EU as a World Trade Leader

“It is not protectionism that has created prosperity, but trade”. European Commissioner for Trade, Cecilia Malmström, opened the discussion on transatlantic trade with a strong statement on the benefits of open markets.

Can the European Union become a world trade leader? We tried to answer this question at the Ralf Dahrendorf Roundtable “Taking Charge of the Transatlantic Trade: the EU as a Global Leader“.

“The EU is already a world leader on trade”, claimed MEP Marietje Schaake during the panel discussion, to which the rest of the panel, which included Prof. André Sapir (Bruegel) and Luisa Santos (BusinessEurope), agreed.

This is a special time to be a world trade leader. The world trade system is under pressure from both China’s version of state-capitalism with massive subsidies, US tariffs and public opposition against trade. “I cannot remember a time when there was a crisis for the system as dangerous as it is today”, said Prof. Dr. André Sapir, who has 50 years of experience in the field.

The situation requires the EU to rethink both  the multilateral trade system and its own role within that system. On the former, if the EU wants to act as a global leader, it will need to bring the US and China back to the table and negotiate with them. It is unlikely that they will step up to defend the institutional world trade system. Regarding the latter, a big internal market is one of the strengths of the EU. However, global challenges, such as 5G and big data, call for further action from the EU.

Commissioner Malmström also called for rewriting rules. State-capitalism and people that are left behind in the globalisation are issues that need to be addressed, said Commissioner Malmström. It requires a fix-the-system approach rather than a break-with-the-system approach.

As Carl Hamilton writes in the policy brief “Turning the Tables on World Trade“, “it is not enough for the EU and other key WTO members to just focus on being exempt from protectionist policies for themselves only, like exemptions from Trump’s aggressive trade policy in steel.” Liberals should stand up for the values of free trade and open markets, and keep promoting these worldwide. Because becoming a world trade leader is as much about the ideas that you bring as it is about your imports and exports.

Watch the Ralf Dahrendorf Roundtable on trade here.

Read the policy paper “Turning the tables on world trade? here.

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