Relations between trade policy and foreign and security policy of the EU Vital Moreira Professor at the University of Coimbra MEP and Chair of the International Trade Committee

Different policies, common values and objectives The different faces of the external action of the EU: – CFSP – CCP – Development policy – Neighbourhood policy – External dimension of the sectoral policies (environment, energy, etc.)

Common values and objectives Article 21 TEU 1. The Union’s action on the international scene shall be guided by the principles which have inspired its own creation, development and enlargement, and which it seeks to advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law. The Union shall seek to develop relations and build partnerships with third countries, and international, regional or global organisations which share the principles referred to in the first subparagraph. It shall promote multilateral solutions to common problems, in particular in the framework of the United Nations. (…)

Trade policy The customs union and the common market as the basis of the CCP Trade policy as a core European external policy since the very beginning An exclusive competence of the EEC, later of the EU The commitment to trade opening and the elimination of barriers to trade Competence of the Commission and the Council, until the Lisbon Treaty The decisive role of the Commission in the design and implementation of the CCP

Trade policy after the Lisbon Treaty Enlargement of the scope of the trade policy: services, TRIPs, FDI Legislative codecison between Council and Parliament: the new competences of Parliament Trade policy to respect the same values of all the areas of the external action of the Union The “Europe 2020 strategy” and the 2010 COM policy document on “Trade, Growth and World Affairs”, with a final chapter on “Trade and external relations”

CFSP The creation of the CFSP by the Maastricht Treaty The CFSP as a “third pillar” of the EU, distinct from the “first pillar” (ECC) The Lisbon Treaty and the end of the 3 pillars framework Still, the CFSP as a mostly intergovernmental area of the external action of the EU The new High Representative of the Union for Foreign Affairs and Security Policy and the EAS The decisive role of the Council in the design and implementation of the CFSP

Trade policy as economic external action Trade policy is the external dimension of the economic policy of the Union Trade policy is the economic dimension of the external action of the Union

Diferences between the CCP and the CFSP The metaphor of the EU as a “global trade giant” and a “political dwarf” Features of the CCP: external dimension of the European economic integration process, exclusive competence of the Union, codecision Council- Parliament, QMV in Council, rules-based policy, conducted by the Trade Commissioner Features of the CFSP: late development of the EU, shared competence with the MS, intergovernmental nature, unanimity in the Council as a rule, no codicision powers of the EP, high political discretion, implemented by the High Rep for CFSP

Political dimensions of the EU trade policy Enhancing relations with developing countries, thus “buying” their political support in international affairs Promoting multilateralism (Uruguay Round and DDA, WTO) and regional integration (FTAs with regional organizations of countries, Asean, Mercosur, ACP) Supporting the neighbourhood policy and political stability (vg the Balkans) “Trade and” issues: – Promoting democracy, defending human rights, labour standards – Promoting environmental standards Sanctioning gross breaches of international law

Trade mechanisms to achieve foreign policy objectives Trade preferences, either unilateral or based on bilateral trade agreements Trade conditionality in trade preferences (GSP+, “sustainable development” chapters in FTAs) Withdrawal of trade preferences (Belarus, Sri Lanka) Trade sanctions (Iran, Ivory Coast, etc.)

Overlapping of CCP and CFSP Stand-alone FTAs Stand-alone political agreements “Partnership agreements” with both a political and a trade dimension (Iraq, Ukraine, etc.) The challenges of mixed agreements – Intergoverrnmentalism “versus” community method – Negotiation and ratification procedures Common trade & security issues: trade in dual use gods, trade in fire arms

Propositions (I) Proposition I – CCP and CFSP are two separate, distinctive and autonomous branches of the external action of the EU – CCP should not be instrumentalized by the CFSP through trade measures without any trade rationale (the recent case of the emergency trade preferences to Pakistan) – CFSP should not be sacrificed to trade interests – The special case of trade sanctions for political reasons

Propositions (II) Proposition II – However, CCP and CFSP cannot be mutually inconsistent, let alone contradictory – After the Lisbon Treaty CCP must promote the same values of all the external action policy areas of the EU; it is not any longer a stand-alone policy – CCP should be supportive of the CFSP strategy options, regarding transversal objectives (development, labour standards, climate chance, political stability, etc), as well as geographical partnerships (Mediterranean, Africa, Latin America, etc.) – CFSP should facilitate the CCP strategic options (DDA, major trade partnerships, access to raw materials, energy)

Propositions (III) Proposition III – CCP and CFSP could and should be mutually reinforcing: – A strong political partnership favours trade and economic integration – A strong trade and economic partnership creates conditions for the improvement of political cooperation – Trade multilateralism can pave the way for political multilateralism – Regional economic integration may create the conditions for regional political integration

Conclusion In the trade area, Europe has always been a strong global actor; it remains so notwithstanding the emergence of the advanced developing economies Until the creation of the CFSP, the CCP was the most visible and influential policy in the external action of the EU, being sometimes kind of a “surrogate foreign policy” Even after the creation of the CFSP, trade can still be used, but not abused, to help making the EU also a strong actor in the global political and security arena.

Quote «Our aim is for the EU to play a role in foreign affairs and global management commensurate with our economic weight. Trade policy has its own distinct economic logic and contribution to make to the external action of the Union. Trade and trade policy reinforce the EU’s international influence and concerted action at EU level should pursue and support EU economic interests in third countries. So the Union’s trade and foreign policies can and should be mutually reinforcing.» (COM communication on “Trade, Growth and World Affairs”, 2010)