Interview with Cecilia Malmström

 

Now that the dust of the US Presidential elections has settled, the results are sinking in. How will the outcome of the elections influence the trade relations between the EU and the US? And on what basis can we strengthen the transatlantic ties? 

With the transition effort still ongoing, I wouldn't say that the dust has settled just yet. Right now, we can only speculate what Donald Trump's election will mean, as US trade relations with Europe and future negotiations surrounding TTIP were basically not mentioned during this election campaign. However, President-Elect Trump has been very outspoken against free trade agreements such as NAFTA and TPP. He has never mentioned TTIP but has spoken in favour of a bilateral deal between the US and the UK. I would say that it doesn't appear as though EU-US trade relations are at the top of his list of priorities for the time being. It is safe to assume that TTIP will be on hold for some time. The reasoning behind TTIP is still sound – strong transatlantic ties and an open exchange between the world's two largest economies is in both of our interests. If the US would begin to apply more protectionist measures it would be bad news for free trade also on the global scale. At this point, we simply have to wait and see what Donald Trump's tenure has to offer before we can draw any definite conclusions.

 

With the signing of CETA, the European Commission negotiated a landmark agreement that sets a new standard for global trade. How can we keep this momentum going and build on this achievement?

While it proved to be quite the challenge, in the end we managed to have CETA signed and it is now hopefully soon going to be voted in with a strong majority by the European Parliament. CETA is an ambitious, modern, and progressive trade agreement which will have a real impact on our exporters, entrepreneurs and workers. Considering the tangible benefits that trade deals like this will provide, it is indeed very important that we keep up the pace and progress of European trade policy. We are currently negotiating with over 20 countries and regions, including Japan, Australia, Mexico and the Mercosur bloc. However, we have some homework to do internally – our partners in the world who watched the CETA process unfold a few weeks ago may understandably have some questions about our overall ability and efficiency in striking a deal. Therefore, it is essential that we all learn from the process and work hard to ensure that it can run a bit smoother next time round. This means having thorough, collective discussions on how the Commission can reach out at an early stage, but also how Member States can engage with parliaments and citizens very early in the process to pre-empt these problems from arising in the future. Transparency and inclusiveness will be key, but also a constant engagement by all of us who believe in the benefits of free trade.

 

The Commission recently presented a proposal for a new method for calculating dumping. Why is this necessary and how will this initiative shield manufacturers from unfair competition? 

The EU needs to ensure that its trade defense instruments remain effective in dealing with significant market distortions in certain countries that can lead to industrial overcapacity, and that encourage exporters to dump their products on the EU market. These are serious issues which cause damage to European industries and ultimately can result in job losses and factory closures, as has been the case recently in the EU steel sector. This new method for calculating dumping is country-neutral and does not grant "market economy status" to any country. Several criteria will be considered in determining these market distortions, such as state policies and influence, the widespread presence of state-owned enterprises, discrimination in favour of domestic companies, and the independence of the financial sector. With this proposal, the EU will live up to its WTO commitments and – once adopted by the European Parliament and the Council – it will ensure that the EU's trade defense instruments are well adapted to our legal and economic realities, capable of facing new challenges head-on.

 

The signing of CETA was a bumpy ride and similar issues may arise when ratifying other agreements. How can we make sure the EU stays in the driving seat when it comes to shaping globalisation and setting global standards?

Yes, getting CETA over the line was indeed a bit of a bumpy ride but this is a natural consequence of a democratic process which involves 28 countries. The economies of the EU are among the most open in the world, with European companies also among the most active on international markets. This openness has helped Europe become one of the most prosperous parts of the globe, with generous public services and advanced social welfare, and has enabled us to develop strong trade relationships with other countries. I would say the best way for the EU to shape globalisation is to continue working together with our partners to conclude progressive, state-of-the-art trade agreements that uphold our values and set standards for global commerce that are in accordance with our principles. The Commission has been negotiating trade agreements on behalf of the EU for decades, and successfully so. It is a European competence enshrined in the treaties. We need to have a discussion with the member states, the European parliament and the national parliaments on how we in the future can maintain that European strength while ensuring trust and legitimacy.

In the past, trade agreements were not particularly controversial. Today, the opposition against trade deals is part of the reaction against the economic crisis, and a general mistrust in the benefits of globalisation. In terms of growth and jobs, trade simply works – we know this from experience. But we need to keep two things in mind at the same time. We have to make sure that citizens who are affected by the downsides of globalisation have safety nets to rely on, in terms of skills training or other programs. And there are many aspects of trade deals that we need to discuss at length in the public debate in order to get them exactly right – our recent debate on investment protection is one such example. However, on both the left and the right side of the political spectrum, there are those who have been quick to exploit the genuinely-held fears that many people have of globalisation. These days, it is more common to hear calls for closed borders than open ones, but turning ourselves inward can never be the solution. If we don't succeed in brokering trade deals, somebody else will set the rules and standards that we then will have to follow.

 

06. Dec 2016 by Intern

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