same applies to public procurement and to the limitation to the movement of natural persons providing services, where multilateral disciplines do exist, but countries may have not committed themselves to abide by them20. A report published on 25 October 2010 by the European Commission shows that more than 330 trade restrictive measures have been taken by the European Union’s major trade partners since the outbreak of the financial and economic crisis in 2008. Despite the economic recovery and contrary to the G20 commitment, a mere ten percent of those measures have been removed in the meantime21. Similar comments one could make as far as the trade restrictive measures taken by the EU itself are concerned.

34The importance of the trade impact of those measures is still difficult to quantify. This is particularly evident in the case of the stimulus packages, all the more so since up to now only a fraction of the financial amount foreseen has been spent. But this is not a good reason not to take them seriously.

35Let us finally recall that some of the present measures might in the end prove incompatible with WTO regulations. The WTO allows domestic subsidies on the condition that they are destined for the restructuring of businesses, promotion of innovation and/or assistance of displaced workers. But it does not mention these abuses of legitimate discretion used to discriminate against foreign goods, services, workers and investors.

  • 22 . Hoekman Bernard et Leidy Michael, “Cascading Contingent Protection”, in European Economic Review, (...)

36What is worse, current protectionism could turn into beggar-thy-neigh-bour policies in the future, even without adopting the tariff weapon. There are various possible ways in which this result may materialize. Apart from sheer retaliation, imitation of other countries’ protectionist policy could derive from fear of a trade diversion of the products targeted in those markets to their own. Finally, when the trade barriers are imposed on imported inputs, downstream industries, feeling afraid of being out-competed, will increase their pressures for protectionism-a case of “cascading protection22”.

37Such a general climate might influence EU trade policy, should she decide measures in response to other countries’ measures (like the buy American clause). The Commission has not ruled on Sarkozy’s rescue plan for the auto industry. But it has responded to the crisis by declaring what amounts to a softening of the financial and trade discipline that was one of its main missions. Individual EU member states might resort again to “behind the border” measures. Some industrial, commercial and agricultural interest groups plus some civil society groups could side with the pro-protection forces. Certainly, the increase in unemployment will continue to fuel protectionist pressures in the future.

38What is then the possible future course of EU’s trade policy ?

  • 23 . Commission of the European Communities, Global Europe: Competing in the World. A Contribution to (...)

39In 2006, the European Commission launched the so-called “Global Europe” strategy, a new trade policy defined as an external aspect of competitiveness23. The core of the Commission’s position was that the refusal of domestic protectionism should go hand in hand with an increasing “activism” in creating open markets. Such an activism should be deployed in two main directions: a) a deeper engagement with the most important emerging countries ; and b) a keener attention addressed to the non-tariff barriers erected by EU trade partners. The growing EU needs to import energy products, metals and raw materials are explicitly mentioned, as well as the limited access to them imposed by some of the EU partners. Finally, and most importantly, the concept of market access was extended to new trade areas deemed extremely important by the EU: intellectual property rights, investments, public procurement and competition. One should only recall that these are all themes that the EU has tried without success to introduce in the multilateral negotiations. A new generation of free trade agreements (FTAs) was seen as the instrument to incorporate these topics, which are still out of the WTO.

  • 24 . European Commission, Europe 2020. A strategy for smart, sustainable and inclusive growth, COM (20 (...)

40Four years after the launching of the “Global Europe” strategy, the new Commissioner for External Trade, Karel De Gucht, announced the basic elements of a “renewed trade strategy”. In the intentions of the Commission, such renewed trade policy should build on the Global Europe strategy and on the “Europe 2020” strategy paper issued in March 2010, where the Commission has set a number of ambitious objectives for the EU to reach in 202024. From various official and unofficial declarations it appears that the future trade strategy will include the following elements:

  • a strong commitment against protectionism ;

  • a renewed emphasis on bilateral trade negotiations, especially with partners characterised by the strongest economic potential. Particular importance will be given to high-level strategic dialogues with the US, China, Japan and Russia ; in fact China and Japan are at present seen as the best candidates for new free trade agreements. With these countries, questions of market access and regulatory convergence-notably in financial-sector regulation-are more prominent concerns.

