KONG The rest of the world may need to look at new ways of
dealing with Europe on trade issues.
The apparent deadlock
over the Doha round of World Trade Organization talks is showing
that the contradictions within the European Union have become a
major global concern. On the one hand, the EU purports to be a
single trading block for the purposes of this and other negotiations
on economic and commercial issues. On the other, it is apparently
incapable of acting as a sovereign power.
Today's impasse must be
seen in the context of the history of the Doha round over the past
three years. In June 2003, France cut a deal with Germany on EU
internal issues that seemed to rule out, for now, fundamental reform
of the Common Agriculture Policy that would enable real progress to
be made with the round. As this column observed at the time: "The
Doha round is rapidly approaching a crisis. The behavior of some
European countries is proving so selfish and shortsighted that key
developing countries may soon come to the conclusion that it would
be better to walk away from the table than carry on with wrangling
over secondary issues while progress on the crucial one of
agriculture is sabotaged."
Three months later those
countries did indeed walk away, frustrated by the attitudes of the
EU and the United States, resulting in the collapse of the Cancun
ministerial meeting. Now, two years on, it is touch and go whether
the ministers will even get to Hong Kong, where the next ministerial
meeting is supposed to be held in December, because of an impasse on
the very same farm issues - though now the fault lies largely with
the EU alone. The reason takes us straight back to that
French-German stitch-up in 2003. The EU is now effectively telling
the world that the talks since June 2003 have been a charade, as
everything to do with farm tariffs was decided in Brussels in 2003.
The arrogance is stunning.
The EU's current trade
commissioner, Peter Mandelson, says that the EU has gone as far as
it can or will go on ending the appalling distortions in farm trade.
At the same time, he himself is under daily attack in France, which
seeks to nullify the modest offers so far made by Mandelson on the
grounds that they go beyond the 2003 agreement.
The world cannot even be
sure that the EU's current trade offer will not be vetoed by its own
Council of Ministers, as France's farmers are demanding. President
Jacques Chirac himself, showing all the instincts of a rural
politician, not a world leader, has joined the chorus of threats to
veto Mandelson's attempts to negotiate with both the United States
and the India-Brazil-China group of major developing countries.
The implications of
France's position go far beyond agriculture. They tell the world
that any attempt to negotiate with the EU is futile if the
antidemocratic veto powers of individual members are to be used to
deprive its commissioners of negotiating authority.
The net result is that
other countries may see benefit in ignoring the EU, instead focusing
on bilateral or regional trade deals among themselves. Ultimately,
they may attempt bilaterals with EU members frustrated by the veto
powers held in Brussels by minority interests like French farmers.
The choice for the EU is
thus between engaging the bigger world outside Europe, or
The EU would perhaps
already be a global laughing stock were it not for two factors.
First, the general unhappiness with the United States over its
Mideast adventures and unilateralist ways. And second, the
shortsighted positions of Japan and Korea, which have kept quiet on
the farm imbroglio as they use the EU to shield their own farm
protectionism from scrutiny.
But the rest of the
world has noted that self-defensive, defeatist attitudes are on the
rise in Europe, as witnessed by such diverse issues as the entry of
Turkey, the rejection of the EU constitution and the results of
recent Polish and German elections.
The immediate danger is
to a wider world that needs the Hong Kong meeting to take place and
Doha to bring agriculture and the new trade players into the heart
of the WTO system. In the longer run, however, the EU's inability to
negotiate effectively with the world will simply be a signal of the
declining relevance of an aging continent whose arrogance is a
transparent mask for fear.
Europe's self-sabotage on
|Philip Bowring |
NOVEMBER 1, 2005