Effects of the economic crisis on world trade (debate) 
President
The next item is the debate on the oral question to the Commission by Vital Moreira, on behalf of the Committee on International Trade, on the effects of the economic crisis on world trade - B7-0005/2010).
Vital Moreira
author. - Madam President, I am going to put the question on behalf of my committee, the Committee on International Trade, and as the chair of this committee.
The effects of the crisis on world trade indicate a possible 10% decline in 2009. This represents the biggest such contraction since the Second World War brought on by the collapse in global demand. Keeping international trade flowing is vital for the EU and other exports-oriented countries. Despite commitments made by the G20, trade restrictive and distortive measures in response to the crisis have increased within the G20, as well as globally.
The first sub-question is: what steps have been taken by the Commission to tackle such measures and, conversely, have any steps been taken by third countries against any other EU measures to boost economic growth?
The second sub-question: there are indicators that some of the emerging countries that have been less affected by the crisis are becoming drivers of growth in international trade. In this case, EU industry needs to retarget its export markets and possibly the future of its products. What strategy does the Commission intend to pursue to enable EU industry to become more competitive?
Third sub-question: the global crisis and subsequent fall in world trade are having multiple effects on developing countries where the most unemployment is concentrated. What adjustment measures does the Commission plan to take in its trade relations in particular for the poorest countries in the world?
Fourth point: while, on the one hand, large trade deficits are driven by excessive spending and indebtedness in some Member States, including the United States of America, on the other hand, large export-driven economies in certain emerging countries are experiencing trade surpluses. These trade deficits have contributed to global imbalances that are at the root of the global economic crisis. What strategy does the Commission intend to pursue to mitigate such global imbalances in its trade policy?
Fifth and last point: the social impact of the economic crisis and the subsequent fall in world trade are set to outlast economic recovery. For example, we are seeing signs of economic recovery now, but levels of unemployment remain very high. When does the Commission plan to conduct an impact assessment on the impact of the crisis on jobs in Europe and in the developing countries? What strategy does it intend to pursue to incorporate the social and environmental dimension of trade into international WTO rules?
These are the five points that the Committee on International Trade would like to address to the new Trade Commissioner Mr De Gucht, whom I welcome to the floor for the first public exchange of views with Parliament and the members of the INTA Committee, in particular. Thank you in advance for the answers that I am sure you will be able to give to the questions that we are putting to you.
Karel De Gucht
Member of the Commission. - Madam President, quite a lot of broad questions have been asked which would, in fact, deserve much more time than I have.
I suggest focusing in my initial reply on the contribution of trade policy to economic recovery. First, as regards the impact of the crisis on trade, we should be relieved that world trade only decreased by 10%. This did not happen by chance, but is a result of strong political will expressed at various G20 summits. It is also the result of systematic monitoring of trade restrictive measures by the WTO, the OECD and the Commission.
By and large, only a few countries resorted to trade protectionism. The international community thus avoided a protectionist downward spiral of the kind witnessed at the time of the Great Depression. In order to maintain this, it is important to remain extremely vigilant. Where protectionist or trade-restrictive measures are identified, we will take action against them with all available trade tools, such as our market-access strategy or even the WTO dispute-settlement mechanism.
External sources of growth will be crucial to EU economic recovery. I therefore concur with you that European industry should target the new and fast-growing emerging markets.
Through our trade policy, we can help them to achieve this by further opening up these markets and reducing all sorts of barriers to trade and investment.
This will be achieved through the free trade agreements that we are currently negotiating and by deepening trade and economic partnerships with key trading partners such as, for example, the US and China, where the TEC and the high-level dialogue have already laid solid foundations. This will be a priority for me as Trade Commissioner.
Over the coming weeks, the Commission will put together the EU's new common agenda for sustainable growth and recovery via the EU 2020 strategy. This strategy will have an effective external dimension in which trade policy plays a key role.
In a globalised world, the EU 2020 strategy should be a vector to promote openness and constructive international economic engagement. This will also be a central theme of a communication on future trade-policy priorities that I intend to present later this year.
But trade policy is about more than just competitiveness and growth. It is also about projecting our values worldwide and it must also duly integrate the development dimension of trade.
Promoting a strong contribution to development goals is already an important part of the EU's trade policy. The current multilateral negotiations are a development round. We have bilateral and regional negotiations with developing countries and autonomous preferences in favour of these countries. We help them to contribute to, and also tap into, the global economy so as to raise living standards in a way that delivers both greater political stability and social progress.
As regards social issues, I agree that trade must contribute to helping those people in our societies who suffered most from the economic crisis, especially those who lost their jobs. In this respect, I believe that we will need trade - and more trade - to preserve our social system of protection in Europe.
Our European model of society, the combination of a free economy with a high degree of social protection, must be preserved in a sustainable way, and this will take growth.
In sum, the Commission's forthcoming EU 2020 strategy will support a full recovery from the crisis while speeding up the move towards a smarter and greener economy. Open trade policy will be an important element, both as a contribution to European economic recovery and as a vector for the external projection of our principles: openness, social and environmental protection and sustainability, and constructive engagement on the world scene.
Putting the right strategy in place will naturally involve working closely with Parliament as well as the Council and other stakeholders, and I look forward to your cooperation in building a shared agenda.
Christofer Fjellner
Madam President, I, too, would like to start by welcoming the Commissioner. It is a pleasure to see you here. We have high expectations and hopes of you. You have an important task ahead of you.
