Denis Tersen, a senior civil servant and trade policy veteran of France, tells Borderlex what to expect from the French approach to trade policy under its new president Emmanuel Macron. Tersen also offers suggestions to ensure trade policy gains back its legitimacy in the European public’s distrustful eye.
With Brexit, Donald Trump and a strong populist movement in France, how will France’s new president, pro European Emmanuel Macron, approach EU trade policy?
Macron’s election is good news for Europe and its trade policy. Since the very origins of EU, trade has been at the heart of the European project.
But free traders should not rejoice too quickly at Macron’s nomination. Macron has no clear mandate from the French voters on both Europe and trade. Scepticism towards globalisation remains strong in the population. The new president will need to take this into account.
The French populist movement is split in two between the far right and radical left. The movement has not succeeded in this election: but the sum total of pro Europeans does not make a majority. Let’s not forget that among the pro-Europeans, those who in the first round of the elections in April voted for Benoît Hamon, the candidate from the socialist party of outgoing president François Holland are not in favour of Europe opening up to the world.
Macron has stated clearly that he is for “a Europe that protects”. His pronouncements on trade policy ahead of the runoff election against the populist Marine Le Pen in early May, calling for more market access reciprocity from its partners, higher antidumping duties, and airing the idea of ‘Buy European Act’, reflect these views. This was clearly in line with long standing French positions, especially on reciprocity. Macron also denounces what many in France think is a ‘naive’ Europe on trade. In Macron’s entourage, there are some who supported CETA and others, such as former environment minister Corinne Lepage or centrist MEP Jean Arthuis, who opposed it.
Macron wants to win over Germany to a more coherent Franco- German line on trade policy.
Q: In a recent paper you wrote for the French foreign affairs think tank IFRI, you say that France must take the lead with Germany in promoting a regulated globalisation. Can you expand?
A: Some colleagues from France’s economy ministry, who chose to remain anonymous, and myself, have taken the initiative of this report given the many challenges the EU’s trade policy is facing.
We are for trade opening and regulated globalisation. The election of Donald Trump, Brexit, prompted us.
So did the difficult ratification process of CETA (the EU’s trade agreement with Canada). The EU’s trade policy is in trouble, if not paralysed. In a situation where Belgium’s tiny German-language community of 70 thousand persons, could veto a free trade agreement, this means our system is in deep trouble.
In our view, trade policy must regain the trust of public opinion. Explaining policy, and ‘teaching’ the advantages of free trade is not enough.
One needs to respond to the first objection to trade policy, which is an objection to globalisation, an objection of ‘the social’ to ‘the economic’. It raises the question of how the winners of globalisation can spread their gains to the losers. It is the big question. No one has yet found a convincing answer to it..
The second objection is ‘democratic’. Citizens criticise trade policy for taking into account the interests of businesses, but without taking onresponsibility when it comes to preserving the future of our planet nor taking into account sustainable development objectives.
Our report also reacts to the election of Donald Trump to the US presidency.
The obvious answer should be to preserve what has been achieved in the multilateral trading system and in the World Trade Organisation. But one needs to go further: Europe must offer its own vision of an open world that puts forward a ‘sustainability’ principle.
Europe needs to continue to move forward, to be on the move. The French-German couple should harness trade policy together.
What struck us is that the parallelism between the European project and European trade policy. During the building of the common market in the 1960s, trade policy took charge of reducing import duties at the borders; when the Single Market was created in the 1980s and 1990s, the WTO was created. This was followed by a movement of ‘deep integration’ in trade policy, seeking to reduce trade barriers ‘behind the border’.
Today, trade policy should focus on sustainable development to gain back public legitimacy.
We looked at the Transpacific Partnership – the trade pact with eleven Asia-Pacific countries Donald Trump dropped on taking power. Washington had obtained from some of its partners so-called ’consistency plans’, allowing the US to reintroduce tariffs if obligations on environment or labour rights are not respected.
This is the kind of mechanism Europe should integrate into its own partnership agreements. Partnership with third countries must go beyond trade. The EU should also introduce mechanisms for technological cooperation in environmentally friendly production.
Q: What should trade Commissioner Malmström’s next steps be?
A: It is important to move forward and conclude the ongoing free trade negotiations that are well advanced, such as the one with Japan. But I think it is necessary to take a break before launching new negotiations and reassess the mandate given to the Commission for the numerous ongoing EU free trade negotiations.
It is a mistake to believe that given the US’ hesitations on trade, Europe should double down on free trade and go much faster. If the US are turning protectionist, it is because globalisation raises questions that have not yet been answered.
TTIP, the transatlantic trade negotiations, should not be revived so quickly. The problems plaguing the negotiations remain, and nothing has really moved on that front. The economic balance of TTIP was not there. There is also a political problem: a partnership, as TTIP is called, presupposes partners who share common values, such as on sustainable development. With the Trump administration, there is evidently a big political problem. Public opinion would oppose this.
Let’s first ensure trade policy contributes to providing an answer to these questions before moving ahead more resolutely on trade liberalisation.
Denis Tersen, previously head of the office of secretary of state for digital technology Axelle Lemaire, has also served as Minister for Foreign Trade Nicole Bricq’s chief of staff. He was also posted in Japan as Minister for Economic and Commercial Affairs at the French Embassy and was a member of Dominique Strauss-Kahn’s cabinet, which he advised on international affairs. Follow him on Twitter.
Denis Tersen is co-author of a paper published by the think tank IFRI entitled With Trump, Time to Reinvent the European Trade Policy.
Denis Tersen talked to Hermine Donceel.