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Trade after the crisis: what is Europe′s global role?

Trade flows may have bounced back from pre-crisis levels but the crisis invites us to shift the focus of trade policy. I would argue that the crisis has indeed changed the landscape for trade policy. So, I would like to draw three lessons of the crisis.

By: EBR - Posted: Friday, May 13, 2011

"I would like to ensure that what we negotiate is implemented on the ground. With tariffs coming down as a result of trade liberalisation, the real task is about the regulatory barriers for trade, getting access to services and investment, opening public procurement markets, enforcing our companies′ intellectual property rights."
"I would like to ensure that what we negotiate is implemented on the ground. With tariffs coming down as a result of trade liberalisation, the real task is about the regulatory barriers for trade, getting access to services and investment, opening public procurement markets, enforcing our companies′ intellectual property rights."

by  KAREL DE GUCHT, European Commissioner for Trade*

First, the crisis reconfirmed the importance of global trade rules which had been taken for granted, somehow like wallpaper in a living room. Global trade rules provide an important shield against protectionism and a framework within which the recovery takes place. The WTO estimated that, between October 2008 and October 2009, new import restrictions introduced by G20 members affected not more than 1% of world imports.

Second lesson, the crisis backed up the significance of moving ahead with an ambitious trade agenda to deliver growth much needed to maintain our welfare States. Trade is part of the strategy to exit the current economic crisis. Our agenda will reach beyond tariff barriers and address the regulatory practices that stop trade flowing, particularly between developed and emerging economies.

Today the WTO rules offer an important base line and the successful conclusion of the Doha talks will strengthen that, for example in the chapter on Rules, by addressing inadequate non-tariff barriers. We will continue to work for a Doha deal and an agreement on "modalities" plus by this summer. We are seeking to turn the political engagement of the G20 Summit in Seoul into genuine progress. What we need here is actually rather simple: we need to build on the results achieved in 2008, which means that all parties will now have to engage in genuine give and take.

But we should do more bilaterally to complement what the multilateral negotiations can deliver. We will therefore be working hard to conclude on-going negotiations, particularly those most advanced at this stage – India, Canada, Singapore, Ukraine and Mercosur. We also hope to continue the process of launching bilateral negotiating tracks with more of our partners in the Association of Southeast Asian Nations (such as Malaysia and Vietnam) and stand ready to move ahead with partners in our near neighbourhood whenever the conditions are right. It is obvious that we are reflecting on our options vis-à-vis North Africa for example.

Third, the risk of protectionism has meant that enforcing the rules of trade is now as important as negotiating new ones. Opening markets through negotiations is no good if they are being closed again through the back door. It is on this third lesson of the crisis that I would like to focus our discussion today. And one that emerges strongly from our renewed trade policy, called "Trade Growth and World Affairs", which the Commission adopted last November.

Trade is the fuel that powers the global economy.
It has been one of the most important factors in the recovery – in Europe and elsewhere. The volume of global trade is 22.2% above the trough reached in May 2009. It was reported last week that world trade is back at its pre-crisis level. In many countries, exports are the only engine of growth, while competitively priced inputs are helping to businesses to keep down costs.

Last year, net exports from the EU were responsible for one third of our 1.8% GDP growth. It has helped to keep people in work and companies in business. During this year, we have kept our open and assertive trade policy in the face of protectionist threats. This year, I will move the enforcement agenda to the top of our political priorities, besides our negotiating agenda.

In other words: I would like to ensure that what we negotiate is implemented on the ground. With tariffs coming down as a result of trade liberalisation, the real task is about the regulatory barriers for trade, getting access to services and investment, opening public procurement markets, enforcing our companies' intellectual property rights.

Commitments in those areas are much harder to police than looking up an import tariff in a customs register. Analysing whether technically complex regulations are applied in a non-discriminatory and proportionate way: that is today's challenge to attain a real level playing field.

Speaking with a single EU voice is crucial.
It's about the EU acting together, using our tools in a carefully calibrated way. Our trading partners are more likely to sit up and notice when our efforts are in concert. We aim to enhance our strategic economic partnerships by setting priorities. I am standing up for a fair deal for European companies in the global marketplace. We need to open doors to new trade opportunities and keep them open through active enforcement. We need to ensure that the rules are applied equally.

* adapted from European Commissioner De Gucht’ s speech at the European Policy Centre (EPC), Brussels, March 1st 2011

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