A year ago, I was extremely concerned. When trade crashed and we were expecting world trade to develop in ways not seen since the Second World War, the situation was very serious indeed. The World Bank stated that 17 of the G20 countries had, in total, introduced 47 new trade barriers and tariffs. Russia imposed tariffs on cars, China restricted food imports, India banned imports of toys and Argentina introduced import licences for textiles and leather goods. It was almost like a protectionist arms race - a pattern from the 1930s that was worrying.
However, no trade war came about. I think it is important to stop and reflect on why that was. I think the main reason was the WTO, the global regulatory authority for trade, which forces countries to behave and not to resort to protectionism and populism. I would say that it is too early to declare the crisis over. The crisis has not passed. We all know that unemployment is highest late in the economic cycle - and it is unemployment that drives protectionism and populism. If we look around us right now, we can see that a number of countries have not yet come through the crisis; perhaps they even have the worst yet to come. I am therefore somewhat concerned when I listen to some members of the Council of Ministers, who do not say much about new markets and free trade but rather criticise globalisation and talk of protecting European companies and European jobs. That is not necessarily protectionism, but at times, they are only a hair's breadth away. It is, in any event, an expression of a mercantilism that I believe to be damaging.
We should instead work together and think about how we can make Europe more competitive by making it more open. That would amount to considered action and leadership on our part. We need to think about what we can do to make sure that there are fewer barriers to trade, not more - especially when it comes to making decisions on Korea and mandatory origin labelling and when there are increasing demands for climate levies. We in Parliament need to reflect on that too.
Kader Arif
Madam President, Commissioner, ladies and gentlemen, Europe is currently experiencing an unprecedented crisis which, beyond the economic and financial crisis, represents first and foremost a crisis of the system.
Even before beginning to deal with the effects of the economic crisis on world trade, which forms the topic of our debate, I wish to clarify one point: trade is not a victim of the crisis; it is also one of its contributing factors.
Indeed, we are currently experiencing a period of huge global imbalances, fuelled, on the one hand, by certain countries' excessive trade deficits at the cost of growing domestic indebtedness and, on the other, by trade surpluses stimulated by the exports of certain, especially emerging, countries with internal consumption that is not growing at the same rate.
Moreover, the trade liberalisation policy conducted thus far has only exacerbated these imbalances, weakening, in particular, the poorest countries on the planet. These countries, which have been encouraged to specialise in export monocultures, have therefore found themselves destitute in the face of extreme fluctuations in the prices of raw materials, the volatility of which has increased as a result of international speculation.
It is a strange world that sets as its first Millennium Development Goal the eradication of poverty and hunger but then, at the same time, speculates on the rise in wheat prices.
However, the very people who defended liberalisation and deregulation at any cost in the 1990s are now finding themselves in a difficult situation as well. The continual rise in job losses, stagnant, sometimes even negative, growth, and the developing social crisis are all factors that mean we can no longer afford to let jobs disappear in the name of this cult. In a period of crisis, how do we explain to employees who are losing their jobs that the main thing is to maintain deregulated trade, even at the cost of sudden and sometimes tragic relocations?
The crisis we are going through is therefore definitely a systemic crisis, to which we must respond with a new development model. In its current Global Europe strategy, the vision developed by the Commission is essentially based on access to the market and the liberalisation of all sectors.
Commissioner, I believe we need to redefine this strategy, which has been on the wrong track and sometimes led to setbacks. It is not by forcing developing countries to open up even more that we will revive our industries' exports. That would only aggravate the situation in those countries, which already accommodate 70% of the 59 million people in the world who lost their jobs in 2009.
On the contrary, it is essential to consider a new strategy that strikes the right balance between openness, protection and support. I would like to return to these ideas. We cannot ignore these developments, which lead the United States to make further use of its trade defence tool or China to take issue with the WTO over European anti-dumping measures.
Indeed, when we are faced with unfair practices, it is clear that protection is necessary, but the principle of it must be accepted and defended internationally and the sometimes false accusations of protectionism dismissed once and for all.
Moreover, the need for support for trade policies is becoming more obvious every day, and such support depends, in particular, on the policies implemented by the Union being genuinely consistent. Consistency in policies is not an intellectual debate, but an absolute necessity if we want to redefine a new development model.
Metin Kazak
Madam President, Commissioner, ladies and gentlemen, the financial crisis has indeed had a detrimental impact on trade in the European Union Member States. For example, in countries like Bulgaria, exports for the first 11 months of last year fell by a whole 24% compared to the previous year, and imports by 35%. Property and tourism are sectors which have been particularly affected by this. This has an extremely powerful effect on employment. Consideration must be given to the sharp rise in business-to-business indebtedness, non-payment of national and local public contract organisations, etc.
The problems presented above are typical of other countries as well. A comprehensive solution is needed for them at EU level, which requires close cooperation between the European Commission's various directorates too. Commissioner De Gucht emphasises the importance of support for expanding European companies' area of activity and opportunities, deploying clear preventive commercial instruments, successfully concluding the Doha negotiations, using new facilities for direct foreign investments and their protection, as well as for a new investment policy against the backdrop of a financial crisis.
The achievement of these aims, along with the successful signing of the economic cooperation agreements with countries from Africa, the Caribbean Basin and Pacific Ocean region, is also closely linked to the recovery from the financial crisis.
