The European Union is the world’s leading trading power, ahead of China and the United States. It is also the main provider and recipient of foreign direct investment globally. What has it done with this power?
A very liberal orientation. While it adheres to the multilateral rules of the World Trade Organization (WTO), which it supports, the Union has also circumvented the stalemate in trade negotiations held at the WTO by developing bilateral agreements, where more direct power dynamics are at play. In ten years, nearly 25 agreements have come into effect or provisional application with around sixty countries, not to mention eight new agreements under negotiation and five in the process of modernization. In 2005, bilateral agreements covered less than a quarter of the international trade conducted by member states. This proportion rose to a third in 2017 and could reach two-thirds if all ongoing negotiations result in agreements.
The European trade policy has been subject to numerous criticisms, particularly due to its lack of transparency and democratic control. A detailed assessment of its economic outcomes has never been fully conducted. However, as highlighted by the evaluation commission of CETA (the agreement with Canada) commissioned by the French Prime Minister, “the benefits expected from free trade agreements have in the past been overestimated by their promoters, while the distributive consequences have been minimized and the negative externalities [notably environmental, Editor’s note] simply ignored.”
In response to these criticisms, the European Commission has… developed so-called new generation agreements, covering increasingly broad topics! They mainly target “non-tariff barriers to trade,” meaning health, food, social, or environmental protection standards, which should be liberalized. This has sparked new citizen protests leading to a questioning of the negotiations of a treaty with the United States, while the ratification of the agreement with Canada is still not completed more than four years after the end of negotiations. A trade policy too liberal and highly contested, such is the result of the last decade.
