EU Trade Chief Warns Against Protectionism, Suggests Bloc Can "Fill Void" If US Turns Inward

8 December 2016

EU Trade Commissioner Cecilia Malmström called for the 28-nation bloc to continue its efforts to push back against protectionist policies and better answer and address the concerns raised about globalisation’s impacts, while suggesting that the EU could also “fill the void” should US policy take a more inward-focused approach.

“We are seeing now huge changes in societies. But failing to sign trade deals will not stop globalisation or technological change, at home or abroad. It will just mean that we have fewer resources to manage the change,” said EU Trade Commissioner Cecilia Malmström, speaking at the Alliance of Liberals and Democrats for Europe (ALDE) Party Congress in Warsaw, Poland, last week.

“We liberals, we’ve always been fighting for openness, opportunities – not putting needless barriers in the way of business is a part of that,” she said, calling for the EU to ensure that it takes a role in shaping globalisation, rather than just accepting it.

Indeed, the coming year could prove to be a pivotal one for the European Union, as it faces elections in large member states such as France and Germany. The “Brexit” negotiations between the UK and the other 27 member states are also expected to kick off by late March, unless legal challenges underway in Britain prevent it.

The trade debate in Europe has been especially heated over the past year, as already seen in the process leading up to the signing of the Comprehensive Economic and Trade Agreement (CETA) with Canada. The accord is now being considered at the committee level within the European Parliament, with a plenary vote slated for next February. (See Bridges Weekly, 1 December 2016)

Malmström warns against walls, protectionism

Across the Atlantic, US President-elect Donald Trump is due to take office on 20 January 2017. The incoming leader has not made his views known on EU-US trade, including the prospects for the Transatlantic Trade and Investment Partnership (TTIP). European officials say they expect those talks to enter a “freeze” next year until there is more clarity from Washington. (See Bridges Weekly, 17 November 2016)

Most recently, Trump has reaffirmed his election pledge to pull the US out of another trade accord, the 12-country Trans-Pacific Partnership (TPP), along with warning on social media site Twitter that any US company “that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the US without retribution or consequence is WRONG” (emphasis in original quote).

Furthermore, the President-elect pledged that those companies who engage in those practices and then attempt to sell their goods back to the US will face a tax of 35 percent. The suggestion has reportedly drawn pushback from various House Republican lawmakers.

Without referring specifically to either situation, Malmström told the ALDE conference attendees last week that the EU should be ready to step up to the plate should the US pursue a more isolationist approach in trade negotiations or other international areas.

“Whether that is bad news, I think the EU has the possibility to fill the void. We can show that walls, that protectionism, is not what the world needs right now,” she said.

She also touted the EU’s ability to negotiate strong, values-based deals, while warning that the trade debate needs to become more fact-based, particularly in light of today’s political climate. Furthermore, she suggested that trade plays an essential role in supporting individual livelihoods, broader economic growth, and in testing out new ideas.

“Those who claim that we should prosper and thrive without trade need to explain how we’re going to compensate if we don’t take these benefits. They cannot. That is why I would rather trade in facts than in fantasies,” she said.

ICTSD reporting; “House G.O.P. Signals Break With Trump Over Tariff Threat,” NEW YORK TIMES, 5 December 2016; “EU may fill ‘void’ in global trade left by U.S. under Trump: Malmstrom,” REUTERS, 2 December 2016.

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