However, a number of issues remain on the agenda, some of which have already been mentioned. Are we making effective use of European funding to combat the high level of unemployment? What can the European Union do faced with the current deficit, devaluation of the currency and high inflation, which are having a direct impact on trade? What commercial policy instruments does the European Union have available to tackle the financial crisis and its repercussions? What measures must be taken to avoid the recurrence of a crisis of such magnitude and for trade to continue expanding? What strategy do we have against countries like India and China, which are threatening to change the entire financial system? I am counting exclusively on this Europe 2020 strategy to find these answers.
Yannick Jadot
Madam President, Commissioner, thank you for having put the fantasy of crisis-related protectionism into its proper context. I think that, in the context of a debate, it is wise of you to point out that a world war linked to the revival of protectionism is not about to break out.
Now, I almost want to reverse the issue. For me, the issue is not ultimately about what effects the economic crisis has on trade, but more fundamentally about what effects trade, and specifically the trade policies undertaken for 20 years, have on the crisis we are experiencing today.
In a way, the food crisis that we experienced two and a half years ago arrived before the financial crisis, and it was indeed a crisis of the world agricultural markets. In the same way, we keep being told that liberalising trade with China is good for us. I believe that, at some point, unless we incorporate social issues, monetary issues, fiscal issues and, of course, environmental issues, China will have not just a comparative advantage over Europe, it will have an absolute advantage over it.
It follows that, in all the national debates - and, as a key figure on the Belgian scene, you will know this - all the political parties are now discovering that it is impossible, in a globalised world, to manage social dumping, environmental dumping, monetary dumping and fiscal dumping.
Similarly, we might consider that the strategy that all us Europeans expected after the fall of the Berlin Wall, which was to say 'social democracy will come about through trade', is not working, as we can see with the example of China.
Commissioner, you have cited the Lisbon Strategy, innovation, the green economy, and you know that this European strategy is now a failure. Indeed, if we do not mainstream the Lisbon Strategy before the Global Europe strategy, we may wonder what industrial sectors Europe will still have. Where is the definition of the industrial choices, the agricultural choices, the economic choices and, of course, the social and environmental choices that we are making throughout Europe, so that we can learn how trade works with the rest of the world? Until we define these choices, we shall be pursuing a strategy of failure.
I have a more specific question: on 4 February 2010, a meeting of the WTO's Committee on Trade in Financial Services was held, and it focused specifically on the challenges presented by the financial crisis and the liberalisation of financial services. Can you tell us what the outcome of that meeting was and what your opinion is on this matter, if you were able to follow it?
Jacek Włosowicz
Madam President, in the current global economy, most borders are allowing a more efficient flow of people, capital and services. This, of course, is intended to produce a better standard of living. This is all very well, as long as most countries achieve a positive trade balance and a growth in GDP. The problems begin when the economy slows down, market indices fall sharply and problems start with unemployment. The opening of borders, apart from bringing a better standard of living, has caused a mutual dependence of different economies on one another. This is the other side of the coin. This can be seen clearly in the current situation. For example, the slowing down of the German economy is having a negative effect on the Polish economy, and this is because Germany is one of Poland's key export partners. Fortunately, Poland's GDP is showing positive growth, which is an exception in Europe, but it is worrying that the unemployment rate has been rising for several months. This example shows very clearly that governments should not only think about how to solve economic problems exclusively in their own countries, but they should also come to an agreement about how, together, they can develop defensive mechanisms so that in future, they will be protected from similar situations.
I think the present crisis will be a test for all of us. I am thinking principally, here, about countries belonging to the European Union. We cannot allow a situation in which some countries try to conceal their use of State interventionism, while, in the name of free competition, others are prevented from giving State aid. Of course, I do realise that particular governments may be, in a certain sense, hostages of their electorate, but if we are going to build a European Community for the good of everyone, we must make clear rules and we must keep them. We must also use our strengths - advanced technologies and human capital. Only in this way will further strengthening of cooperation between our countries be effective, and we, as citizens of the European Union, will be able to think of the future in better terms and hope that our (...).
(The President cut off the speaker)
Joe Higgins
on behalf of the GUE/NGL Group. - Madam President, world capitalism is experiencing its worst crisis since the Great Depression. As then, it is the working class and the poor who are paying dearly for, and suffering the consequences of, this, whether in Europe or in the poorest countries on earth.
World Bank researchers predict that, in 2010 alone, 64 million more people will be plunged into extreme poverty by the crisis and that because of it, in 2009, between 30 000 and 50 000 children have already died in Africa of malnutrition. This crisis is having devastating consequences on world trade, but the demand of the United Nations financial summit last year, for example, that the conclusion of the Doha Round of trade negotiations is the answer, is utterly wrong. According to the respected NGO War on Want, that would threaten a further 7.5 million workers with losing their jobs, including in the poorest countries.
This crisis of world capitalism is enormously exacerbated by the activities of the financial speculators on the world markets. Not content with having precipitated the crisis, these parasites now want to exploit it to rake in further billions. Did the EU Commission see the headline in the Financial Times yesterday: 'Traders in record bet against the euro'? But what does the Commission do? It falls on its knees in front of the speculators and demands that the countries worst hit by the crisis, like Greece, make savage cuts in workers' wages, pensions and public services.
What do you think such a draconian programme of cuts is going to do for trade, either in Europe or in the world? If you cut the ability of the working class to purchase goods and services, then you cut demand for those goods and services, which means you cut millions more jobs of workers who would provide them. That, concretely, is the prescription of the Commission. Therefore, the tens of thousands of Greek workers who marched yesterday were absolutely right. Capitalism can only bring more suffering and crisis. We need to replace it with a system of human solidarity, based on the values of democratic socialism.