    • 25 . De Gucht Karel, Building on Global Europe: The Future of EU Trade Agenda, Berlin, House of German (...)

    a more forceful struggle to remove non-tariff barriers, including investment barriers. In fact, the development of a European investment protection policy will be one of the new priorities25

  • trade opening initiatives for sectors of the future, such as “green” products and technologies, high-tech products and services, plus a drive towards international standardisation ;

  • finally, concerning developing countries, a promise to better reflect development aims and to increase development aid.

  • 26 . Graziani Giovanni, “What is New in the New Trade Policy of the European Union ?”, op. cit.

41Will such a renewed trade policy develop fully ? One possible obstacle may be represented by the growing concerns of civil society organisations, both in developing countries and in the EU, which at times try to stop undesired contents of specific agreements or even entire agreements altogether. The differentiated and discriminatory use of rules of origin, the insistence on inserting in FTAs items that the developing countries have rejected in the Doha Round, like investment, labour, environment, competition, public procurement, the lack of transparency in the negotiating process, risk to add fuel to such a discontent and threat to extend it also to developing countries’ governments. In the course of time, pressured by partner countries and civil society organisations, the EU has relaxed some of the more stringent conditions attached to its free trade agreements. Criticisms have induced a softening of the position of the EU, for instance in the more recent European Partnership Agreements offers to ACP countries, although the EU negotiators have not completely renounced to take very tough positions, especially with the developing countries, according to the well-known “carrot and stick” approach26.

  • 27 . Official Journal of the European Union, The Treaty of Lisbon, C306, vol. 50, 17 December 2007.

42Much more pervasive in terms of changes in EU trade policy might be the implications deriving from the Lisbon Treaty entered into force on 1st December 200927. Not only has the new treaty extended the exclusive competence of the EU to FDI and to all services, including market access, national treatment and investment protection, but it has also enlarged the powers of the European Parliament over trade policy. From now on the European Parliament becomes co-legislator with the Council. Even if only the Council remains entitled to give a negotiating mandate, the European Parliament might start playing a role, by suggesting what areas should be included in trade agreements. Moreover, it will have to receive all the relevant information on the progress of negotiations from the Commission, which remains the sole trade negotiator. Finally, all trade agreements, before being adopted, will require the consent of the European Parliament.

  • 28 Graziani Giovanni , “What is New in the New Trade Policy of the European Union ?”, op . cit..

43These institutional novelties could induce considerable changes in trade policy. The European Parliament might tend to favour trade restrictions in relation to public health, security and public policy concerns (for instance child labour). Moreover, it could attach conditions to its consent, ensuring that a certain level of development has been achieved before trade agreements are signed. In contrast to the Commission’s past record of particular closeness to big business, the European Parliament might tend to show greater sensitiveness to interest groups like consumers, employees and civil society. In so doing, it will tend to consider other issues that go beyond mere trade, like sustainable development, social chapters and the impact on employment28. Three general consequences might ensue . First , new protectionist temptations could arise, as the European Parliament might be more sensitive to particular national lobbies . Second , there will be a tendency to politicize trade policy. And third, the new role of the European Parliament will tend inevitably to increase the complexity and the length of time needed to ratify agreements . All in all a new tension might develop between the old principles of Global Europe and other objectives , once trade policy is brought under the same external action principles as other items of EU external policies .

Notes

1 . OECD-WTO-UNCTAD, Report on G20 trade and investment measures, 14 September 2009.

2 . Bown Chad, “The Global Resort to Antidumping, Safeguards, and other Trade Remedies amidst the Economic Crisis”, in The World Bank, Policy Research Working Paper 5051, September 2009.

3 . WTO, Report to the TPRB from the Director-General on trade-related developments, WT/TPR/OV/W/3, Geneva, 14 June 2010 ; OECD-WTO-UNCTAD, Report on G20 trade and investment measures, 14 June 2010.

