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  • On trade, let’s not let a crisis go to waste

    By Cécile Toubeau, better trade and regulation directorWHAT WE LEARNED IN 2016: It has been a bumpy year for European Trade Commissioner Cecilia Malmström. No one predicted the UK’s decision to leave the EU. Nor could the polls foretell the outcome of the US election, with Donald Trump winning on a largely anti-trade ticket. Both of these events came in response to the uneven sharing of the spoils of globalisation; a disproportionate share of the gains has ended up with the global elite, while median wages stagnate or decline.

    Mixed in with all this turmoil, the Commission passed the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU, presented as one of the most progressive trade deals ever negotiated. But the agreement fails to meet fundamental provisions that mean it is not a ‘gold standard’ deal for people and the planet. This led little Wallonia to stand up in a very real David and Goliath moment against the Belgian government and the European Commission. Belgium’s southern region was accused of emotional blackmail and holding Europe hostage.

    What lessons can we learn and what are the next steps for European trade policy? Trade in itself is not bad, but what is bad is that the deals Europe negotiates transfer power away from democracies and towards corporations. It starts with tariff reductions; these give multinational corporations haggling power by making relocation threats credible. But new-generation trade deals go further than that by encroaching on regulations. A trade agenda that seeks to develop common regulations between trade partners inevitably puts obstacles in the way of one partner adopting new rules. There’s also the risk of ditching local rules for the lowest common denominator.

    The backlash against the globalisation of goods and people can easily be a first step towards a reversal of the economic integration trend of recent decades. Redefining our trade agreements is an opportunity to refocus trade policy from an environmental and social perspective. While a reformed trade agenda can never bring back the jobs lost in our post-industrial world, it is a chance to build a vibrant, social, sustainable and competitive future.

    The Commission has to grasp this opportunity to transform trade to deliver a form of globalisation that truly works. It should deliver on promises already made and amend its Trade for All strategy. This means negotiating a trade mandate with all three European institutions (Commission, Council and Parliament); making negotiations transparent; holding public consultations on specific provisions; making environment provisions binding and enforceable; removing all environmentally harmful subsidies, such as fossil fuel subsidies; respecting the rule of law without privileging foreign investors over the public interest; and making a trade impact assessment of the final text prior to any ratification.