On 25 January, a Civil Society Dialogue meeting on EU Trade Policy (including MC12 update), was held with the Director-General for Trade, Sabine Weyand.

 

Sabine Weyand’s takeaways in terms of the trade and policy developments of the past 12 months:

 

·Pandemic disruption to supply chains and resilience, and realignment of supply chains (just in time to just in case);

·Pronounced role of government intervention in trade to support policy objectives (Green deal / digitalisation) and Covid 19. The increased role of the state has impact on trade relationships with third countries, which have to be managed. Nevertheless, trade will be central to recovery from Covid 19.

 

Achievements by the EU have been:

 

·Resolution of US Steel & aluminium and Airbus-Boeing disputes

·Autonomous controls on FDI screening, anti-coercion etc.

·Level playing field issues: sustainability and deforestation, sustainable corporate governance / supply chain due diligence, as well as IPI, foreign subsidies etc

·Multilateral and bilateral developments, with more FTAs than ever etc

·Enforcement is up and running, and complaints form on the Access to Markets is fully open

·Trade and Sustainable Development review ongoing, as much about the process as the outcome, the final version could be published the very beginning of February (aim is to see what other countries are doing on sustainability in FTAs)

·New GSP (generalised system of preferences) will maintain core features of current approach, revision will strengthen sustainability dimension and civil society participation. Final quarter of the year would see co-legislation adoption of the new GSP.

·On sustainable corporate governance / supply chain due diligence proposal, part of which is dealing with forced labour, question will be to see how it interacts with other obligations being placed on businesses.

·CBAM (carbon border adjustment mechanism) is still going through the legislative process, but already it is having a global impact with countries looking to undertake stronger measures or cooperate (Canada, Japan and Turkey ratified the Paris Agreement). So, it is working as an incentive effectively to address climate change.

 

On the plurilateral and multilateral agenda

 

·Restoring WTO and delivering MC12 remain priorities, especially for agriculture, on trade distorting subsidies and public stockholding. Need to be creative as Covid 19 means that business as usual approach not possible (e.g. possibly using groups of concentric circles of WTO members for discussions).

·Plurilateral agenda has seen good progress here on trade and environment agreements etc.

·FTAs: 2022 will be test on concluding and even ratifying concluded negotiations, and Commission hopes that autonomous instruments will help with the ratification.

·On TSD, the type of instrument will depend on what proposals could come from the sustainability working group, and a suitable vehicle will come forward in times of substance and process (the form depends on the choices of the College).

 

Exchange with participants:

 

·Issue for trade for 2022 is credibility vis à vis citizens and trade partners, this will be the focus. There is serious risk of overestimating the leverage of trade to achieve sustainability objectives, so critical to ensure that what is wanted from trade agreements can be put to negotiation. On many priorities, EC is focusing on its own initiatives (due diligence and deforestation). Own initiatives are ways to reduce pressure on FTAs to deliver everything.

·On Australia, negotiations will take longer, but positively they’ve committed to carbon neutrality but a lot to sort out.

·Concern about retaliation by trade partners especially products heavily dependent on export markets, as a result of the EU’s own initiatives / unilateral action.

·On mirror clauses, Ms Weyand explained that the idea had already been floated, in the context of a France-Netherlands paper, and it is very clear that French presidency are keen to put this to the Agriculture Council. DG AGRI in 2021 undertook to do a study to look at possibility on the mirror clause, with DG TRADE contributing. The study will be delivered to AGRI Council in June. First discussion on this will already take place in February at AGRI Council, as the politics is advancing faster than the study which can’t be rushed.

 

More information: https://trade.ec.europa.eu/dialogue/meetdetails.cfm?meet=11612

 

Contact: Lebo Mofolo, lmofolo@frucom.eu