William  Dartmouth
on behalf of the EFD Group. - Madam President, the great investor, Warren Buffet, once said 'when the tide goes down, you kind of get to see who is not wearing a bathing costume'. Last year, the UK economy contracted 4.8%. So did Italy's. The German economy contracted 5% and EU trade much more so.
I am going to focus on the third question, which is: what strategy does the Commission intend to pursue to enable EU industry to become more competitive?
Well, before there was the Lisbon Treaty, there was the Lisbon Strategy, and in the Lisbon Strategy, the EU intended, and I quote, 'to become the most competitive and dynamic knowledge-based economy in the world'. Now, one prerequisite for a competitive and dynamic knowledge-based economy is to have a flexible work force. So what has the EU done to bring this about?
Well they have brought in the Agency Workers' Directive in 2008 and this has been like pouring glue into the most flexible part of the labour market. The Agency Workers' Directive is yet another ill-thought-out and inappropriate EU directive which has yet again disproportionately and adversely affected the UK, which has a third of all EU agency workers. And, incidentally, it is by having a flexible workforce that you raise people out of poverty.
The EU's series of ill-considered directives stand in the way of a competitive and dynamic knowledge-based economy emerging in the Member States.
The EU economic crisis reveals that the EU has, as it were, no bathing costume.
Béla Glattfelder
(HU) I would like to talk about two issues: the trade deficit and CO2 emissions. The document rightly states that the growth of the trade deficit of the European Union and the United States has contributed to the international economic crisis to a large extent. The trade deficit of the European Union grew from EUR 75 billion in 2004 to EUR 243 billion in 2008. This is a three-fold increase in 4 years. This means that the consumption of each European citizen exceeded produced value by EUR 500. Such a large trade deficit and a consumption that exceeds production to such an extent are not sustainable. Measures are required to reduce the trade deficit, because if we do not do this intentionally, the laws of economy will spontaneously enforce such a change. However, this would incur a much higher social cost. The current events in Greece illustrate this.
As regards energy, world trade is not only distorted by protectionism, but also by energy price support mechanisms. The use of oil is subsidised in a number of developing countries, with oil being available at prices lower than on the international market, while budget resources are also used to support the use of electricity. At the same time, European producers need to pay taxes, carbon dioxide quotas, if they want to use energy in production. Copenhagen made it clear that developing countries wish to hinder a climate protection agreement as they are not willing to accept sanctions related to cuts. Measures are required to prevent this, as several economists have now pointed out that cheap carbon dioxide gives a more competitive edge to China than cheap labour. If we do not reduce energy consumption, there is a danger that again and again ...
(The President cut off the speaker)
David Martin
Madam President, as other speakers have said, the full impact of the financial crisis is now becoming clear. If you believe the Commission, trade dropped by 10% in 2009. If you believe the IMF, it dropped by 12.3% in 2009.
The ILO itself reckons that 212 million people worldwide were unemployed in 2009, a 34 million increase from 2007.
Sub-Saharan Africa, which had a fiscal surplus of 0.3% of GDP in 2008, had a deficit of 6.4% in 2009. In other words a surplus of three billion turned into a deficit of 64 billion, taking 67 billion out of Sub-Saharan Africa's spending power.
All parts of the world have suffered because of this crisis, but the third world, the developing world, has suffered the most. And that is why today Oxfam have today launched a call for what they have called a 'Robin Hood tax'.
This is a variation on the Tobin Tax, which was to tax speculative trade on financial products, stocks, bonds, commodities and currency transactions. The Robin Hood tax represents a tiny 0.05% of transactions, but would raise billions for development projects in the third world.
The Millennium Development Goals need between 34 billion and 45 billion to be met and the banks received a trillion-dollar bail-out. Banks should do more than simply pay back that cash: they should repair the damage they have done to wider society.
So this Robin Hood tax would be a good way to tackle poverty and to ensure that the banks make a socially useful contribution.
Will the Commissioner look seriously at Oxfam's proposal, which has had an indication of support from the British Prime Minister, and put his weight behind it as a European Commissioner for Trade?
Olle Schmidt
(SV) Madam President, our continent is a rich one. The EU must shoulder a particular responsibility for maintaining free and fair trade. The financial crisis is creating a global economic recession that depressed trade by 10% in 2009, as has been stated, such that trade is now at the same level as in 2005. Developing countries are particularly vulnerable when their exports fall and they have problems obtaining bank financing. For the ACP countries, for example, trade in goods represents 50% of their trade. These countries are thus extremely sensitive to crises. A 1% drop in growth results in 20 million people falling into poverty.
Here, the EU must shoulder its responsibility as a rich part of the world and ensure that the financial crisis does not force more people into poverty and exclusion. The EU must work to ensure that the poorest countries receive increased levels of effective aid and debt relief where appropriate. In this context, my friends, I believe that a number of the countries that you come from could do more to ensure that the aid provided by your home countries is increased, improved and made more efficient. We should not always call on the EU; there are some things we can do on the home front.
The most important priority for the Union is that the Doha Round is concluded and that the EU's agricultural policy is quite simply scrapped. It is unreasonable for the rich EU to force out poor farms in Africa through competition. A new free trade agreement would be the best way of taking the world out of financial crisis and preventing protectionism.
The EU can and must act as a beacon for the liberalisation of world trade. Globalisation and international trade are fundamentally positive. Protectionism is an evil and has always been an evil. Those of you who believe that protectionism would teach and help the world in some way should learn from history.
