Memorandum submitted by War on Want
War on Want welcomes the BERR Committee's focus
on recent developments in the arena of international trade negotiations.
We offer the following short commentary on the new EU trade policy
introduced by the European Commission's October 2006 communication
Global Europe: Competing in the World.
War on Want wishes to register its deepest concern
at this new EU trade strategy, which explicitly favours the interests
of European exporters over the development needs of the global
South. With its open emphasis on meeting EU business interests
rather than broader international development objectives, the
strategy threatens to condemn many of the world's poorer communities
to deeper poverty. War on Want believes that a radically different
approach is necessary to ensure that trade does not have a negative
impact on the economies of the developing world, and to provide
the best chance of attaining the Millennium Development Goals.
PROVENANCE
Global Europe: Competing in the World is a reaffirmation
of the EU's neoliberal Lisbon Strategy as it applies to the EU's
external economic relations. The document has its origins in the
process initiated by the European Commission in September 2005
with its issues paper on "Trade and Competitiveness', which
was then discussed with business representatives at the Commission's
fifth market access symposium in Brussels on 19 September 2005.
The Commission published the final communication on 4 October
2006, along with a more detailed staff working paper and other
supporting documents, and the EU's Council of Ministers received
it officially at its General Affairs Council of 13 November 2006.
The document therefore now represents the official trade strategy
of all EU member states, including the UK.
CONTENT
Global Europe: Competing in the World defines
the EU's global interests in terms of an aggressive market access
agenda on behalf of European business. This pro-corporate approach
has been reaffirmed in the new Commission paper Global Europe:
A Stronger Partnership to Deliver Market Access for European Exporters,
published in early 2007. Much is made of the need for an "activist"
or "hard-nosed" approach to obtaining new market opportunities
for European exporters, especially by means of a new generation
of bilateral or regional trade agreements. With WTO negotiations
in permanent crisis as a result of EU and US intransigence, the
EU has now launched individual negotiations with ASEAN, India,
Korea, China, Central America and the Andean Nations. In addition,
the EU continues to pile pressure on African, Caribbean and Pacific
countries to sign Economic Partnership Agreements (EPAs) with
the EU, despite the acknowledged damage such agreements will cause
to their economies.
This move towards bilateral negotiations marks
a shift in emphasis for EU trade policy under Trade Commissioner
Peter Mandelson, especially when considered over and against the
multilateral emphasis of his predecessor Pascal Lamy. Mandelson
has been widely criticised in Geneva for withdrawing confidence
from the multilateral process at a crucial time in the WTO's negotiations,
and many commentators have noted that the EU's commitment to multilateralism
in its Global Europe communication is grudging at best.
The Global Europe communication identifies three
key areas in which the EU will press to secure new market access
opportunities for its corporations in external markets:
— non-tariff barriers: The communication
renews the EU's commitment to reducing tariffs in third countries,
despite the acknowledged problems this can cause in many developing
economies (including mass bankruptcies, redundancies and revenue
losses). However, the EU also now seeks to increase its focus
on a wide range of behind-the-border regulations which it terms
barriers to trade. To this end, the EU proposes that its new generation
of bilateral agreements should provide for European companies
to have prior consultation rights over new regulations which host
countries might wish to introduce, and that industry should have
access to monitoring and enforcement mechanisms "as efficient
as the WTO dispute settlement" (which operates only on a
state-state basis).
— access to resources: In response
to lobbying by European business groups, the EU identifies unimpeded
access to natural resources as a high priority and commits itself
to tackling the "major problems" faced by EU industries
in this regard. Many third countries employ export controls in
order to safeguard natural resources for their own developmental
and environmental purposes, and there has been strong resistance
to what are widely perceived as the neocolonial intentions of
powerful states in this regard. Yet the EU lists a wide range
of sectors, and energy in particular, in which controls must be
removed so that the access of EU business to such resources is
guaranteed.
— new areas of growth: The EU
lists intellectual property, services, investment, public procurement
and competition as "areas of economic importance to us"
which will require more aggressive action in future. While companies
have succeeded in winning far-reaching intellectual property rights
under the WTO's TRIPS agreement, largely to the detriment of developing
countries, the EU complains that enforcement of these rights remains
a challenge. Similarly, the EU bemoans the fact that services
account for three quarters of its GDP and employment but only
one quarter of world trade—yet third countries have expressed
far-reaching concerns at the negative social and developmental
impacts of liberalising their services markets for the benefit
of EU business interests. The three issues of investment, public
procurement and competition attained notoriety at the WTO, given
the profound threats posed by liberalisation in these areas. Yet
the EU still seeks to win "the ability to invest freely in
third markets" on behalf of its industries by means of an
"ambitious" new model EU investment agreement, as well
as opening public procurement markets to the major transport,
construction and utilities companies of the EU.
In addition, Global Europe: Competing in the
World looks to a programme of internal as well as external liberalisation.
The most significant threat posed by this programme is to be found
in the stated intention of "harmonising" European standards
so that they no longer create friction with trading partners whose
standards are lower. Peter Mandelson made clear in his Churchill
Lecture given in Berlin on 18 September 2006 that this means above
all a process of convergence with the US regulatory system beloved
by business for its meagre social and environmental content. The
Global Europe communication confirms that this agenda is driven
wholly by corporate interests: "The greater the consistency
in rules and practices with our main partners, the better for
EU business". Nowhere does it mention the damage which such
an agenda will cause to the peoples, the environment or the social
model of the EU.
ANALYSIS
The EU's twin focus on bilateral trade negotiations
and internal liberalisation stems from its failure to achieve
its corporate agenda through multilateral channels. The EU's attempt
to introduce a multilateral investment agreement failed first
at the OECD and then at the WTO's Cancún ministerial in
2003. The attempt to start WTO negotiations on public procurement
and competition policy also failed at Cancún, while the
European services lobby has repeatedly expressed frustration with
the Commission's unsuccessful efforts to open up foreign services
markets on its behalf. The EU's proposed ban on export taxes which
restrict corporate access to the natural resources of developing
countries has failed even to get onto the negotiating agenda at
the WTO.
This failure is partly due to the fact that
developing countries are no longer willing to submit to the ambitions
of the European business community as represented to them by the
European Commission. The formation of developing country blocs
at the WTO has succeeded in frustrating the worst excesses of
the EU's agenda, even if it has failed to deliver anything close
to a "development round'. The EU clearly hopes that it can
win much greater gains for its business community through the
bilateral route, irrespective of the negative impacts this may
have on the development prospects of poorer countries.
Global Europe: Competing in the World represents
a determined assault on the economies of the developing world
in the interest of European business, and a parallel attack on
the social model of the EU. The dual threat posed by this new
agenda demands a comprehensive political response from parliamentarians
in the UK and throughout Europe, as well as from trade unionists,
NGOs and other members of civil society. War on Want welcomes
the BERR Committee inquiry into the EU's new trade policy, and
encourages its member MPs to raise the above concerns as vigorously
as possible in the evidence sessions planned.
December 2007
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