EU Trade Policy formulation
4. In 2006, the Commission set out its overarching
strategy for trade policy in Global Europe: Competing in the
world.[3] The document
sets out the links between trade liberalisation and the internal
Lisbon Agenda for Jobs and Growth. The document makes the negotiation
of an ambitious, balanced and just multilateral agreement the
primary trade policy aim for the EU. It also recognises the links
between trade policy and other external goals, including policies
on sustainable development and support for countries neighbouring
the Union.
5. Policies are categorised under two main headings:
domestic (a competitive single market, openness to world trade,
and support for those regions of the Union which suffer negative
impacts from globalisation) and abroad (reducing tariff and non-tariff
barriers, providing access to resources including energy, opening
new markets in services, public procurement, and intellectual
property). The document also sets out an agenda of policy priorities:
· All domestic policies should factor in
global competitiveness challenges.
· A commitment to resuming the then stalled
negotiations at the WTO.
· Wide-ranging bilateral trade agreements
with the Association of Southeast Asian Nations (ASEAN), Korea,
Mercosur, India, Russia and the Gulf Co-operation Council.[4]
· The continuation of talks with the USA
about the removal of regulatory barriers to transatlantic trade.
· Negotiations with China.
· Strengthened intellectual property protection
in future agreements.
· Provision of more information on market
access to exporters.
· Negotiations to open countries' public
procurement markets to overseas firms.
· A review of trade defence instruments.
6. The Commission's negotiating mandates for
both multilateral and bilateral trade talks are agreed by the
Council of Ministers. The European Parliament has no explicit
powers regarding the conduct of trade negotiations although the
Commission regularly meets the Parliament to report on developments
in negotiations and trade policy.
7. While trade policy is an exclusive Community
competence, we were reminded by Mr Guy de Jonquières,
Senior Fellow, Chatham House, that "all trade policy is ultimately
about domestic politics" and that liberalisation required
"very painful and uncomfortable decisions" to confront
domestic producer lobbies (Q 3). Within Europe, this had
been demonstrated following the end of the Multi Fibre Arrangement
in 2005, when some Member States requested higher tariffs to protect
their textile production industries while others preferred access
to cheap garments to support their retail industries (Q 475).[5]
While we were taking evidence for this report, the French President
and Ministers from some Member States were critical of aspects
of the Commission's negotiating stance—despite the fact
that the Commission did not exceed its agreed mandate at any stage.
Mr Thomas MP, Under Secretary of State for Trade and
Consumer Affairs, described the criticism as no more than "sabre
rattling" (Q 553), and Lord Mandelson, giving evidence
as Secretary of State for Business, noted that a meeting of Member
States' Ministers in Geneva during the 2008 Ministerial had heard
some "reservations about the balance of the emerging deal"
but agreed to support the Commissioner's negotiations (Q 597).[6]
8. This led Professor Jean-Pierre Lehmann,
Professor of International Political Economy, IMD Business
School, to comment that "Europe has a common trade policy
but not a common trade ideology" (Q 475). He highlighted
the liberalising stance taken by the United Kingdom Government
but observed that trade was not a policy area that would "win
points" in EU domestic politics (Q 458).
9. However, we have chosen not to examine the
formulation of European trade policy or trade negotiation mandates
in this Report, although we may return to this subject in a future
inquiry.[7]
Our inquiry
10. The membership of Sub-Committee A that undertook
this inquiry is set out in Appendix 1. We are grateful to those
who submitted written and oral evidence, who are listed in Appendix
2; all the evidence is printed with this report. With three exceptions[8],
all of the evidence for this inquiry was received before the July
WTO Ministerial meeting in Geneva. In particular we are grateful
to those witnesses who took time to meet us during our visits
to Brussels and Geneva in the weeks immediately prior to the Ministerial
meeting. There is a glossary in Appendix 4. We also thank the
Sub-Committee's specialist adviser Professor Jim Rollo, Professor of
European Economic Integration, University of Sussex. We make
this report for debate.
1 European Union Committee, 16th Report (2003-04):
The World Trade Organisation: the role of the EU post-Cancún
(HL 104) and 17th Report (2005-06): The World Trade Organisation:
The Hong Kong Ministerial 13th-18th December (HL 77). Back
2
This report deals with the EU's external trade policy. We recently
considered internal trade in European Union Committee, 5th Report
(2007-08): The Single Market: Wallflower or Dancing Partner?
(HL 36) Back
3
COM (2006) 567. Back
4
ASEAN is a political partnership including a free-trade agreement
and its members are Brunei Darussalam, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
Mercosur is a trade bloc comprising of Argentina, Brazil, Paraguay
and Uruguay. The Gulf Co-operation Council's members are Bahrain,
Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Back
5
The Multi Fibre Arrangement was an agreed list of quotas for textile
imports that existed from 1974 to 2004. Back
6
Lord Mandelson also noted that the Commissioner for Trade negotiated
on behalf of the Member States but did not sign the final Agreement
on their behalf, thus allowing them to veto the decision if they
desired (Q 597). Back
7
The Lisbon Treaty would grant the European Parliament the right
of co-decision with the Council on trade issues. We considered
such a change briefly in our 2004 Report, when we highlighted
the "potential danger for the European Parliament to become
a lobby for protectionist interests, and thus for anti-liberalisation
voices." This conclusion was supported during this inquiry
by Mr Kamall MEP (QQ 233-234). Back
8
Supplementary written evidence from Mr Guy de Jonquières
and Professor Simon Evenett, and oral evidence from Lord Mandelson
in his role as Secretary of State for Business, Mr Edward Barker,
Director of Trade Policy, BERR and Ms Fiona Shera, Deputy Director
for the Trade and Development Team, Joint Trade Policy Unit, DfID. Back