Janusz Wojciechowski
(PL) Madam President, one area in which we should look for ways to fight the crisis is the trade in agricultural products. In recent years, under pressure from the World Trade Organisation, we have introduced many voluntary restrictions on the production and export of agricultural products in the European Union. We carried out, for example, a huge reform of the sugar market, which reduced European sugar production by one third and closed down many sugar refineries. Many farms stopped growing sugar beet, we increased unemployment and did not achieve any social or economic benefits. It was a present for the big sugar concerns, which moved their production out of Europe, and today we import sugar from them.
I think that during the crisis, we should give strong protection to our economy and our producers. I am not talking, here, about protectionism, but about a policy of equal opportunities which, at present, our producers do not have. A variety of high standards are in force in the European Union, for example, in agriculture there are standards for animal welfare. It is right to promote these standards, but we should also require that these same standards be met by those who export their products to the European Union. If, for example, we bring in a ban on battery hens, we should not at the same time import eggs from countries where this method is in use. We should act in a similar way on many other matters. We should observe a simple rule - the same requirements for exporters as for our own producers, because without this, apart from the economic crisis (...).
(The President cut off the speaker)
Jaroslav Paška
(SK) The financial crisis brought on by the US financial sector grew very quickly into an economic crisis which immediately affected all areas of economic life. The inevitable consequences were a rapid decline in consumer spending power, a decline in output, higher unemployment, lower fiscal revenues and less money to finance state budgets.
As output fell all over the world, of course, the value of goods traded necessarily had to drop with the decline in production. If, therefore, we are now asking how to achieve stability or even growth in the volume of global trade, ladies and gentlemen, it can only be through effective measures for halting economic collapse, through measures for stabilising the economy and through the gradual start-up of economic growth.
The current economic system is so interlinked and globalised that, in my view, it is a worthless illusion to rely on limited artificial interventions that target specific sectors and produce no added value.
Iliana Ivanova
(BG) Ladies and gentlemen, the crisis has inevitably led to a significant reduction in global trade volumes. This is also reflected in the drop in production and investment, as well as in limited growth opportunities. At the same time, national governments are strongly tempted to put up barriers to protect their domestic production capacities.
In 2009, we observed an alarming increase in the various forms of national protection used, both in individual European Union Member States and in the new developing economies. This protectionism hampers access to international markets for small and medium-sized enterprises, which form the backbone of the European economy, adding a further burden and restrictions.
In order to overcome these problems and encourage entrepreneurship and trade, I think that Europe needs, above all, a strong internal market. This can be achieved if the European economy is sufficiently competitive, innovative and based on high standards of quality. As also noted by the European Commission, in spite of the progress made, we must continue the efforts to increase the capacity of the educational systems as a contribution to an innovative, dynamic knowledge society.
In my view, stable public finances in the European Union, which will guarantee the sustainability of the national economies and the European currency, are an important prerequisite for overcoming the trade imbalances. The euro's stability is of paramount importance to the trust of our trade partners. A further boost to reviving trade and investment is also provided by the timely implementation of the necessary structural reforms aimed at laying new stable foundations for growth.
Last but not least in terms of importance, I believe that the internal market would also be strengthened by the prudent and prompt expansion of the euro area, which will result in the economic integration of European states and make the European economy even more influential in relation to its international partners.
Enrique Guerrero Salom
(ES) Madam President, as the 2009 figures show, and as has already been indicated, the financial crisis which broke out at the beginning of 2008 has considerably reduced trading figures.
In any case, it seems that we have managed to avoid the serious temptation of protectionism which occurred during the crisis of the 1930s, and it seems that the trend for the emergence of new restrictive measures disappeared at the end of last year. This is demonstrated in the Fifth report on potentially trade restrictive measures adopted by the Commission at the end of last year.
Nevertheless, many countries have adopted these restrictive measures, countries with different economic bases such as the United States, China, Argentina, Russia and Indonesia, but also many developing countries. And it is these countries, the developing countries, which need open markets that can receive their products.
For that reason, I call on Mr De Gucht, in his capacity as Development Commissioner, to work towards broader and freer trade in the world, towards the European Union taking the lead in reducing protectionist barriers in developed countries and to work towards a greater commitment to taking development into consideration in trade negotiations.
Georgios Papastamkos
(EL) Madam President, ladies and gentlemen, I consider that the reduction in world trade has gone well beyond the boundaries of the recession itself. Studies have shown that the lack of financing for trade by the banks is due in large part to the slowdown in commerce.
I should like to ask two questions: firstly, what has become of international commitments on the multilateral financing of trade? And secondly, what results has the more flexible financing framework to facilitate access by undertakings to financing at European level had?
Moving on to global trade, I should like to point out that the rules, disciplines and commitments of the World Trade Organisation have, to a large degree, prevented the use of restrictive trade measures, at the same time providing the flexibility to adopt policies aimed at economic recovery.
However, we call on the Commission to closely monitor the measures adopted by our trading partners and their impact on European exports, including the 'buy national' policies applied by important EU trading partners. At the same time, we must not overlook the dynamic increase in exports by certain emerging economies.
In the present case, I should like to underline in particular the issue of the competitiveness of European products on global markets, which existed before and exist independently of the economic crisis.
Finally, what we need, among other things, is to achieve reciprocity with our trading partners in terms of market access, restore terms of fair competition on the international markets and ensure that imported products are subject to the same rules as goods produced within the EU.
