EU commercial policy seeks to use trade, intended as access to the single market, as an instrument to achieve non-trade objectives. Has this approach been effective? Answering this question has been the focus of Realising Europe’s Soft Power in External Cooperation and Trade (RESPECT), a HORIZON 2020 project hosted by the Global Governance Programme and led by Bernard Hoekman.
On September 27, the members of the RESPECT consortium presented research findings and discussed potential policy implications with the Brussels community, including officials from EU institutions and member states, as well as representatives of the private sector and partner countries’ organisations.
A key message emerging from the discussion is the over-reliance on trade agreements as a tool to pursue non-trade objectives. RESPECT research shows that there is little robust evidence that including provisions on environmental protection, social and labour rights, and human rights caused improvements in non-trade outcomes in partner countries.
This suggests that there is a case to be made for reforming ex-ante and ex-post assessments of trade agreements. This would allow to prioritise which objectives should be pursued in different negotiations and identify baseline indicators to monitor their improvements.
Another implication is the need of recurring to a wider policy “toolbox”. Within the tread realm, the EU would benefit from a “flexible strategy” that combines bilateral agreements with unilateral, plurilateral and multilateral solutions. However, trade instruments will not suffice.
While trade policy can be a hook to promote non-trade objectives, accompanying measures are crucial to attain changes on the ground. These include technical assistance, aid, information sharing, informal dialogues, consultations but also incentives for firms operating through supply chains to monitor production.
These tools are particularly important when considering the linkage between trade and development. “Trade agreements are not a substitute for domestic reforms” and should be combined with a broader set of policies, avoiding a one-size fits all approach. Including partner countries’ institutions, civil society organisations and private sector stakeholders, building on their national reform agenda and regional priorities, is considered a key ingredient for success.
Panelists noted that “trade and geopolitics are becoming completely blurred” and that “more and more often when we talk about trade, we are pursuing a foreign policy goal”. However, the discussion suggested that the approach EU “should not be conditional, but aspirational”. A too stark emphasis on projecting EU values might lead to increased disputes in front of the WTO. Further, overplaying the EU’s power might be perceived as protectionist by partner countries, thus creating resentment and non-engagement.
While people might tend to consider serious societal problems “first and foremost a result of the fact that we are trading with other countries”, a good reminder that came out of the conference is that trade is good for both the EU and its partners. The benefits of openness should not be forgotten, at a time in which assertiveness and unilateralism take up so much space in the public debate.
For more information on the RESPECT project visit their website.