Europe seeks to set global trade rules

President Donald Trump's decision on his first day in office effectively pulled the United States out of the race to frame global trade rules. With Washington preoccupied by an attempt to renegotiate its existing NAFTA treaty with Canada and Mexico, the EU has an opportunity to become the top setter of common business standards in a series of new deals. Still the world's biggest trading bloc, the EU is recovering its self-confidence after a long economic crisis and Britain's vote to leave the union. Now it has much of Asia and Latin America in its sights for trade treaties, while a far-reaching pact with Canada will already enter force in September. Japan turned to Brussels this month to seal a deal on creating the world's biggest open economic area, after being dumped by Trump's scrapping of the 12-nation Trans-Pacific Partnership (TPP) free-trade accord in January. EU trade chief Cecilia Malmstrom – who until Trump's election had been struggling to persuade Tokyo to agree tough trade-offs – acknowledges the change of fortunes. “I do not regard President Trump as a gift maybe, but it is true that many countries have started to look around more broadly,” she told Reuters. “Other countries feel that they need to look out for new friends and other allies, so yes, it has increased interest in cooperation with Europe and with others.”Import tariffs are already low between developed economies, so negotiations now focus more on agreeing common standards. The aim is to make it easier and cheaper for firms to do business in differing markets, avoiding the need to tailor-make products to meet varying local rules, be they for cars or cheese. While China is seeking greater influence, the battle has largely been between US and EU standards as a template for deals governing how goods and services are bought and sold. Beijing may yet rival Europe provided it embraces a rules-based global trade order in the years to come, economists say. But in the meantime, the EU is pushing to conclude deals this year not only with Japan, but also Mexico and the Mercosur group led by Brazil and Argentina, while pressing ahead with Australia, New Zealand and Asian countries including Malaysia – also left high and dry by the TPP collapse – and Indonesia. Europe is still struggling with low economic growth and high unemployment, and the EU's share of global trade in goods and services has fallen to 16.8 percent in 2016 from 18.8 percent a decade earlier, according to EU data. Unless the EU can reverse the trend, it risks losing its top spot when Britain – the world's fifth biggest economy –departs in 2019. The US share of global trade was 15.0 percent last year and China's was 13.4 percent. So Brussels is pinning its hopes on a boost from new treaties, even though these take time to negotiate and win legislative approval – especially in a bloc which will still have at least 27 member states after Brexit. If all goes well, the EU's existing and planned pacts will link markets of more than two billion people producing nearly half of global economic output. This excludes stalled negotiations with the United States and India. The United States' existing trade treaties encompass a third of world output and fewer than 700 million people, with no new deals near completion – although Trump says he wants to clinch one with Britain when it leaves the EU. Remarkable DealIn trade talks, the biggest economies largely get their way in setting common standards, so a string of new agreements could make EU rules the benchmark for everything from selling farm products to running tenders for public works contracts. That would benefit EU firms, which already comply with the bloc's rules, while those from other countries would have to adjust to new sets of regulations. Even Japan has agreed to align its standards for cars and parts produced by its motor industry with those used by the EU.– Nampa/Reuters

Europe seeks to set global trade rules

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Republikein 2025-05-07

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Europe seeks to set global trade rules

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