What does Brexit mean for the EU’s ongoing trade negotiations?

Brexit will weaken liberal voices in Europe, as the EU loses a major political and economic partner with a consistent history of championing free trade, writes Jan Zahradil.

Jan Zahradil is a Czech MEP affiliated to the European Conservatives and Reformist group in the European Parliament.  He is Vice-Chairman of the Parliament’s International Trade Committee.

It is certainly true that discontent with globalisation and mistrust in the EU’s trade (and other) policies were prominent in the UK’s EU referendum campaign. However, the EU reacted with a protectionist stance.

Some EU capitals were keen to punish London out of fear that other countries might follow Britain in leaving whilst maintaining favourable access to the single market. Pursuing this strategy would be damaging for both sides, a more sensible and ‘depoliticised’ approach needs to be found. Taking into account the important trade deficit the UK has with the rest of Europe, one could even argue that the EU needs the British market more than the other way round. We have to respect the choice of the people of the UK and together take sound decisions to determine the next steps.

At the European level, Brexit may, in fact, weaken liberal voices, as the EU loses a major political and economic partner with a consistent history of championing free trade. Trade Commissioner Cecilia Malmström recently emphasised the relevance of the current EU ambitious trade strategy – no changing course after Brexit. Member states would need, however, to redouble efforts to promote open trade and support would need to be established amongst different political groups in the European Parliament.

Widespread concerns about free-trade agreements are understandable. We are negotiating new generation trade deals – these go beyond the elimination of tariff barriers and include discussions on food safety, international standards and consumer protection.

In the case of TTIP, it even has geopolitical ambitions and strategic importance. Citizens want to know if these deals will enable them over the long run to get growth back on track, create new jobs and promote high standards of health, labour and environmental protection.

Opposition is often based on the perception that deals are negotiated in secret, for the benefit of multinational companies at the expense of ordinary people. If we are serious about fighting protectionism, we have to make a more convincing case about the benefits of trade liberalisation. Trade increases spending power especially for those on low incomes and enlarges a variety of goods and services they are able to buy.

We must also be clear about the scope of trade agreements. The Commission has already made considerable efforts in terms of transparency of negotiations but more has to be done. It is clear that the benefits are not evenly shared across the national or EU level. We have to be able to answer the following question: What can we do for those who will suffer from the liberalisation of trade?

There is a broader and more fundamental aspect: Rejection of free trade means that we are on the defensive, we are afraid we are not competitive enough to progress on the global stage. We must spur innovation and find solutions to our economic and social problems. This is perhaps fundamental to how we should fight protectionism.

Protectionism is very much a European and American problem. It is not by any means a global trend. It appeared across Europe long before the UK referendum and Brexit is rather a symptom of it than an underlying trend.

We have to understand that the future of global trade does not depend on our participation anymore. Canada, China, Australia and others are actively negotiating trade and investment agreements.

We can either take the offensive, conclude deals, set new models and standards or stand by and observe others setting conditions for us. We face enormous challenges: chronically slow economic growth (especially in the Eurozone countries), persistently high unemployment and energy insecurity. We are on the defensive and are afraid of partners -China has become a symbol of our fears- that are more competitive.

We have to explain and make clear to our citizens that open trade is a crucial instrument for growth and a way out of these difficult situations that we currently face. Freer trade was one of the engines of the prosperous decades following the Second World War in Europe, America and beyond. We should have the courage and political will to champion it.


Zdroj: EurActiv.com