The European Commission (EC) wants to collaborate with US President Joe Biden to reform the World Trade Organization (WTO) and promote multilateralism, but at the same time is aware that it will have to defend their interests autonomously to face challenges such as those posed by China.
The Community Executive presented this Thursday its new commercial strategy for the coming years, taking into account that the European Union (EU) will have to develop in “a world characterized by geopolitical conflict and turbulent economy“According to Commission Vice President Valdis Dombrovskis. The Latvian leader, responsible for the commercial portfolio, defined the strategy in three words:” Openness, sustainability and assertiveness. ”
Brussels wants to defend companies and workers, taking into account that 35 million high-quality jobs depend on trade in the EU and that, in the next decade, 85% of global growth will occur outside Europe, according to Dombrovskis. Therefore, “even if the current crisis fuels tension, looking at ourselves is not the answer,” he said.
Although it also wants to ensure that “it has the necessary tools” to defend its interests in the 46 trade agreements that the EU has with third countries or regional blocs.
Collaborate with the US
Given the challenges posed by China for free competition and the unilateral measures taken by former US President Donald Trump, Brussels wants to collaborate with Biden to improve the WTO, especially your appeal body -now blocked- and thus promote multilateralism. “The transatlantic relationship is the largest and most economically important in the world”, underlines the document, ensuring that “the US Administration provides the opportunity to work together to reform the WTO, including strengthening its ability to address distortions to competitiveness” .
According to the vice president of the EC, the recent appointment of Nigerian Ngozi Okonjo-Iweala as director general of the WTO also represents a “boost” to go in that direction.
What’s more, the EU wants to reach an agreement with Washington to eliminate mutual tariffs imports of steel and aluminum and those related to the dispute over subsidies to Airbus and Boeing. “We can work bilaterally to resolve trade disputes and also at the multilateral level,” Dombrovskis said.
“The rapid rise of China, demonstrating global ambitions (…), has fundamentally changed the global economic and political order. This poses increasing challenges to the global economic governance system and affects free competition for European companiess that compete globally “, assures the strategy presented by the Commission.
The Community Executive wants Beijing to assume “more obligations in international trade” and is aware that the EU must deal with the “negative effects” generated by the Chinese state intervention in the economy. In this sense, Brussels believes that the recent investment agreement signed in December with China – which facilitates investment in the Asian country for European companies – means moving in that direction.
Regarding trade relations with Asia, Dombrovskis also highlighted the EU “commitment” to advance negotiations with Australia and New Zealand.
Agreement with Mercosur
He also underlined the will of the Community Executive to advance in the ratification of the agreement with Mercosur, signed in 2019, after more than 20 years of negotiations. Given the reluctance of the European Parliament and countries such as France, Austria, Belgium or the Netherlands to ratify the agreement, claiming that they do not contain enough clauses to protect the environment, Dombrovskis said that Brussels is holding talks with Argentina, Brazil, Paraguay and Uruguay to try to unlock ratification.
“We are working with the authorities of the Mercosur countries, especially with the Brazilian authorities, to discuss what additional commitments the Mercosur countries can make in the area of fighting climate change and to stop deforestation of the Amazon, so that we can then work towards a successful implementation of the agreement, “he said.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.