2017 brought new developments in the policy governing the trade agreements the EU concluded with its main partners
One such development was the coming into force of EU-Canada Comprehensive Economic and Trade Agreement - CETA. It is estimated that, through this document, the volume of bilateral trade exchanges will grow substantially. For instance, exports from the EU to Canada will grow by 23% annually.
Also, the growth rate of the GDP across the EU will stand at approximately 11.6 billion Euros each year. Exporters from EU countries will be able, among other things, to trade wheat, flour and wine on the Canadian market without paying any taxes. At the same time, export fees in the machine-building sector, which amounted to 9.5%, have now been canceled following the implementation of CETA.
Not equally successful were the negotiations regarding the free trade agreement between the EU and the US. The Americans temporized talks on the Transatlantic Trade and Investment Partnership (TTIP) following Donald Trump’s victory in the presidential election. However, in mid 2017, the sides announced their intention to resume negotiations.
Despite being strongly supported by the EU institutions, both aforementioned agreements were denounced within the EU. Representatives of farmers, of environmental protection organizations and of European trade unions protested openly and often violently against the agreements negotiated by Brussels.
Romanian MEP Iuliu Winkler is the vice-president of the European Parliament’s Committee on International Trade (INTA) and a member of the European People’s Party. In his opinion, a big problem of the agreements negotiated by the EU with its trade partners is that there are no serious analyses made in relation to these agreements’ effects at regional level.
Iuliu Winkler: “As to the benefits and costs entailed by a trade agreement, this is a topic not very often approached in the talks held in Brussels. I have mentioned it during the talks we have at the Committee on International Trade but the topic was not welcomed. The question is: who makes the analysis at regional level? The territorial profile analysis? Who analyses the benefits and costs of a trade agreement? This is not actually being done. Their philosophy is: ‘the agreement is good for the EU. We are going to make billions.’ How are we going to make money? The big problem arises when we draft the agriculture chapter of a trade agreement, the chapters on technology exports, on market access. Thus, when we make this analysis, we discover that, unfortunately, part of these benefits are targeted somewhere else and not to Eastern Europe. Benefits are always in the West, in the North, where the big traders and exporters of the EU are located. The largest European exporter is, of course, Germany, which is also the most valuable exporter given that we speak of technology and high added value products. Unfortunately, the cost of these accords is often paid by Eastern Europe, by Romania for instance. In the late 1990s, as a condition for acceding to the EU, Romania restructured its steel industry and reduced its overcapacities resulted from the centralized communist economy from before 1989, so it paid this price once. We also paid this price in terms of chemical industry and sugar industry, to name but a few. At present, it seems that unless we manage to protect European industries from the Chinese overcapacities, the steel industry for example, we will be forced to pay the same price again. Who else produces steel in Europe? There is a number of producers but it will be us to pay the price because Eastern Europe has the lowest competitiveness.”
Among the things that are often reproached to the Union’s negotiations in terms of commercial accords is the lack of transparency. Romanian MEP Iuliu Winkler believes however that the times when these accords were negotiated behind close doors is over:
Iuliu Winkler: “We witness the birth of a new world of trade. We used to have an activity conducted mostly behind closed doors, behind the curtains, as commercial negotiations are extremely technical, and are hard to grasp by anyone except from commercial experts. So negotiators closed the doors and started negotiations. This practice is no longer possible. Society, media and the NGOs want transparency. They want to understand what’s going on. They want to know who makes the decisions. They want to know why we negotiate the Transatlantic Trade and Investment Partnership (TTIP) and if we negotiate it. They want to know why we did not sign the Anti-Counterfeiting Trade Agreement (ACTA), why we voted in favor of the commercial accord with Canada and which are the benefits. So the need for transparency is legitimate. In this new world of trade we will have to focus not only on free trade, but also on fair trade.”
China’s economic offensive and the United States’ new commercial orientation during President Trump’s mandate are serious challenges the EU has to deal with in the upcoming period.
Under these circumstances, it remains to be seen just how competent, fair and above all transparent will be the manner in which the EU’s next trade agreements with its partners will be negotiated.
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