4 . Eichengreen Barry et Irwin Douglas, The Protectionist Temptation: Lessons from the Great Depression for today, VoxEU. org, 17 March 2009.

5 . Beattie Alan, “Protectionism: Pantomime villain fails to materialise”, in Financial Times, 25 june 2010

6 . Unequal Compliance: The 6th GTA report, CEPR and Global Trade Alert, Evenett Simon (ed.), London, 23 June 2010.

7 . The Collapse of global trade, murky protectionism, and the crisis: recommendations for the G20, Baldwin Richard et Evenett Simon (eds.), VoxEU. org, 5 March 2009.

8 . WTO, Report to the TPRB from the Director-General on trade-related developments, op. cit.

9 . Managed Exports and the Recovery of World Trade: The 7th GTA report, Evenett Simon (ed.), CEPR and Global Trade Alert, London, 13 September 2010.

10 . Managed Exports and the Recovery of World Trade: The 7th GTA report, op. cit.

11 . “Red measures”: measures that have been implemented and almost certainly discriminate against foreign commercial interests. There is no single metric to evaluate harm. Different policy measures affect different numbers of products, economic sectors, and trading partners. GTA reports four measures of harm.

12 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade-related developments, Geneva, 26 March 2009.

13 . Ibid. ; WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade-related developments, Geneva, WT/TPR/OV/W/2, 15 July 2009.

14 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade-related developments, JOB (09)/ 2, Geneva, 23 January 2009

15 . Zeman Nicholas, “Brazil’s Ecodiesel restructures, Argentine Renewables protests EU protectionism”, in Biodiesel Magazine, April 2010.

16 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade-related developments, Geneva, 26 March 2009.

17 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade-related developments, Geneva, WT/TPR/OV/W/2, 15 July 2009.

18 . WTO, Report to the TPRB from the Director-General on the financial and economic crisis and trade-related developments, Geneva, 26 March 2009.

19 . Piermartini Roberta, Trade policy commitments and contingency measures, VoxEU. org, 26 July 2009.

20 . The fateful allure of protectionism: Taking stock for the G8, Evenett Simon, Hoekman Bernard et Cattaneo Olivier (eds.), The World Bank and CEPR, London, 2009.

21 . European Commission, Seventh Report on potentially trade restrictive measures. May 2010-September 2010, Brussels, 25 October 2010.

22 . Hoekman Bernard et Leidy Michael, “Cascading Contingent Protection”, in European Economic Review, n ° 36 (4), p. 883-892, 1992.

23 . Commission of the European Communities, Global Europe: Competing in the World. A Contribution to the EU’s Growth and Jobs Strategy, Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, COM (2006) 567 final, Brussels, 2006 ; Aussenwirtschaft, The European Union’s New Trade Policy, Spezialausgabe, Zurich, 2006 ; Graziani Giovanni, “L’Unione Europea tra multilateralismo e bilateralismo commerciale” (the European Union between Trade Multilateralism and Bilateralism), in Rapporti tra Unione Europea e organizzazioni internazionali (The European Union’s relations with international organizations), Pfoestl E. (ed.), Roma: APES, 2009, p. 155-200 ; Graziani Giovanni, “What is New in the New Trade Policy of the European Union ?”, in Europe, Canada and the Comprehensive Economic and Trade Agreement, Hübner K. (ed.), London, Routledge, 2011.

24 . European Commission, Europe 2020. A strategy for smart, sustainable and inclusive growth, COM (2010) 2020, Brussels, 2010.

25 . De Gucht Karel, Building on Global Europe: The Future of EU Trade Agenda, Berlin, House of German Industries, 15 April 2010.

26 . Graziani Giovanni, “What is New in the New Trade Policy of the European Union ?”, op. cit.

27 . Official Journal of the European Union, The Treaty of Lisbon, C306, vol. 50, 17 December 2007.

28 Graziani Giovanni , “What is New in the New Trade Policy of the European Union ?”, op . cit..

Auteur

Professor of European Economy, Università di Parma

© Presses universitaires de Paris Nanterre, 2013

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