8 EU Trade Strategy
| Committee's assessment |
Politically important |
| Committee's decision | Cleared from scrutiny; drawn to the attention of the Business, Innovation and Skills Committee and the Foreign Affairs Committee
|
| Document details | Commission Communication on Trade for All: Towards a more responsible trade and investment policy
|
| Legal base | — |
| Department | Business, Innovation and Skills
|
| Document Numbers | (37189), 13111/15, COM(15) 497
|
Summary and Committee's conclusions
8.1 On 14 October, the Commission published its new trade strategy,
Trade for All: Towards a more responsible trade and investment
policy, ("Trade Strategy") — a five year indicative
programme for EU trade and investment policy.
8.2 The Commission considers that the new approach
is a direct response to the intense debates on the accountability
and impact of trade policy taking place across the EU and is therefore
implementing the Juncker Commission's pledge to listen and respond
to EU citizens' concerns. In particular, it sets out a range of
trade and investment initiatives based on three 'pillars' —
'effectiveness', 'transparency', and 'EU values', and presents
a forward looking programme of multilateral and bilateral trade
and investment negotiations.
8.3 The Minister for Trade and Investment, Lord Maude
of Horsham, is broadly supportive of the Trade Strategy, stating
that it "presents an ambitious, trade-liberal, modern approach
to European trade policy for the next five years which is in line
with the Government's ambition to secure ambitious trade agreements
suitable for the 21st Century in a responsible and transparent
way". While the Minister welcomes all the main themes of
the Trade Strategy, in particular its ambition for reinvigorating
the WTO and concluding existing and new bilateral agreements (noting
that the UK's priority FTAs are with the USA and Japan), he also
stresses the need to "see negotiations progress more quickly".
8.4 We note that a more effective, transparent
and responsible EU trade and investment strategy can help deliver
economic growth and boost welfare both in the UK and globally,
and complement and support the EU's external policies as well
as the EU's drive for deepening and extending the internal market.
8.5 We take note of the key strands of the Trade
Strategy, in particular:
· Ensuring
that trade policies are more 'effective' by: focussing on services
trade liberalisation, professional mobility and digital trade;
paying more attention to SMEs; and reviewing the tools or instruments
intended to help workers or regions negatively affected by structural
changes (for example, the European Globalisation Adjustment Fund);
· Recognition
by the Commission that it needs to be more 'transparent' in the
way it conducts trade negotiations and trade defence cases, and
engages with civil society to respond to public concerns, for
example on regulatory issues;
· Using
trade as a lever to promote 'EU values' and standards globally
(such as labour, environmental and consumer protection, human
rights, good governance and anti-corruption rules);
· Developing
an investment regime which safeguards EU governments' right to
regulate and transforms the old investor-State dispute settlement
system into a public Investment Court System (with a court of
first instance and appeals court, code of conduct and independent
judges), with the long-term goal being the establishment of an
International Investment Court; and
· Incorporating
the commitments of effectiveness, transparency and values above
into the EU's programme of trade negotiations.
8.6 We are disappointed that the Explanatory Memorandum
lacks detail on the Government's priorities and what the Government
considers the prospects for delivery of the commitments are. In
particular, the Minister could have:
· been
clearer as to where the Commission's and UK Government's priorities
align and/or diverge (and the reasons for this), and what specific
results he would like to see emerge within the next couple of
years; and
· provided
information on what the Government is doing or will do to help
negotiations progress more quickly (particularly as seeking agreement
on an ambitious range of initiatives that tackle complex 'behind
the border' barriers to trade and investment and promote wider
EU values is likely to be resource and time intensive).
8.7 In terms of timing and delivery, we consider
that commitments to mainstreaming transparency should be implemented
quickly.
8.8 While we clear this document — one of
policy intent — from scrutiny, we urge the Government to:
· work
proactively with the Commission in increasing transparency in
trade negotiations and trade defence cases, and extending/deepening
the involvement of national parliaments (which are referenced
only once in the entire Communication) in trade negotiations and
trade policy implementation; and
· provide
(in the spirit of transparency underpinning this Trade Strategy)
timely updates on progress being made in implementing the Trade
Strategy, in particular on existing and future trade negotiations
and how these reflect UK interests, as well as reforms to the
investment regime.
8.9
In view of the political importance of
this Communication, we also draw it to the attention of the Business,
Innovation and Skills Committee and the Foreign Affairs Committee.
Full
details of the documents: Commission
Communication: Trade for All: Towards a more responsible trade
and investment policy: (37189), 13111/15, COM(15) 497.
Background
8.10 The Commission's Work Programme for 2015 envisaged
a comprehensive review of the EU's trade policy strategy, with
a particular focus on its contribution to jobs, growth and investment.
The Commission Communication of 14 October 2015
8.11 The Commission Communication sets out the Commission's
strategy for EU trade and investment over the next five years,
including a programme of trade and investment bilateral and multilateral
negotiations.
8.12 It emphasises that trade is one of the EU's
key drivers to boosting jobs, growth and investment. It also stresses
that the EU's trade and investment policy should support its wider
foreign and development policies — for example, by promoting
EU values and standards — as well as the functioning of
the internal market.
8.13 Three 'pillars' underpin the strategy: 'effectiveness',
'transparency' and 'values', which are summarised below.
