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Relancer l'Europe : Retrouver l'esprit de Rome - version anglaise

22 février 2017 : Relancer l'Europe : Retrouver l'esprit de Rome - version anglaise ( rapport d'information )

D. BETTER DEFENCE OF EUROPEAN INTERESTS IN INTERNATIONAL TRADE NEGOTIATIONS

Transparency of the trade negotiations must be ensured. This is the very condition of a legitimacy of the trade policy. The European Union must moreover implement an offensive commercial policy, which is a necessary supplement to its economic power.

1. Ensuring a real transparency of the trade negotiations

In the face of a standstill in the multilateral trade negotiations at the WTO, the European Commission has initiated and entered into a number of bilateral free trade agreements known as "new-generation agreements".

Beyond simple tariff or non-tariff reductions, these agreements incorporate provisions on regulatory cooperation and chapters dedicated to sustainable development, social and environmental rights in particular.

These agreements are subject to growing dispute, because of this goal. Jeopardising lifestyles, "cultures" and collective preferences, they raise concerns and opposition among public opinion. Within the European Commission's exclusive competence, the trade policy appears to be reducing the role of the member states and in particular the national parliaments.

Although commercial transactions were and are to remain a source of growth and jobs, new political conditions are needed to address the often legitimate concerns as they emerge: they impose an increased transparency and an EU position more directed towards defending its own interests, within a context of reciprocity and affirmation of a strong Europe.

2. Transparency is essential to the legitimacy of a trade policy

The new trade agreements determine our life styles and our collective preferences. It is this almost cultural dimension that raises concerns and suspicions.

To address this, communication and education are essential and sincere and loyal transparency is required. Transparency directed specifically towards the national parliaments. Their role must no longer be confined to granting their approval, in the final stage, of text ratified in remote places.

The trade policy of the European Union must be subject to regular debates in national parliaments. These parliamentary debates must be held at as early a stage as possible, for example before the adoption of the Council of the negotiating mandate granted to the Commission for the launch of a free trade agreement.

This provided the government with the opportunity to say to its national representation what it intends to withdraw from the future agreement, but also the red lines that should not be exceeded in specific sectors. It is the responsibility of the government to explain the issues, the anticipated benefits and the possible risks that should be prevented during the course of the negotiation.

Transparency must also be guaranteed during the course of the negotiation. French politicians may visit the General Directorate for European Affairs (SGAE) to consult the documents, with differing levels of confidentiality, commenting on the successive negotiation sessions. However, the fact that such documents are only available in English is not acceptable. It's a way of perpetuating a form of opacity, in violation moreover of a rule laid down in the European treaties.

There are two other steps that can now be taken: first of all the performance and the dissemination of prior impact assessments, both in terms of the commencement of negotiations and the provisional implementation of agreements entered into.

Similarly, a systematic policy of monitoring the implementation of agreements, following a certain duration of application. This is currently overlooked, especially as regards the monitoring of sustainable development provisions on social and environmental requirements.

Finally, transparency, which, in a trade agreement, falls within the exclusive competence of the Commission or shared competences. Sustainable clarification on this point is urgently required. The uncertainties surrounding CETA in this respect - whether a mixed agreement or not - has had a very negative impact in the debate.

It is perfectly legitimate that the Trade Commissioner would be regularly heard by the representatives of the national parliaments, particularly within the framework of the Conference of Community and European Affairs Committees of Parliaments of the European Union (COSAC).

Within a context of widespread suspicion in respect of the development of trade exchanges, transparency goes hand in hand with democracy itself. A balanced liberalisation of trade has nothing to hide.

3. An offensive trade policy is a necessary complement to the European Union's economic power.

An offensive European Union strategy is now required so that, as an economic power, it also knows how to assert itself as a commercial power, centred on defending its interests. This approach comprises three sections.

- First of all, the European Union should make full use of the trade defence tools.

Faced with dumping and general state subsidies, which have the effect of distorting the prices of the products of certain exporting countries - in particular China  -, to the detriment of European industrialists and employment, the European Union has suitable arsenal, in compliance with WTO rules. Consequently, to date, the European Union has applied this restrictively. This systematic deduction should evolve.

The European Union should in particular change the method of calculating the Chinese company dumping practices, as China cannot be considered to be a "market economy" justifying the recalculation, downwards, of the tariff defence capabilities of the European Union.

In general, the European Commission decided to modify a policy, which was up until then too benevolent in respect of the customary savings, of these unfair trading practices.

The "lesser duty rule", which was in force until then, must be abandoned, to allow for maximum flexibility.

The lesser duty rule

To justify an antidumping measure, the reality of this practice must be proven and the causal link between this dumping and the injury suffered by the industry. The established antidumping duty thus corresponds to the dumping margin itself, or to the level necessary to eliminate injury. It is this lesser duty role that has always been preferred by the Commission. For example, in relation to the dumping on certain steel products, the average antidumping duty was 21% in the European Union in application of the lesser duty rule, while in the United States, for the same product coming from the same country, it was 261.5%.

