The close of the year and future directions

EPA/ARIS OIKONOMOU

Demonstrator dressed as bloody butchers take part in protests against the Comprehensive Economic and Trade Agreement (CETA), a trade deal between the EU and Canada, in front of the EU Council building, in Brussels, Belgium, 30 October 2016. 

The close of the year and future directions


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This article is part of New Europe’s: Our World in 2017

Belgium -Brussels – At the close of a year which firmly coined the words ‘Brexit’ and ‘Post-Truth’ in our daily lives and dictionaries, it is important to look back and draw lessons from what went wrong – but even more important to look ahead, think strategically, and act decisively. Following the result of the UK referendum, the elections taking place next year in France, Germany, the Netherlands and potentially Italy will have a determining impact on the future of Europe.

We face the arduous task of regaining citizens’ support for the European project and taking decisive action to create jobs and growth, combat climate change and manage the influx of refugees in a proper and humane way. This will require the EU to look inwards (not on institutional balance/structures) and engage in self-reflection on disconnect with the citizens and push through effective reform that increases its effectiveness.

Of equal importance, however, is the broader context in which this effort is taking place. However logical this may sound, so far this wider dimension has not captured the attention of citizens, civil society and political leaders to the required extent.

Of course I am not referring to the advent of Trump as President-Elect for the US given speculation about the implications of his presidency –  for our ability to stand our ground against Russia, effectively combat climate change, find a solution to the crises in Syria and elsewhere – have vastly occupied the minds of politicians and newspaper’s headlines alike.

The future direction to be taken by the US is a question of crucial importance – but it only tells half the story. Over the past years, actors in another region of major strategic importance, Asia, have been increasingly asserting themselves on the world stage and working their way to the top decision table on global governance – China, India and South East Asian countries chief among them. The more isolationist approach heralded by Trump potentially means more room for these major actors to step up such efforts – and impact the rest of the world.

The EU however has yet to step up engagement vis à vis the region. This is of concern given changes in the global political landscape are taking place at a time when we find ourselves in a particularly vulnerable position; when the UK departs, it will take with it a permanent seat on the UN Security Council, its financial centre that plays a key role in the implementation of sanctions as vital foreign policy instrument, and much needed contributions to the European policies on development and defence.

Several issues linked to Asia have been covered in the comprehensive global strategy presented by HRVP Mogherini in June. But when it comes to priorities for implementation, it will be the mood amongst citizens, civil society and political leaders that sets the agenda. Apart from the fact that Asia currently is not exactly high up there, it also appears there is growing push back against free trade and policies connected to globalisation in general – an area in which this region, to the contrary, is rapidly moving forward. 

Many of the concerns that are being formulated in the context of negotiations on TTIP or ratification of CETA are certainly justified; it is of vital importance to ensure that the benefits of free trade are shared in an equal manner across society and that those who carry the burdens are compensated; it is equally crucial to ensure we can uphold high standards on labour, health, human rights and the environment.

Yet apart from getting our own house in order on this, it is also key to reflect on the impact of developments in this field in Asia on our ability to protect these interests.

With the prospect of US withdrawal from TPP and TTIP negotiations similarly in stormy weather, it is increasingly looking like the next big thing in town will be the EU Japan trade agreement and possibly the Regional Comprehensive Economic Partnership (RCEP), a pan-Pacific trade pact pushed forward by China.

RCEP however sets the bar considerably lower on social and environmental protection compared to both TTIP and TPP. Given the China-driven pact would include many of the booming ASEAN economies, other major players such as Australia, India, Japan, Korea and New Zealand, its ability to weigh on the global trade agenda would be significant. The impact of an agreement that creates the world’s largest free trade bloc, accounting for almost half of the world’s population, nearly a third of global GDP and over a quarter of exports, would almost certainly be difficult for Europe to escape.

In this context, it would be wise to step up engagement with governments and civil society in the region in order to ensure our interests are taken on board to the highest extent possible.

This however will require some clout. Therefore it is worthwhile to simultaneously explore possibilities how to keep open all our trade negotiations, harnessing the important steps taken forward in stalled TTIP on reformed investment protection system – a result of joint pressure by the public and progressives in the parliament.

Scoping possibilities to uphold high standards in other fields would be equally advisable – even in the absence of clarity on the appetite for the US to move closer towards the EU on these issues under a Republican leadership with a deregulation agenda. Simultaneously playing on rising public pressure on both sides of the US political spectrum to make trade more fair and Trump’s eagerness to thwart China could help us a long way in making this possible.

A second motivation to move the EU trade agenda forward across the globe is to fight the perception amongst key Asian actors that the EU cannot deliver – a challenge already existing in the region and one that certainly is not in our interest to enhance. Negotiations on a trade and investment agreement with India, to cite one example, have been ongoing for nearly a decade, and the implication of the failure to achieve a breakthrough is increasingly becoming apparent as India is moving closer to its Chinese adversary under RCEP. This would mean a lost opportunity to strengthen ties and create leverage with a country that combines the titles of world’s largest democracy and fastest growing major economy – a capacity that entails significant potential to shape the global agenda on trade, investment and governance in general.

Moving our trade agenda forward is not only important to create jobs and growth and protect high standards; it is one of the few instruments available to the EU to put itself on the map as a partner of value in the region. As tensions are rising in the South China Sea and the Indian Ocean, both of which harbour maritime routes that are crucial for our trade, defending our interests will not be possible unless we step into the void that is likely to be created by the Trump Presidency.

As 2016 with all its change and upheaval is coming to a close, we have a lot of food for thought.

The impact of developments in and relations with Asia on our ability to make the EU deliver is one more element we should add to the list. There is no time to lose to start creating and strengthening those links, given with Brexit upon us the EU stands to lose a country that traditionally played the role of bridgehead to Europe for many Asian countries – especially those who are part of the Commonwealth.

Stepping up engagement with the region will be an important ingredient to help ensure that at the close of the year in 2017 we will be able to toast to more jobs, growth and a stronger EU.

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