/ 18 February 2005

EU ‘czar’ attacks all trade barriers

Peter Mandelson, the European Union trade commissioner, this week launched a fresh onslaught on protectionist forces in Europe and the rest of the world and demanded the dismantling of virtually all barriers to trade in goods and services.

Assuming the mantle of the EU’s competitiveness czar, Mandelson argued in Stockholm that opening up European and global markets as a whole is the key to promoting growth and jobs at home — and fighting poverty in the Third World.

But he coupled his call for trade and market liberalisation with a proposal for a new EU ”reserve fund” to help poorer EU regions hit by the ”shocks” these radical changes will bring — and combat the ”de-localisation” of jobs overseas.

Said Mandelson: ”If we are not serious about opening markets in a way that will stimulate innovation, productivity and growth in Europe then we are not serious about sustaining Europe’s social model.”

His speech in the Swedish capital was seen as an attack on growing protectionist tendencies, notably in France and Germany and the United States in the face of globalisation, though he insisted that this was not the case.

He argues his policy is not about ”letting capitalism rip” or a rightwing attack on sustainable development. ”For me, growth and jobs are the foundation of social justice and the fight against poverty — and we need growth to finance a generous welfare state.

”I am with Lionel Jospin [the former French socialist leader and defeated presidential candidate] who defined the modern left position as in favour of a ‘market economy, not a market society,”’ he said. The former British Cabinet minister, who wants to reinvent European social democracy, argued that trade liberalisation is only politically viable ”with more effective policies to help and equip working families, particularly the less skilled, to benefit from change”.

Mandelson called for tariffs and non-tariff barriers, which put up costs and protect industries from competition, to be removed multilaterally. He said 40% of EU imports came from developing countries — more than the US, Japan and Canada combined — and urged other trading blocs to follow its lead in the reform of the common agricultural policy (CAP) while removing ”trade defence instruments” such as anti-dumping measures.

Arguing that the scale of CAP reform had gone unrecognised, he called for the removal of remaining distortions such as protection for the sugar and dairy industries.

He also claimed that the Bush administration and US Congress openly favoured cuts in American agricultural subsidies as part of a raft of measures to reduce the ballooning budget deficit.

Mandelson also dismissed comments that the Germans and the French are demanding protectionist measures to accompany the proposed liberalisation of EU business and professional services.

Luis Morago, of Amnesty International, said Mandelson was coming out with the right rhetoric on the poorest developing countries. — Â