8.14 Effectiveness — The Trade
Strategy proposes "an effective policy that tackles new economic
realities and lives up to its promises" by:
· Updating
trade policy to take account of the new economic realities such
as global value chains, digital trade and the importance of services;
· Supporting
the mobility of professionals and service providers;
· Reinforcing
international regulatory cooperation and the efficient management
of customs;
· Ensuring
stronger enforcement of the EU's rights through a range of mechanisms,
including EU diplomacy or the proportionate and effective use
of dispute settlement mechanisms or trade defence instruments;
· Including
effective SME provisions in future trade agreements; and
· Reviewing
the performance of the European Globalisation Fund to make it
more effective.
8.15 Transparency — The Trade
Strategy intends to support a more transparent trade and investment
policy by:
· Extending
the Transatlantic Trade and Investment Partnership ("TTIP")
transparency initiative to all EU trade negotiations;
· Increasing
transparency in the area of trade defence cases; and
· Working
more closely with Member States, the European Parliament and stakeholders
to implement trade and investment agreements better.
8.16 Values — The Trade
Strategy puts forward a trade and investment policy based on EU
values by:
· Including
a clear pledge to safeguard EU regulatory protection and a strategy
to lead the reform of investment policy globally. This is largely
a response to public concerns over TTIP. In particular, the Commission
commits to the "transformation of the old investor-State
dispute settlement into a public Investment Court System composed
of a Tribunal of first instance and an Appeal Tribunal operating
like traditional courts", with a code of conduct and independent
judges, and to working with international partners to develop
an International Investment Court;
· Expanding
measures to support sustainable development, fair and ethical
trade and human rights, including by ensuring effective implementation
of related FTA provisions and the Generalised Scheme of Preferences;
and
· Including
anti-corruption rules in future trade agreements.
8.17 The Trade Strategy finally sets out a "programme
of negotiations to shape globalisation" by:
· Giving
priority to the conclusion of major ongoing projects like the
Doha Round of multilateral WTO negotiations, the Transatlantic
Trade and Investment Partnership, the EU-Japan Free Trade Agreement
and the EU-China Investment Agreement;
· Launching
new negotiations with the Asia-Pacific region (including FTAs
with Australia, New Zealand, the Philippines and Indonesia);
· Ensuring
Economic Partnership Agreements are implemented effectively, and
deepening relationships with African partners that are willing
to go further and with the African Union; and
· Modernising
existing agreements with Mexico and Chile and the Customs Union
with Turkey.
The Minister's Explanatory Memorandum of 2 November
2015
8.18 The Minister presents the following analysis
of the Trade Strategy:
"First, in terms of trade negotiations, the
Commission recommits itself to the programme of ongoing FTA negotiations
(notably our own priority FTAs including those with the USA and
Japan), and sets out plans for four new deals in the Asia-Pacific
region (Australia and New Zealand, as this Government has championed
recently, and the Philippines and Indonesia). At the multilateral
level, the Commission is clear that the World Trade Organization
(WTO) must remain the cornerstone of EU trade, but that - in line
with our own thinking - it needs to be "re-invigorated".
The strategy also sends a strong signal that plurilateral negotiations,
on which we too are very supportive, involving subsets of willing
WTO members, such as those currently underway on services, information
technology and green goods, are necessary to keep liberalisation
efforts abreast of real developments in global trade.
"Second, this is a modernising strategy in how
it defines and approaches the nature of twenty-first century trade.
In particular, the paper recognises how imports from around the
world support production in the EU, it sets out trade in services
as a new priority, and it seeks to take advantage of opportunities
to ensure the EU is effectively plugged into global value chains
going forward.
"Third, it defines what it means by 'responsible
trade and investment'. For instance: the Commission has proposed
reforms for investor-state dispute settlement which it says will
place greater weight on preserving countries' freedom to regulate;
the paper cites the importance of including labour rights, environmental
standards and sustainable development in EU trade negotiations;
the paper commits the Commission to greater transparency in relation
to its trade negotiations; and sets out how trade contributes
to lifting people out of poverty and can integrate developing
countries into the global trading system. Also on Trade for Development,
there is an emphasis on ensuring that FTAs do not indirectly harm
Least Developed Countries interests, as well as on implementing
the recently agreed Economic Partnership Agreements (EPAs) with
three African regions effectively."
8.19 The Minister is broadly supportive of the Trade
Strategy, stating that it "presents an ambitious, trade-liberal,
modern approach to European trade policy for the next five years
which is in line with the Government's ambition to secure ambitious
trade agreements suitable for the 21st Century in a responsible
and transparent way".
8.20 The Ministers welcomes:
· "in
particular the ambition for FTAs, plurilateral negotiations and
reinvigorating the WTO, but will be keen to see negotiations progress
more quickly; and
· "the
other main themes of the strategy [including]:
o Modernising
[the] trade strategy in the light of Global Value Chains;
o Supporting
the multilateral system (whilst advocating change wherever needed);
o Greater
transparency around negotiations;
o The
investor-state dispute settlement reforms;
o The
ongoing emphasis on sustainable development; and;
o Using
trade as a tool to facilitate development."
8.21 The Minister concludes that the Trade Strategy
"presents trade agreements as a means of supporting economic
growth and job creation in Europe and in developing countries,
and of promoting European values abroad, and is largely in line
with the Government's trade policy priorities. The key now will
be to deliver on these promises".
Previous Committee Reports
None.
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