EU trade politics, Internal EU politics

Trade: the tribulations of the ‘political’ Commission

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Jean Claude Juncker on the election campaign trail to become EU Commission president in 2014. Source: EPP.

The ‘political’ Commission launched by president Juncker, touted as a means to revive the European Union’s standing and the bureaucracy’s effectiveness, has led to paralysis as trade has moved centre-stage in the bloc’s perpetual political crisis, Iana Dreyer opines.

 

The Commission has been operating under a new concept launched by its president Jean-Claude Juncker two years ago: the ‘political’ Commission. At least from the point of view of trade policy, the Juncker method has so far brought decision-making paralysis and bred more anti-EU discontent than ever.

 

The aim of the ‘political’ Commission was to help the EU regain its lustre amidst a rising tide of Euroscepticism following the eurozone crisis. The goal was also to have a Commission capable to handle the member states and the European Parliament adroitly. A political Commission would lose its reputation as a soulless technocratic body governing in an aloof manner far away citizens’ daily concerns.

 

The Commission should become, in the end, a bit like a national government: appointed and accountable to an elected parliament, with members following a national-style election campaign with ‘charistmatic’ Spitzenkandidaten. This artificial mimicry of Germanic parliamentary democracies was meant to make the EU more popular.

 

Another facet of the new political Commission is the centralisation of power around the Commission President. Juncker appointed a layer of seven vice presidents between himself and the traditional Commissioners. This was done in the name of policy efficiency and coherence. But it’s also a means to have Commissioners better toe the boss’ line.

 

Juncker, ushered into power despite the fact that the LuxLeaks tax sweet deal scandal was raging in 2014, clearly thought himself invincible: “I am not someone who trembles in front of prime ministers”, he told to journalists in one of his early press conferences.

 

Trade policy swept by the EU storm

 

Fast-forward two years.

 

The President of the Commission is a weak, increasingly discredited leader who is afraid to act. He is facing accusations of alcoholism, partly blamed for the Brexit fiasco, riled for acting according double standards, for example clamping down on Polish rule of law breaches, not on Hungarian ones not least because the Orban’s party Fidesz is in the European Parliament’s EPP group. Oh and Juncker is potentially hiding an illness.

 

The EU has never been as unpopular. And trade policy is at the heart of the debacle.

 

Trade agreements, previously an area of EU policy that only aficionados were interested in, are one of the key lightning rods for eurosceptic movements and anti globalisation campaign groups. The Dutch rejected an Association Agreement with Ukraine fast-tracked and ratified under Juncker. The Wallonians could scupper CETA, the EU’s most interesting trade agreement ever signed for anyone on the left and the centre-right interested in both freer markets and tougher standards. TTIP? It’s in tatters.

 

The Canadian trade deal was the last blow in a series of setbacks for the power of the new Commission. Only days after bragging in the press that the Commission would present CETA to member states as an EU-exclusive agreement, his power was crushed as this gave time to Berlin and Paris in particular to mobilise against the move. The Commission capitulated to the pressures of a mercurial Sigmar Gabriel and a testosterone-wielding young socialist French trade minister. Macho-statements rebuffed by real macho acting of social-democrats aware they will be losing votes in national elections next year.

 

Like a defeated dog after a fight: Juncker’s political Commission lied down in front of its master. For the first time the Commission suggested all by itself that a trade agreement is ‘mixed’, thus requiring unanimous approval by member states. Instead of picking the fight it is meant to fight – in the name of the higher European interest – and letting the Court of Justice settle the inevitable legal battles with member states. The Commission move on CETA is a sign of extreme political weakness and has set in motion a process of disintegration of a policy that has been the core of the EU since the beginning as well as the EU’s elusive yet at times real ‘soft power’.

 

With CETA we have now four ‘democratic’ processes unfolding, two of them replicated 28 times. Process number one: 28 member states need to give the green light to their governments to approve CETA. Process number two: the 28 need to approve CETA for signature by unanimity. Process three: the signed deal would then go to the European Parliament for ratification. The deal would be provisionally applied then in its core components, and then – process four – ratified again by 28 member states as well as a few more regional legislatures – such as Wallonia. Let’s not forget the potential referenda that might be called on CETA.  And the German constitutional court in Karlsruhe…. CETA has slim chances of getting out of this process unscathed.

 

No wonder the generally staunchly-pro European Greens in the European Parliament have been advocating that CETA should be ratified by national parliaments too. They have preferred giving up on the integrity of the EU as unified actor than giving in on their anti-trade ideology.

 

The CETA process has brought the worst out of ‘democracy’: veto power of minorities over a majority. And member states are thoroughly enjoying it. The trend to renationalisation of trade policy has allowed Romania and Bulgaria to be important for a moment by getting their way on a separate visa issue with Canada via threats to bloc the approval of CETA.

 

There will be more of those episodes in future as both the EU’s ‘underdogs’ like the small Central and Eastern European member states and the big bullies in Berlin or Paris or Rome use every opportunity to score points with their electorates to the detriment of the broader EU interest. The CETA episode has seriously dented the EU’s credibility as a negotiator. If CETA fails it’s over for the EU as serious international actor.

 

Paralysis

 

With the CETA episode, paralysis has set in.

 

The most important files are blocked in the Juncker cabinet and by his vice-president gate-keepers. Juncker has de facto put the decision making process over China’s market economy treatment in antidumping on ice: the pressure from all corners is too high. There’s the pressure to wield the antidumping weapon faster and more frequently and tougher than before. There’s the pressure not to do so. There’s the pressure to grant China market economy treatment, and the the pressure not to. Pressure from industry vs retailors and investors, pressure from the Parliament, pressures from member states, from China, from the US.

 

And there’s Rome. Yes, the decision on China now hinges on a referendum in Rome on a completely different set of matters. Juncker doesn’t want to upset the Italians. That’s what the ‘political’ Commission has come down to. Meanwhile the EU is sleepwalking into a potential WTO dispute settlement case from China.

 

Now it is data flows that Juncker flows is afraid to tackle with member states. The EU is planning to table new language in the Trade in Services Agreement talks in Geneva banning forced data localisations – an increasingly serious problem EU firms, the world’s biggest data movers, face abroad.

 

The Commission’s directorates for trade and justice, despite their differences, did their jobs professionally and worked out a way to make a move in TiSA compatible with the need to protect the privacy of EU citizens now that the EU has a new legal framework on data privacy (the GDPR) and a new deal with the United States on data privacy and flows (Privacy Shield). It’s time to go to the member states with this as a December deadline for TiSA looms. But the file is stuck in Juncker’s cabinet, and parked somewhere by VP Timmermans.

 

The role of the trade commissioner in all this has been reduced to being senior staff –  no longer shaper and major decision maker. But like any hyper-hierarchical bureaucratic system that puts the President on top of all decisions: it breeds paralysis. The bosses’ office gets clogged. And rarely are bosses in big bureaucracies courageous and bold.

 

Two years into his office Juncker has “trembled” in front of many national ministers. Like the defeated dog, the Commission can now expect to receive many kickings from its masters. Because, as German philosopher Nietzsche put it, states are “cold monsters”.

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