Chairman, Honourable members, distinguished panellists
When we last met, I undertook to come back to you for a dedicated session on the Trade Policy Review, which I launched on 16 June. I am grateful that you have been able to organise this meeting and for the very distinguished panel that you have assembled. I am sure their opinions will prove to be stimulating and thought-provoking.
Perhaps the first question we should be asking is: why a trade policy review now? Well, there are in fact a number of reasons for “now”.
There are the obvious geopolitical reasons, reflecting China’s rise as an important partner but also a systemic rival and the retreat of the US from their traditional role of global leadership.
We have witnessed a rise of unilateralism and economic nationalism, as well as an increasingly geo-economic approach leading to the “weaponisation” of trade policy for other objectives. Finally, these elements have combined to weaken the multilateral rules-based order and global governance structures.
Then there is the Covid-19 crisis, which has left a devastating and indelible mark on our economies, our societies but, most of all, on our people, thousands of whom have died across the EU.
As we carefully plan our exit strategies from Covid-19 restrictions, we need to do everything in our power to protect and support our people and our businesses.
We are facing a deep and sudden recession because of the pandemic. The EU economy is expected to contract by 7.4 per cent in 2020, while global GDP will fall by 3.5 per cent and global trade by between 10-16 per cent.
So, we need our trade and commercial engines to be firing on all cylinders if we are to recover as quickly, as fairly and as sustainably as possible.
Meanwhile, the digitalization of our societies and economies continues to accelerate at a staggering pace and the European commitment to be a global leader on climate action and sustainable development has grown exponentially, in line with the expectations of our people.
The world is changing, and not alone must we change with it, but we must use our influence to shape that change if we are to retain and strengthen our position of global leadership in the “new normal”.
Trade and trade policy is not static - it is constantly evolving, it is highly dynamic. It must be refreshed and revised to stay relevant.
The world is a very different place to 2015, when our last significant EU trade policy communication - “Trade for All” - was published in 2015.
Having regard to the factors of change which are all around us, the European Commission decided that now is the time to undertake this review process.
The considerations for the Trade Policy Review
The review is driven by two main considerations:
- First, we need to see how trade policy can contribute to a swift and sustainable socio-economic recovery, reinforcing competitiveness in the post-Covid 19 environment, addressing the challenges the EU will face, and helping to promote our values and standards.
- Second, to see how trade policy can help build a stronger EU based on a model of “Open Strategic Autonomy”. This is not a slogan ̶ this is about reaping the benefits of openness for our businesses, workers and consumers, while protecting them from unfair practices and building up our resilience to be better equipped for future challenges. That means striking the right balance between a Europe that is “open for business” and a Europe that protects its people and companies. Open Strategic Autonomy means pursuing our own interests, independently, but not necessarily on our own (building alliances with likeminded countries, showing leadership for strengthening global governance; but being more assertive in pursuing our own interests and enforcing our rights).
The main themes of the Trade Policy Review
I’m sure that you’ve all read the consultation document that the Commission has published, so I’m not going to recall all of its elements this morning.
However, I would like to focus briefly on three of the six themes that are covered in that paper. These relate to
- the role of SMEs;
- support for the green transition and how we make trade more sustainable and responsible; and
- how to ensure fairness and a level playing field.
Our SMEs are the beating hearts of our economies and our communities. 87 per cent of EU exporters are SMEs and they support 13.4 million jobs across the EU, in every constituency that you represent. But, there remains significant untapped potential to support the trade and investment activities of European SMEs and the way they use the opportunities created by our trade agreements.
Green Transition/Sustainable Trade
Addressing the challenges of climate change, biodiversity loss or unsustainable use of resources is even more of a priority and an opportunity to use the recovery to build a more resilient economy.
The European Green Deal is supporting the transition to a climate-neutral and more sustainable economy and sustainability in supply chains will make them more resilient.
We should continue to reflect how trade policy could further facilitate the transition to a greener, fairer and more responsible economy at home and abroad. However, we do also need to bear in mind that, although trade policy has an important role to play, it has its limits and cannot alone solve complex global challenges.
Fairness and a Level Playing Field
A commitment to openness remains at the heart of our plans for future growth, prosperity and competitiveness. However, we need to ensure that our openness is not abused by unfair, hostile or uncompetitive trade practices.
While our preference is for new international rules which level the playing field, we must be prepared, in their absence, to stand up for our rights, using existing trade defence or dispute settlement tools and creating new tools where necessary.
The trade policy review should therefore aim at pursuing this reflection on how to address coercive, distortive and unfair trading practices by third countries.
Before concluding, I want to say a few words about the World Trade Organisation, which I have repeatedly said requires urgent root and branch reform to become relevant again.
We are supporters of global trade and committed multilateralists, but fair global trade requires proper global rules and, without a functioning WTO, we will all end up worse off.
The WTO is in the process of selecting a new Director General and, as you know, I decided last week against allowing my name to go forward for the post. I came to the conclusion that the process is likely to take considerably longer than originally scheduled, but I hope I’m wrong because the WTO needs the kind of stability that strong leadership will bring. I’m encouraged that all of the candidates appear to have a strong commitment to reform. Any DG pursuing such an agenda can be assured that they will have no bigger supporter than the European Union.
Of course, I’m sure that Pascal Lamy will have more to say about this topic.
As MEPs, you have unique insights into what our citizens, our stakeholders and our businesses are saying on the ground. Therefore, your critical feedback is absolutely essential for this review process.
I am here today, very much in “listening mode”. I want to hear your views and I want those views to feed into and influence the trade policy review.
I look forward to coming back to this in the Autumn, perhaps when the public consultation has ended. Once we have gathered and collated all the input, this will feed into a Commission Communication to be published at the end of the year.
We are anxious to gather as wide a range of views and opinions as possible and, with that in mind, we are organising events not alone here in Brussels (including a special Civil Society Dialogue on 13 July), but right across the Union through special stakeholder events in the Member States, organised with the help of our Representations.
I am very thankful to the honourable members who have already expressed their support for this initiative, and I certainly hope you will continue to do so. Please help us to spread the word among our citizens and stakeholders – we need to hear what is on their mind.
But, this morning is your initial opportunity and, so honourable members, I hand over to you. I look forward to hearing your initial reactions, and I am confident that, together, we can make this a very worthwhile initiative.