OPP Trade Blog: Event Summary – Free but fair trade – can Europe find the new formula? (21 March 2018)

Read our inaugural OPP Trade blog post from Wednesday evening’s Rasmussen Global discussion on global trade and investment.

Speakers included:                                                    

  • Jyrki Katainen, Vice-President of the European Commission
  • Marietje Schaake, Member of the European Parliament
  • Anders Fogh Rasmussen, Founder & CEO of Rasmussen Global

As should be expected from a panel of self-professed free traders, there were plenty of points of agreement between the Commissioner for Growth, Jyrki Katainen, former Danish Prime Minister Anders Fogh Rasmussen and Marietje Schaake, Member of the European Parliament. Whether it was Trump, tariffs or Chinese investment, the panel was broadly of the same mind that the world trading framework was under considerable strain.

Despite this, two sides quickly appeared when it came to the subject of the current US administration. Whereas Marietje Schaake took a slightly more hawkish tone on the President, declaring that to engage the Trump administration in any new trade talks would reward bad behaviour (whilst also asking how it is possible when nobody could fathom the inner workings of the White House), Anders Fogh Rasmussen had a slightly different take, saying that the real challenge was China and perhaps it was time to try to engage Trump on a TTIP- deal. A view that may not have been music to the Commissioner’s ears given his later acknowledgment of the difficulties the Commission has when splitting resources between its already outstanding free trade deals and the potential for resource draining negotiations over US tariffs.

With regard to the use of national security as the justification for American measures, Marietje Schaake was particularly sceptical over this approach, instead theorising that it may be a deliberate plot to provoke a showdown at the WTO and a wholesale destruction of the current established order. However, she expressed surprise at her new unlikely allies in Parliament with new-found support for the values of free trade coming from the Greens and GUE/NGL which was only partially undermined by the ENF’s new found objection to responsive tariff barriers. It appears the Trump administration continues to upset all the usual political rules even when on a different continent.

As for the current FDI screening measures making their way through Parliament, there seemed to be a fairly unanimous view across the panel that they were extremely necessary, an opinion which Jyrki Katainen declared was becoming increasingly common even amongst the most sceptical of members states. Keep your eyes peeled on the upcoming Council meeting to see whether his hunch was correct.

In keeping with the general theme of the importance of rules based trade, the Commissioner highlighted that new technologies presented more opportunities to those who did not share the EU’s view on what constitutes fair play. He was keen to stress the importance of FDI to the European economy, but noted that Chinese investment has been highly strategic up to this point with a heavy focus on critical infrastructure and dual-use technologies. This was a view shared by Mr Rasmussen who took the opportunity to point out that he was ultimately a fair trader as well as a free trader and in this regard, some of the investment flowing into Europe didn’t quite fit the bill.

Continuing the China theme, a question from the floor asked whether there needed to be a change in focus, if Trump’s America retreats into protectionism, perhaps China was the EU’s future free trading partner? Here the Commissioner took a very conciliatory tone, both emphasising the wish for further cooperation and engagement whilst also pointing to the difficulties that the EU has negotiating relatively simple investment agreements with the PRC.

In a final plot twist, the discussion briefly turned to the taxation and regulation of digital companies. Here Marietje Schaake was adamant that the failure to regulate at EU level due to concerted opposition from tech companies had led to regulation being imposed at a local level instead. She pointed to the new regulation of Airbnb in Amsterdam as an example of this and noted that these national and regional level regulation caused big problems for the EU’s flagship Digital Single market project.

This blog post was written by Alec MacGregor.

Source: OPP

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