The European Commission presented on February 18 a new trade strategy entitled “An open, sustainable and committed trade policy” for the coming years. According to the Commission, “The strategy reflects the concept of open strategic ownership, based on the EU’s openness to contribute to economic recovery by supporting the green and digital transformation, as well as a renewed focus on strengthening multilateralism and reforming global trade rules to ensure that they are fair and sustainable. Where necessary, the EU will take a tougher stance, including through new tools to defend its interests and values.” In the relevant document, the EC concluded that “the EU’s trade and investment relations with China are both important and challenging.”
Commenting on this new strategy, EU Trade Commissioner Valdis Dombrovskis said, “The challenges we face require a new strategy for EU trade policy. We need open, rules-based trade to help restore growth and create jobs in the wake of the new crown Epidemic. Likewise, trade policy must fully support the green and digital transformation of our economies and lead global efforts to reform the WTO,” he said. The new strategy, he said, “should also give us the tools to protect ourselves when we face unfair trade practices. We are pursuing an open, strategic and assertive course that emphasizes the EU’s ability to make its own choices and shape the world around it through leadership and engagement, reflecting our strategic interests and values.”
According to the EC, the strategy is based on a broad and inclusive public consultation that included more than 400 submissions from stakeholders. The EC noted that “to address current challenges, the strategy prioritizes major reforms of the World Trade Organization, including global commitments on trade and climate, new rules for digital trade, enhanced rules to address competition distortions, and the restoration of its binding dispute settlement system.” It said, “The new strategy will strengthen the capacity of trade to support the digital and climate transitions. First, by contributing to the achievement of the goals of the European Green New Deal. Secondly, by removing unjustified trade barriers in the digital economy and reaping the benefits of digital technologies in trade. By strengthening alliances such as the Transatlantic Partnership, coupled with a greater focus on neighbouring countries and Africa, the EU will be better able to influence global change.”
The EC stressed that “at the same Time, the EU will take a tougher and more decisive approach to implementing and enforcing its trade agreements, combating unfair trade and addressing sustainability issues. The EU is stepping up its efforts to ensure that its agreements deliver negotiated benefits for its workers, farmers and citizens.” In a communication sent by the EC to the major EU institutions, it was noted that “with new internal and external challenges, in particular the new and more sustainable European Green New Deal and the growth model defined by the European Digital Strategy, the EU needs a new trade policy strategy.” The EC said, “Global uncertainty is rising, fuelled by political and geo-economic tensions. Rather than international cooperation and multilateral governance, there is growing unilateralism, which undermines or bypasses multilateral institutions. These trends are rooted in a number of developments.” In the EC’s view, the three main causal factors include, first, globalization and technological upgrading; second, the rapid rise of China; and third, the issue of climate change.
Covering the China part, the EC stressed that “secondly, the rapid rise of China has demonstrated global ambition and pursued a unique model of state capitalism that has fundamentally changed the global economic and political order. This poses increasing challenges to the established global economic governance system and affects the level playing field for European companies globally and domestically.” Speaking specifically about economic and trade relations with China, the briefing noted that “the EU’s trade and investment relationship with China is both important and challenging. The EU’s policy is based on a combination of active engagement at both bilateral and multilateral levels, and the simultaneous development and implementation of autonomous instruments needed to protect the EU’s fundamental interests and values, in full compliance with its international commitments.”
The briefing states that “building a fairer and rules-based economic relationship with China is a priority. Ensuring that China takes on more obligations in international trade and at the same time addressing the negative spillover effects caused by its national capitalist economic system will be central to the EU’s rebalancing of bilateral trade relations. Negotiations on a Comprehensive Investment Agreement (CIA) were recently concluded at the political level. The Investment Agreement is part of these efforts. The ratification of the Agreement will require a clear timeline. Ratification of the Agreement will require clear engagement in the effective implementation of the Agreement, market access, level playing field commitments and sustainable development aspects.”
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