A tougher approach with partners and more focus on climate and labour rights will be key pillars of the new EU trade policy outlined by the European Commission on Thursday (18 February).
The Commission’s executive vice-president responsible for trade, Valdis Dombrovskis, said that the three key words of the new approach will be “open, sustainable and assertive”.
He explained that any future deal will include the Paris climate commitments as an “essential element”.
The EU’s approach could include liberalisation of trade in certain green goods and services, or agreements to reduce fossil fuel subsidies.
Moreover, the Commission is discussing with Brazil “additional commitments” on climate and deforestation in order to facilitate successful ratification of the EU-Mercosur deal, the largest trade agreement the EU has concluded with Brazil, Argentina, Uruguay and Paraguay.
The promotion of sustainable trade practices will also imply “stepping up our support for labour rights”, including the development of rules to combat forced labour.
As previously announced, the EU’s trade chief said the Commission will prepare an instrument to protect the bloc from potential coercive actions of third countries. And it will explore the possibility of an EU strategy for export credits to counter the support given by other partners, including the possibility of an EU export credit facility.
The European Commission’s executive vice-president, Valdis Dombrovskis, told the European Parliament on Friday (2 October) that he will put forward a new mechanism to protect the EU from the coercive manoeuvres of trade partners like US and China.
The EU executive is also working on a legal instrument to address distortions caused by foreign subsidies on the EU’s internal market.
These new instruments will come on top of the proposals adopted last year to bolster its trade toolbox, including a new chief trade enforcement officer to ensure third countries respect their commitments and an upgraded of the EU enforcement regulation.
“This shows our willingness to take a tougher approach. We will follow through”, Dombrovskis said.
The new strategy came against the backdrop of the difficult relationship over the past years with the US and China, Europe’s largest trading partners.
The arrival of Joe Biden to the White House and the conclusion of the new investment deal with China are seen as opportunities to improve the relationship with Washington and Beijing.
Europe has ongoing tariff disputes with the US on steel and aluminium, and as a result of the Airbus-Boeing subsidies row.
As regards China, the Europeans have long complained about the unbalanced economic relationship and unfair practices, including the forced transfer of technology or industrial subsidies.
“The bottom line is simple: whatever challenges the EU and US face, there is no stronger values-based alliance in the world,” Dombrovskis said.
“On China, the EU goal is to restructure our partnership to be reciprocal, balanced and fair,” he added.
The Commission vice-president said the EU has signalled its willingness to the US to address the tariff dispute and to reform the World Trade Organisation, another top priority in the years to come.
He expected to discuss these issues as soon as the new US trade representative is confirmed.
In the case of China, he said the investment agreement “is not a panacea” to address the challenges posed by the country. For that reason, the EU will work with “like-minded partners” like the US to tackle concerns related to human rights and forced labour in the country.