The “We-versus-Them” bias – A critical review of the EU trade policy.

During the most recent High Noon Lunchtime Debate by the Friedrich Naumann Foundation for Freedom, Frank Hoffmeister, the Deputy Head of Cabinet for European Commissioner for Trade, Karel de Gucht, Emmanuel Martin, Editor of Un Monde Libre, and Frederik Cyrus Roeder, Founding Member of the European Students for Liberty, discussed the current trade regime policy of the European Union (EU).

Since 2001 the European Union has shifted away from its primary focus on multilateral trade agreements within the context of the World Trade Organization (WTO) towards bilateral solutions. Due to the not solved dispute between China and the US during the Doha Round, the EU shall also act at the bilateral level to promote trade. “Doha remains the top priority but the bilateral is not the enemy of the multilateral trade agreement”, Frank Hoffmeister quoted the communication of the EU trade commissioner.

Emmanuel Martin wants the EU to rethink the mindset of its trade policy. There should not be a “We-versus-Them” bias, which is built on the assumption that bilateral agreements are always a statement of exclusion of third party countries. So free trade agreements (FTAs) are still a tool of protectionism and hinder innovation as well as development. “FTAs cause economies of complication and bureaucracy. In addition they do not increase trade but channel the flood of goods and services,” Martin said. The Treaty of Lisbon, however, requires that all of Europe’s trade policies adhere to the same guidelines. Since it involves the European Parliament in the decision making process, trade policy is on the one hand politicized, and on the other hand legitimized by elected politicians. With regards to Human Rights issues, Hoffmeister pointed out the EU’s trade policy should “include provisions that allow for the monitoring of Human Rights instead of requiring improvements to Human Rights standards as a pre-condition for the conclusion of FTAs”.

A libertarian view on the topic was presented by Frederik Cyrus Roeder who wants the EU to unilaterally declare a free trade policy towards all other countries in the world and therefore enforce ‘real’ free trade without any barriers and exclusions. This would have a positive impact on the citizens’ purchasing power even though it might jeopardize jobs in currently protected industries. “But subsidized industries, which are not competitive, should be shut down anyway,” Roeder claimed.

The debate shows once more that the two views are not easy to reconcile – the unilateral declaration of free trade, which would – in theory – enforce the wealth in the EU and the pragmatic approach which also takes the reality into account that trade policy, has to go along with job security and creation.

Michael Krug