Laima Liucija Andrikien
Madam President, (inaudible) is in a very difficult situation already because of the global recession and the decreasing demand for a number of products worldwide. However, protectionism further hurts international trade and the EU's interests directly.
One of the international trade actors which have enacted additional and counterproductive trade barriers is Russia. Since the beginning of the financial crisis, Russia has imposed a number of so-called 'temporary' anti-crisis tariffs on a number of imports, such as meat and milk products, furniture, and also some steel products. Another instance which may be recalled is the temporary tariff on drugs that Russia has imposed on EU exporters.
What is even more alarming is that, on 1 January 2010, a customs union came into existence between Russia, Belarus and Kazakhstan. As a consequence, a total of 30% of the EU's product lines have seen increased tariffs. The main problem is, of course, that Russia, like Belarus and Kazakhstan, is not a member of the WTO, and is therefore not bound by the WTO rules restricting the unilateral increase of import tariffs and other trade-restrictive measures. Since Russia is not a member of the WTO, we do not have a dispute settlement mechanism with them.
Commissioner, I have two questions for you. How does the Commission assess the current EU trade problems with Russia, and do we have a particular strategy on how to address the issue of Russia's membership of the WTO?
Daniel Caspary
(DE) Madam President, ladies and gentlemen, we have heard on several occasions that world trade has declined dramatically over the last three months, despite the successful attempts by many members of the World Trade Organisation to keep the markets open as far as possible. I am also very grateful that the European Union has played a highly effective role in this respect and has introduced hardly any protectionist measures.
In my country, there is a saying that attack is the best form of defence. I would like to pick up on what Mrs Andrikienhas just said about the specific measures that Russia has taken. We need to ask what effective options we have open to us that will allow us to go on the offensive against those trading partners who have not kept to the agreements made in the G20, who have introduced protectionist measures, who have closed the markets and who have helped to bring about an even greater fall in worldwide economic performance than would otherwise have been the case.
Should we not make more proactive use of our Global Europe strategy and forcefully implement the points it contains? Is it not now the right time to address our interests proactively instead of simply preventing protectionism? I have in mind a possible new initiative which will allow us to make progress within the WTO at last. I think we should take the logical step of negotiating free trade agreements quickly. We have one result in South Korea. However, what has happened with regard to India, Canada, Colombia and Peru? Would we not be sending out a very positive signal if we could make progress on these free trade agreements now?
Many other Members have referred to the developing countries. Is this not the ideal opportunity to bring about some progress at last in the Economic Partnership Agreements so that the developing countries and the African, Caribbean and Pacific countries (ACP) could be better integrated into world trade and so that effective measures could be taken to bring about economic growth and combat poverty? Over recent decades, it has become clear that the states which have taken part in world trade have had the highest levels of growth. I look forward to hearing your answer, Mr De Gucht.
Theodoros Skylakakis
(EL) Madam President, my first comment is that the correlations in our trade relations with rapidly emerging countries are not static. When, for example, there are completely different growth rates between the Union and China, the non-tariff obstacles applied against us, which we considered to be of lesser importance when the Chinese economy was smaller, are having worse and worse results for us as China's relative importance increases and ours decreases.
At the same time, as our relative size decreases, our negotiating power decreases as well. There is therefore a window of opportunity through which the Union can impose its policy and effectively reduce obstacles to our exports in rapidly emerging economies and limit social and environmental dumping. Time is working against us, even more than before as a result of the crisis.
My second comment is that, as the correlations change, the importance of trans-Atlantic trade relations and of promoting a more functional American market which will increase trans-Atlantic trade and give the parties on either side of the Atlantic greater negotiating power increases.
Here, too, there is a window of opportunity, as it will take time to build up the trans-Atlantic market, because it is a complex process. How does the US rate the importance of these relations? Unfortunately, the fact that President Obama will not be attending the forthcoming summit in Madrid is not an encouraging sign.
The question is: does the Commission feel the need for urgent action, while we still have the necessary negotiating power?
Tokia Saïfi
(FR) Madam President, the economic and financial storm we have just gone through has caused a lot of damage. Our economies are disoriented, and we are still struggling today to get back on an even keel in the face of determined emerging powers.
It is now time, European Commissioner, for you to captain an ambitious and meaningful European trade policy that is unapologetically aimed at defending our commercial interests and based on mutual openness of the markets and on the exploitation of our competitive advantages.
The European Union must first of all find a happy medium between ultra-free trade and protectionism. To my mind, this third way must be embodied by the creation of a fair trade framework. The European Union is armed with certain values: respect for the protection of intellectual property, fairness in terms of investments, access to markets, the fight against non-tariff trade barriers and respect for social and environmental standards. Consequently, it has a duty to ensure that these values are accepted as principles by India and China, emerging countries which are not only our customers and competitors, but also our partners.
Apart from the need to establish balanced trade, you must, Commissioner, help to boost the competitiveness of our European companies. How can this be achieved? Innovation, investment in research and development, and the international influence of competitive clusters seem to be some of the key factors that will get us out of the crisis.
We also need to focus our actions on innovative companies, especially SMEs, by relieving them of any excessive administrative and fiscal burdens, and on green technologies and services.
(The President cut off the speaker)
Krisztina Morvai
(HU) We must face up to the fundamental question of whether free trade, the current system controlled by the WTO, is good for the people, or whether we should be contemplating a new guiding principle, which I would rather not call protectionism but economic self-determination? I would like to propose looking at the differences between these two guiding principles in three areas. What does global world trade mean in its current form and volume in terms of creating and preserving jobs in Europe, especially when we think about small traders, SMEs, family businesses and small farms in European countries, which are adrift and have lost opportunities to progress because of the current global, liberalised world trade? If we think of solidarity, is it good for the poor, developing countries that, instead of developing their own agriculture and industry, they are obliged to open their markets? Is it good for the environment that goods are delivered from great distances?
