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Talking Points

Is Rising Africa Marginal in Malmström’s Thinking on European Trade Policy?

03-10-2014

Woolfrey, S; Is Rising Africa Marginal in Malmström’s Thinking on European Trade Policy; European Centre for Development Policy Management (ECDPM); 2014

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Negotiations with major developed countries and emerging markets are likely to dominate the European trade agenda in coming years, if the confirmation hearing for the Commissioner-designate for Trade are anything to go by. What does this mean for Europe’s trade relations with Africa?

The public hearings held on Monday 29 September gave the European Parliament an opportunity to grill European commissioner-designate for trade Cecilia Malmström on her priorities for European Union (EU) trade policy and to assess her suitability for the role of EU Trade Commissioner. While there seems to be consensus that Malmström made a very good impression, those hoping that the hearings would provide a clear and detailed account of her intentions with regard to the substance and trajectory of European trade relations with external parties, especially with Africa and the rest of the developing world, were left somewhat disappointed.

A Pathway to Transparency?

As one might expect from a liberal, Malmström was keen to stress the importance and value of trade as a tool for economic growth and development, noting that trade has played a central role in raising living standards in Europe, and that it was likely to become even more critical to the continent as the centres of global economic growth increasingly shift towards emerging economies.

However, Malmström did indicate that opening markets is not an end in itself, and that trade policy should complement EU internal and foreign policy more generally and should be driven by a desire to advance the interests of the whole of society. She also emphasised the importance of greater transparency and public engagement on trade negotiations, but was somewhat non-committal on what this would mean in practice.

What About Trans-Atlantic Trade and Investment?

When pressed to discuss her priorities for EU trade policy Malmström appeared determined not to leave anything out, mentioning Europe’s trade and investment relations with a host of bilateral partners including Canada, China and Japan, while also insisting that the multilateral agenda would be an “absolute priority”. What became clear during the question and answer session, however, is that the trade focus in Europe – or in the European Parliament at least – is very much on the ongoing Trans-Atlantic Trade and Investment Partnership (TTIP) talks with the United States. Many of the questions posed to Malmström related to the potential impact of the TTIP, and to the wisdom of providing for investor-state dispute settlement (ISDS) procedures in the agreement.

For Malmström, the TTIP appears to be a demanding but worthwhile endeavour, especially as it would create opportunities for economic growth and job creation and would provide the two parties with an opportunity to establish global standards in a number of areas. In her view, an ambitious agreement is needed, one that goes beyond tariffs to address services, procurement, investment and regulatory matters.

Responding to criticism from several quarters over ISDS and its inclusion in the TTIP, Malmström indicated that she believed that it was possible to develop a balanced “European” approach to ISDS, which would adequately address concerns about transparency, abuse of the ISDS system and the right of states to regulate in the public interest. Nevertheless, she acknowledged that there was need for more discussion on the issue and was open to the possibility that ISDS might not find its way into a concluded TTIP.

The attention given to the TTIP and ISDS meant that other aspects of the EU’s trade relations did not get much of an airing at the hearing. For anyone interested in development or EU-Africa relations, it was particularly disappointing that, having noted trade’s important role as a tool to combat global poverty, and indicated that trade should be incorporated into a broad foreign policy agenda that encompasses issues such as development, Malmström paid very little attention to the role of European trade policy in promoting economic growth and development in Africa and other developing regions.

When asked by the chairperson of the development committee about her views on linking trade and development, Malmström was vague, noting among other things that development chapters had been included in recently concluded Economic Partnership Agreement (EPA) negotiations with African, Caribbean and Pacific (ACP) states and that getting the Bali agenda of the World Trade Organization’s Doha Round back on track would be a particular priority.

Long Term Prospects?

While she made a passing mention of the need to strengthen Europe’s strategic partnership with Africa, as called for by European Commission President-elect Jean-Claude Juncker, and of her desire to see the conclusion of all the EPA negotiations, Malmström said little else about how the EU might engage with Africa on trade-related issues in the future. Hopefully this was an indication of European trade-watchers’ current preoccupation with TTIP, rather than a sign that Africa is becoming increasingly marginal in Europe’s thinking on international trade.

While Europe has longstanding trade relations with the African continent, the increasing commercial interests of major emerging economies in Africa means that any neglect of these relations may see Europe falling behind in terms of its ability to do business with African economies. Given the growth potential of many African economies, this would not be in Europe’s long-term interest.

The views expressed here are those of the author and not necessarily those of ECDPM

Photo courtesy of European Parliament

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