On 18th February 2021, EU Trade Commissioner Valdis Dombrovskis presented the eagerly awaited Communication on the realignment of EU trade policy. This Communication marks the end of a long lasting process and shall, according to the Commission, be the start of a paradigm change towards a sustainable but nevertheless assertive trade policy.
In view of the serious weaknesses, exposed by the Covid-19 crisis during the past months, the then Trade Commissioner Phil Hogan initiated a review and realignment of EU trade policy in June 2020. This was not only a reaction to the far-reaching effects of the pandemic, but also to geopolitical developments; the aim was to develop a trade concept for the time after the crisis. Now, the result of the review process has been presented.
Recovery and transformation
The Commission defines a fundamental transformation of the economy in compliance with environmental and digital transformation, which is to follow the current Covid-19 crisis, as a key target of EU trade policy. The Communication intends to shape global rules for a more sustainable and fairer globalisation and to focus more on and enforce (apparent) European interests. The environmental transformation shall be promoted to the same degree as responsible and sustainable value chains, digital trade and trade in services. Apart from that, the Commission plans to intensify partnerships with neighbouring and enlargement countries and Africa and to strengthen the regulatory impact of the EU, for example by implementing international standards. A level playing field should be created for EU businesses, and the implementation and enforcement of existing trade agreements should be improved for example by paying closer attention to the adherence to the sustainability chapters.
In doing so, the Commission moves towards an “open strategic autonomy”, which, according to the Commission, will assist the EU in adopting a global leadership role and in shapinge the world according to its interests and values. Furthermore, it has announced that it will defend these values and interests more effectively, both internally andexternally.
Priority given to WTO reform
An important component of the new trade policy course is the support of multilateralism and a rules-based international order, which would take into account the developments of the last decades. Hence, priority is above all given to a comprehensive reform of the World Trade Organisation (WTO). It shall enforce global obligations regarding trade and climate protection, new rules for digital trade and stricter measures on fighting distortions of competition. Apart from that, a binding dispute settlement system shall be restored. The Nigerian Ngozi Okonjo-Iweala, who was chosen to be the next Director-General on 15 February 2021, is not only the first woman to lead the organisation, but also the first Director-General from an African member state. Previously, the election of Okonjo-Iweala as well as the appointment of WTO arbitrators had been blocked by former US-President Donald Trump. Many Member States are now hoping that with President Joe Biden taking office the organisation, which had been weakened for years, can at last be comprehensively reformed.
Chamber of Labour calls for an end to unilateral liberalisation policy
Within the scope of the Consultation AK demanded that by reviewing the EU trade policy lessons should be learned from the Covid-19 crisis , and that it would also mean a fundamental change in the course of trade – moving away from the unilateral liberalisation policy and adopting a policy oriented towards prosperity. Such policy focusses on good working conditions as well as the protection of environment and climate. However, the Communication fails to materialize such a substantial change of course in EU trade policy. Instead, the Commission still appears to prioritize international competitiveness and, with regard to environmental and social issues seems to be content with declarations of intent. Unfortunately, it tries to bypass contradictions and conflicts by avoiding to focus on social and climate change policy interests. However, a truly sustainable trade policy should target exactly these contradictions, name them and react in a target-oriented manner. The EU’s trade policy should focus on the wellbeing of population and planet, not on the private profit interests of individual corporations.