I would like to propose that as an initial step, at least with regard to agriculture and food, we contemplate the introduction of the principle of food self-determination, which means that communities and countries have the right to decide what they want to produce and how they want to produce it, and then how they want to sell it. Consumers are entitled to quality, healthy and nutritious food, and we know that this is not the food that has been shipped from thousands of kilometres away, but the locally produced, locally processed and locally sold food.
Rareş-Lucian Niculescu
(RO) I would like to congratulate the Commissioner on his new appointment. Could he, if possible, give some details about the effects of the economic crisis on world trade in agricultural products? Mrs Andrikienhas already mentioned the case of the Russian Federation, which announced that it is prepared to ban poultry meat imports until 2015, because it covers its requirements from domestic production.
Given that the promotion of a more competitive agricultural system in an open global trade environment is one of the duties assigned by President Barroso to the new Commissioner for Agriculture, I am going to take advantage of the commissioner's presence in the Chamber to ask him how he views the cooperation with his colleague responsible for agriculture in terms of concluding the negotiations as part of the Doha Round.
Seán Kelly
Madam President, firstly, I want to say that the Commission is to be congratulated on rejecting a recent proposal by the WHO that we should ban the sale of duty-free alcohol and spirits. If this was accepted, it would have cost EUR 2 billion to the European economy and hundreds of jobs across the Union. It was a notion based on moralistic preaching rather than on scientific evidence by the WHO and, thankfully, it was rejected by the Commission.
The second point I want to make is that the banks were primarily responsible for many of the ills which we are seeing nowadays, but what happened? A new theory came into being - they were too big to fail. I think, rather than be too big to fail, many of them are too big for their own boots. That is seen in the immoral salaries that some of them are getting and the grotesque bonuses they are also getting. No banker should be getting more than the Prime Minister of his country, and we should work towards...
(The President cut off the speaker)
Czesław Adam Siekierski
(PL) Madam President, international trade, alongside the financial sector, is the area of the world economy which has suffered most as a result of the economic crisis. It is estimated that world trade turnover fell last year by around 10% as a result of the crisis. In addition, the policy of protectionism adopted by many countries as a basic tool for fighting the recession is having a disadvantageous effect on trade. The advantages of free trade in a global economy ought not to need explaining to anyone. It is safe to say that the prosperity which free-market countries achieved in the second half of the 20th century was, in large measure, the fruit of free trade, which developed dynamically in this period. The fall in world trade, the rise in unemployment, especially in developing countries and, with this, the growth of poverty and social exclusion - this adverse trend can be stopped by restoring dynamic trade on fair and just (...).
(The President cut off the speaker)
Michael Theurer
(DE) Madam President, Commissioner, firstly I would like to congratulate you on your appointment as commissioner. We are pleased to see such an astute and successful politician and a well-known Liberal on the Commission. You will need all your powers of persuasion to bring a new impetus to international trade policy in the EU. We must fight against any protectionist tendencies. History clearly shows that countries which have taken part in world trade have enjoyed better growth than those which did not.
We are also facing a new world order. Some of the players involved, for example, China, have State capitalist systems, but may be using quite different methods in this arena. Therefore, I call on the Commission to develop a new strategy for world trade. It is clear that we must move forward with the Doha development round, because a multilateral approach is the right one. However, we will need all our efforts to make progress in relation to China.
Daniel Caspary
(DE) Madam President, I would like to pick up on a subject which two other speakers have mentioned. Mr De Gucht, fortunately you are also responsible for the Transatlantic Economic Council (TEC). I would be very grateful if you could put the TEC right at the top of your agenda, with the aim of solving all the problems that we have referred to.
It is still the case that Europe and the US are responsible for almost 60% of global economic performance. If we could manage to remove only a fraction of the trade barriers on the transatlantic market, we could do much more for our citizens and, of course, for employees than has been achieved by many of the other measures that we have put far more effort into over the last five years. I would be very grateful if you could devote your attention to the TEC.
Karel De Gucht
Member of the Commission. - Madam President, if I were to try to give a balanced answer to all the questions that have been put and to all the matters that have been raised, I would need, I think, at least half an hour. I have only two or three minutes if I understand rightly.
Having said this, let me start with a general remark. I really do not believe that protectionism is a solution. Whether you are a believer or not, looking back into history, it is thanks to international trade that our countries have become prosperous.
Secondly, Europe has a transformative economy, which means that we have to import to be able to export. The idea that we could export without importing is completely false and contradictory to the facts.
So I staunchly believe that we should have free trade agreements with major economic partners, that we should make a success of the Doha Round and that we should further liberalise international trade, but that does not mean that we should not take into account the fact that this international trade also has to be fair and that we are entitled to protect our interests. The Commission is certainly going to do so when necessary and we will use the TDI mechanisms we have to have an impact on what we consider to be unfair distortions of trade.
Some very specific questions have also been asked, by Mr Jadot, for example, on the meeting on 4 February at the WTO and what the result of this was. Well, the main message at that meeting was that the rules of the General Agreement on Trade in Services are not an obstacle to the right of countries to ensure effective financial regulation. The reason is that GATS has a very broad scope for financial prudential measures, so this financial regulation, be it at national or European level, is certainly not contradictory to the GATS rules.
