From Socialist Voice, January–February 2009

“Global Europe”: An open door for big-business lobbyists

The European Commission obviously listened carefully to the demands of large EU corporations, and the final Global Europe Communication has a clear focus on FTAs (free-trade agreements). It establishes criteria for choosing new FTA “partners,” including market potential (economic size and growth), the level of protection against EU export interests (the less protection, the greater the benefits), and whether they are negotiating with the European Union’s main competitors.
     The European Trade Union Confederation warned that the Global Europe strategy said “nothing about the price the EU would have to pay to achieve further market opening in third countries through these new FTAs, in particular in the sensitive sectors of services,” and it called for a broader Europe-wide debate, expressing its “disagreement with the proposed general reorientation of European trade policy in favour of an extremely aggressive liberalisation agenda in developing countries.”
     As the ETUC points out, to obtain its negotiating goals with third countries the European Union will be forced to open up its markets in exchange and might arrange deals that are politically difficult to sell at home. For this reason the Commission enlisted the support of business. In a meeting between the Director-General for Trade, David O’Sullivan, and Business Europe, O’Sullivan “called on business to make itself heard in relation to the content of future FTAs, in particular with respect to ensuring that commercial interests were fully served and the cost to pay in terms of market access of any other objective.”
     Trade unions’ and NGOs’ concerns have gone unheard, apart from some rhetorical references to sustainable development in the final communication.
     Although only consulted superficially within the Civil Society Dialogue, several NGOs (FOEE, WWF and Action Aid) raised “questions on the sustainable development and the lack of development dimension of the paper.” The Commission replied that “this paper did not aim to address specifically these issues.”

An ambitious big-business agenda

Big-business interests have used the Global Europe strategy to push through their ambitions for the liberalisation of investment, services and public procurement and the stronger enforcement of intellectual property rights. Issues that have proved difficult to negotiate at the World Trade Organisation are seen as having a better chance if the European Union throws its weight behind a bilateral deal, or through trade diplomacy.
     Developing countries have every reason to resist, as such deals hamper their own developmental efforts and ruin local business. This is an extremely aggressive agenda that pays little more than lip service to development. The EU plan to use free-trade deals to force concessions on issues that developing countries have repeatedly rejected at the WTO will undermine multilateralism and increase poverty and inequality.
     Enforcing tougher intellectual-property rights will threaten access to medicines in many developing countries, will deny many subsistence farmers the right to own seeds, and will impede domestic businesses from copying the technologies that could help their own development. Deregulating investment, which has been an essential point for Business Europe, will deprive countries of the right to make sure that foreign corporations bring something positive to their countries.
     According to the Financial Times, the Commission is already pursuing agreements on investment in its negotiations for FTAs with India and south Korea. The liberalisation of the services sector was high on the agenda not just for Business Europe but also for the European Services Forum, which includes the largest EU service corporations, such as Deutsche Bank, Goldman Sachs, British Telecom, and Telefónica.
     The ESF has managed to make the worldwide liberalisation of services a priority in the Global Europe Strategy, despite it being overlooked in the 2005 Issues Paper on Trade and Competitiveness. The ESF told the Director-General for Trade at a meeting in January 2006 that it did “not welcome the content of the paper because the service sector has not been included at a sufficient level.”

Hammering home the message

They hammered home that message in meetings and in letters, and the message got through. Both the draft (June 2006) and the final version (October 2006) of the Global Europe communication stress the importance of the service industry in the EU economy and the need to open up markets.
     Available information on the current negotiations with ASEAN, India, south Korea, Central America and the Andean Community of Nations (CAN), as well as “economic partnership agreements” with former colonies in Africa, the Caribbean and the Pacific, show that the Commission is arm-twisting countries to get them to open their service sectors.
     Large EU corporations have also been lobbying for an EU trade policy that helps them secure unlimited access to raw materials around the world. They are worried about the increasing consumption of raw materials by industry in China, India and Brazil and other so-called emerging economies.
     The Commission is now preparing a comprehensive strategy to help EU transnationals by ring-fencing and limiting as much as possible the exceptional conditions in which countries can impose measures restricting exports of raw materials.
     According to Peter Mandelson, provisions for banning restrictions on access to raw materials have been introduced in free-trade agreements with Chile and Mexico, and the Commission is now trying to include them in negotiations going on at present with India and south Korea.
     Mandelson added that countries should not impose restrictions on trade in raw materials, not even to tackle such problems as the strengthening of infant industry, ensuring government revenue from commodity exports, or restricting trade in environmentally sensitive goods, such as timber.
     The Commission is also pressing African and other developing countries to accept its policy regarding raw materials.

Corporate grip on the implementation of Global Europe

The privileged access and undue influence of Business Europe and other large corporate interests is still continuing through the implementation phase of Global Europe. There is evidence, for instance, of how the Directorate-General for Trade shares its insights on the current free-trade agreement negotiations with Business Europe, while refusing to give similar insights to other groups or citizens.
     For example, Business Europe met the Director-General for Trade, David O’Sullivan, and the Commissioner for Enterprise and Industry, Günter Verheugen, in July 2007 to discuss bilateral relations with China and Russia. In its short report of the meeting, Business Europe noted that O’Sullivan had emphasised “the importance of strengthening dialogue with Business Europe to exchange views on negotiations with India, Korea and ASEAN as well as negotiations with China on the new partnership agreements.”

A strategy for market access

Business Europe has also been given access and opportunities to influence the implementation of the new market access strategy, which establishes a partnership between the Commission, member-states and business for dismantling “barriers” encountered by corporations exporting to third markets.
     It facilitates the continuous input of business into decisions over priorities. “Barriers” include restrictions on trade in raw materials, environmental and social regulations, inadequate protection for intellectual property rights, and restrictive government procurement rules.
     Business Europe acknowledged the helpful approach of the Commission and Peter Mandelson. “The European Commission has been very efficient in putting into place the right channels . . . Individual barriers to trade and investment were raised at the highest level during official visits of third countries.”
     Philippe de Buck of Business Europe added: “When the revised strategy was launched, I asked Commissioner Mandelson to act more often as the EU Ambassador for Market Access around the world. I think he was pleased with his new title. At least he took his ‘new duty’ very seriously.”

Negotiations on free-trade agreements

• Negotiations with India, south Korea and ASEAN countries were begun in 2007.
• Negotiations with Central America and the Andean Community of Nations (CAN) were begun in 2006.
• Negotiations with the Common Market of the South (“Mercosur”) began in 2000 but are now stalled.
• Negotiations with the Gulf Co-operation Council were reopened in 2002.
• In 2002 the European Union opened negotiations for “economic partnership agreements” with the African, Caribbean and Pacific (ACP) group of countries to replace the Cotonou Agreement.
     Before the moratorium on new free-trade agreements was agreed in 1999, the European Union had concluded (or was negotiating) a number of bilateral and regional agreements in which political motivations played a large role, including agreements with EFTA countries, agreements with the Euro-Mediterranean Parliamentary Assembly (“Euromed”), association agreements (including free-trade agreements) with Chile and Mexico, agreement with South Africa, and a customs union with Turkey.
     
     To be continued.
     Read more at Corporate Europe Observatory (www.corporateeurope.org).

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