Lastly, the free trade agreements all include, in accordance with WTO rules, stabilisation mechanisms or safeguard clauses, in the event of a significant imbalance of the import of goods from partner countries. The case of bananas, in respect of agreements between the European Union and Latin American countries, demonstrated the guilty inertia of the Commission to implement these tools.

- Secondly, the European Union must moreover focus on developing well-balanced reciprocity in the access to public procurements markets.

This was one of the major stumbling blocks in respect of the PTCI with the United States. This was surely the case with Japan. The agreement signed with Canada on this point was the occasion of relative satisfaction, as the degree of openness increased from 10 to 30%.

The situation on this matter speaks for itself: 82% of European public procurement is open to third-country companies, when this proportion is only 32% in the United States and 28% in Japan. Considering the importance of the economic issue for European companies and, in particular, the French SMEs, it is clear that the European Union must modify this approach with an entry without reciprocity.

The European Commission, in 2012, had prepared a forced reciprocity approach, providing for two options: the possibility offered to the contracting authorities to differentiate the external suppliers according to the degree of openness of their countries to the European tenders; the possibility for the Commission to partially close the European market to third-country tenderers or European companies is systematically excluded.

The different approaches between member states has not as yet led to the adoption of a consensual text. As with the tools against unfair trade practices, such a determination is now required.

- Thirdly, the European Union has to take steps to block the extraterritorial effects that the United States provides to their national legislation.

European companies are now exposed to a multiplicity of American rules of extraterritorial jurisdiction, applicable as soon as it is established that there is a link, however tenuous, with the United States, for example because of the fact that the use of the financial or American monetary system is difficult to avoid.

Following BNP-Paribas, which had to pay around 9 billion dollars in penalties as a result of contracts with countries under American embargoes, and Alstom, which was forced to pay 770 million euros in application of the American anti-corruption legislation, Deutsche Bank is currently threatened by a penalty that may reach 14 billion dollars for its role in the subprime crisis. If it were proven, this amount would pose a risk of destabilising the entire European financial system.

Moreover, the resumption of relations with Iran is blocked, despite the agreement on nuclear energy, on 14 July 2015, as a result of the continuation by the United States of bilateral sanctions, for which no company, not even a non-American one can be overlooked.

The fact-finding mission of the National Assembly on the extra-territoriality of American legislation 4(*) valued the amount of penalties recently paid by European companies to the American authorities at 20 billion dollars, on the grounds of international corruption or the violation of economic sanctions imposed by the United States.

Indeed History demonstrates that Europeans have the right oppose American decisions; it is less about law and more about a balance of power. Europe has set the United States back, following the adoption in 1996 by Congress of the laws that sanction non-American countries that have certain economic activities in Cuba, Libya and Iran. There is a proposal to update the European blocking regulation dated 19965(*). This update should be relaunched.

Moreover, Europe must implement its own mechanisms and provide a political and institutional visibility on application of the economic sanctions that it decides by identifying, within the Commission, a mediator specifically in charge of this initiative.

Recommendations for an offensive commercial policy

1. Ensuring a real transparency in the preparations, negotiations and monitoring of trade agreements

- Pursuing and systematising the communications and information measures initiated by the new European Commission; publication of negotiating mandates.

- Sustaining the transparency tools put in place by the Government on the occasion of the negotiation on the PTCI : the strategic monitoring tool.

- Systematically integrating the national parliaments into the various stages of the main free trade agreements:


· Parliamentary debates on the negotiating mandates assigned by the Council to the European Commission;


· access to the classified documents of the minutes of negotiations with their French translation;


· during negotiations, ensuring that the representatives of national parliament are informed on a regular basis by the Trade Commissioner: why not within the framework of a specific COSAC?

- Sustainably clarifying upstream the criteria for the mix of trade agreements.

- Systematising the implementation and communication of impact studies prior to the launch of a negotiation.

- Systematising the implementation and communication of impact studies on the monitoring and implementation of agreements in force, in particular on the provisions concerning sustainable development.

2. Resolutely implementing a strong trade defence measure, promoting the interests of the European Union and taking into account the reciprocity of its partners

- Implementing the various trade defence instruments that the European Union has for combating unfair trade practices: dumping, subsidised savings, cf. China;

- Applying more strictly the stabilisation mechanisms and the safeguard clauses contained in the agreements;

- Requesting reciprocity from trade partners of the European Union accessing public procurement markets; failing that, recourse through a European regulation to the public tender exclusion measures of public tenders of third-country companies do not grant reciprocity;

- A good partnership is incompatible with the extraterritorial application of the legislation of a partner State. The process is contrary to international law:


· Relaunching the update of the existing European regulation against the effects of extraterritorial legislation;


· Identifying, within the Commission, a process of implementing and monitoring the economic sanctions imposed by the European Union.


* 4 Report n° 4082 (5 October 2016) of the fact-finding mission of the National Assembly on the extra-territoriality of American legislation (Mr Pierre Lellouche, President, and Ms Karine Berger, rapporteur).

* 5 Council Regulation (EC) n° 2271/96 of 22 November 1996 «protecting against the effects of the extra-territorial application of legislation adopted by a third country, and actions based thereon or resulting therefrom».