That brings me to the origins of the crisis we are going through. Hopefully, the major part is behind us. I am firmly convinced that it has had a major impact on trade, but that the origin of this crisis lies with financial imbalances which resulted from completely wrong choices by financial institutions. The financial crisis did not originate in Europe; it came to Europe and to the rest of the world from the United States.
I can agree that the food crisis of a couple of years ago, which was still not completely resolved and digested, let us say, has added to big imbalances, especially for the developing countries. You can say a lot about developing countries, about good governance and so on, but you certainly cannot lay the blame on the developing countries for being at the origin of the financial crisis. That is obvious, and they are very severely hit by that crisis, so we should take that into due consideration.
There have also been some questions, the last time by Mr Caspary and one by Mr Jadot too, asking what are we going to do with the TEC and with the strategic initiative for China?
My personal opinion is that the only good response to the economic development of China - which we are not going to stop, by the way - the only good response is to become stronger ourselves. I think that is the only good response.
When you look at this in terms of trade deficit, it is true that the trade deficit with China has gone up considerably, but when you look at the global trade deficit with Asia, this did not go up that much. Also, within Asia, the other Asian countries are facing very fierce competition from China.
So what we should do is become stronger ourselves. I believe that achieving this transatlantic marketplace, for example, is one of the best answers we can give.
We have a recent report, produced at the request of Parliament, which shows that, if you were able to reduce by 50% the non-tariff barriers between Europe and the United States, this would have an effect which would be much larger than the Doha Round. We should work on that, but, having said this, it is not easy at all.
Speaking of the Doha Round, I staunchly believe that we should try to close that round because it has a lot of important features, among them, that the existing tariffs cannot go up any more, that we would be able to close them down. Secondly, there is a strong developmental approach in the Doha Round, provided, of course, that we can keep it as it stands now, and that should be the goal of the European Commission.
There was also the question by David Martin on the Robin Hood tax. First of all, I must say that I like the name Robin Hood much better than Tobin. But apart from that, I fear the Robin Hood tax is facing the same problems as the Tobin tax, that you can only do it if it happens on a global scale. You should also bear in mind that doing this, even on a global scale, would imply a very costly implementing mechanism to put it into place. President Barroso said about the Tobin tax that we are ready to support it as long as everybody else does, and that, of course, is the sticking point in all this.
A last word on - Mr Higgins, amongst others, asked a question - speculation and what came about from that, and also with respect to Greece.
This is not a debate on Greece so I am not going to go into the details of it, but I think, sincerely speaking, that some fault also lies with Greece itself. What you cannot have in a global economy, and what you cannot have in the European Union either, is moral hazard. Being a Member State of the European Union also implies some obligations. So Member States who get into a difficult position - and certainly we are ready to support them and help them whenever possible - should also realise that they have to obey the rules and if they obey the rules, then probably they will not get into the difficult situation they are in now.
President
The debate is closed.
Written statements (Rule 149)
Edit Herczog  
in writing. - (HU) The shrinking of world trade has had a particularly detrimental effect on the countries of Central and Eastern Europe, as the drop in demand primarily affected products which have played a significant role in exports, such as cars, consumer electronics, and so on. At the same time, these countries have also been hit hard by the credit crunch. Boosting exports would be extremely important to ensure that these countries are able to recover from the difficulties arising from this double pressure and the resultant social problems, such as growing unemployment. Financing for exporters seems to be a major obstacle in this area, as payment periods have become longer, credit has become more expensive and more difficult to access, while credit insurance conditions have also deteriorated. This is why programmes should be developed targeting the countries in question, especially EU Member States, to assist them in overcoming these difficulties.
Andreas Mölzer  
The trend for outsourcing in the 1990s has led to capital and also expertise being transferred abroad within the world economy. The fact that jobs have been and are being created in countries with low wages has resulted in average wages falling in Central and Western Europe, which, in its turn, has caused a fall in consumption levels. The consequence of this is that European companies are no longer making the majority of their profits from producing goods, which is their core business. They are attempting to improve their results by means of financial transactions and speculation. This is the point at which we must start. We need to impose a quota on how much ordinary share capital companies can invest in stocks and shares and also on how much of their reserves they can deposit in financial packages in third countries. Secondly, we need regulations for the companies that have suffered damage as a result of the crisis. Thirdly, the economy requires not only fresh capital for the banks, which were one of the main causes of the crisis, but also and, more importantly, new regulations for money transfers, strict guidelines on the sale of credit packages and an independent supervisory body for the new and flourishing trading business, which includes areas such as short selling, that should be banned.
Artur Zasada  
If the forecasts presented just now by Mr Moreira are right, then the predicted decline in world trade will be the biggest since the Second World War. It goes without saying that both Member States of the European Union and countries which do not belong to the Community are taking measures to increase competitiveness and overcome the effects of the crisis. Research carried out by the Centre of Economic Policy Research has shown that since the first meeting of the Group of Twenty devoted to the crisis, 425 legislative initiatives have been undertaken to combat the effects of the crisis. Some countries have resorted to protectionist practices, while others are trying to liberalise trade. In view of the fact that the economy is a system of connected vessels, is the European Commission monitoring legislative initiatives being undertaken both within the European Union and around the world? Does the European Commission, when taking anti-crisis measures, take these into account? As protectionist and liberalising measures accumulate, a situation will arise in which they are mutually exclusive and will have no effect on world trade.
