The European Parliament adopted a resolution based on the own-initiative report by Daniel CASPARY (EPP-ED, DE), in response to the European Commission’s communication entitled ‘Global Europe: competing in the world - a contribution to the EU’s Growth and Jobs Strategy’. The report was adopted by 403 votes in favour to 273 against with 8 abstentions. Parliament welcomed the Commission's Communication on Global Europe and agreed with the strategy to influence positively the process of globalisation and to manage risks. However, it considered that the development of trade was not an end in itself, but must be assessed in the light of its impact on economic growth, employment and sustainable development. An analysis of European economic competitiveness, instead of solely focusing on trade figures, should also focus on the proportion of total world output achieved by European producers and on employment trends. In addition, the EU's negotiating objectives in trade negotiations must be consistent with EU development policy, with particular care taken in the case of LDCs and developing countries.

Parliament intended to work towards greater consistency in its macroeconomic policies, improved monetary and financial security, cooperation in tax matters and the elimination of unfair tax competition. Firstly, it was necessary to pursue a monetary policy based on price stability so as to be able to finance technological progress and to assist SMEs by enabling them to enter markets outside the Euro-zone; secondly, to establish business-friendly taxation systems that are likely to increase the number of start-ups and, to that end, to cut taxes that undermine efficiency and impede job creation; and, thirdly, to increase competition on the internal market , bearing in mind that the fiercer competition is within the EU, the more able EU-based companies will be to compete outside the EU.

Parliament was convinced that the social model that remains at the base of European industrial relations had enabled the EU to maintain a high degree of global competitiveness vis-à-vis its main competitors. The biggest challenge facing the EU was to uphold the functioning of that social model despite existing pressure to further lower the social and environmental costs of production. Since the benefits of an open trading system outweigh its potentially disruptive impact, the EU should strive to complete the single market, promote increased global liberalisation and free trade and resist protectionism. However, its potentially disruptive impact on certain sectors and regions, such as the effects of displacement and relocation, could not be disregarded. Increased competition should prompt the EU to boost its efforts in education and in research and development in order to maintain its position on world markets for innovative products and highly skilled services. In spite of external competitive pressures, the EU should also maintain a sufficiently wide and diversified industrial base , and trade opening should be accompanied by solid industrial policies at both European and national levels. The backbone of the EU's economic success is the activity of its SMEs which, through improved access to research and development opportunities, must be endowed with the ability to guarantee the production of high quality goods at the higher end of the value chain.

With regard to the world trading system, Parliament felt that the lifting or significant reduction of high tariff and Non Tarrif Barriers maintained by emerging economies to EU exports should be one of the main priorities of EU trade policy.

On the WTO , Parliament felt that achieving an ambitious and balanced outcome of the DDA negotiations was crucial for European companies and should be considered a priority by EU negotiators. Since it is a development round, the EU's new trade agenda must reflect those objectives.

Since achieving an ambitious, development-oriented outcome to the DDA negotiations must be the EU's first priority, Parliament regarded bilateral and regional FTAs as a sub-optimal solution. Such agreements lead to trade diversion, are often unbalanced, contribute to introducing discrimination in international trade relations, and tend to reduce the level of engagement of participating countries in the WTO. New bilateral or regional free trade initiatives should only be launched when necessary to improve the competitive position of EU exporters on crucial foreign markets, especially in cases where other major trading powers are negotiating such agreements. The Commission must take into account the risks of excluding the weakest trading partners from the benefits of international trade and their interests must be taken into consideration during the entire negotiation process.

Parliament gave an indication of general approaches to trade negotiations , and stated that the implementation of fair trade policies by the EU and all its trading partners would have to place greater emphasis on the international recognition of minimum environmental standards that create a level playing field between all the partners.

Parliament felt that the EU needed to diversify its economic relations. In addition, the strengthening of transatlantic economic relations must proceed on the basis of compliance with the EU's environmental and public health rules, and must not compromise the independence of its competition policy and its rules on the protection of public services and cultural diversity.

Parliament went on to insist that China should comply with all its WTO obligations, such as the enforcement of international labour standards and the protection of intellectual property rights (IPRs). Inadequate protection of IPRs represents one of the greatest challenges facing the EU in its bilateral relations with the Chinese authorities. China should fully respect the TRIPs agreements and improve the enforcement of judgments handed down by the courts. Respect for patents and the defence of IPRs lie at the heart of the EU's external competitiveness, and Parliament felt that the EU should adopt a more resolute stance in its approach towards third countries in that connection. Counterfeiting and piracy result in job losses, undermine innovation and deprive governments of tax revenues. Adequate IPR protection and effective enforcement are the bedrock of a global economy.

Stressing the increasing relevance of regulatory issues in international trade, Parliament felt that the most effective way to avoid regulatory divergences, resulting in the creation of obstacles to trade, lay in the development of global rules and standards. It encouraged the Commission to participate in the work of all relevant international agencies and standard-setting bodies.

Parliament moved to call on the Commission to pursue, in all trade negotiations, both the progressive and reciprocal liberalisation of services and a policy of increased standardisation of rules concerning that sector, in order that the highly competitive European services sector might operate more freely in third countries. However, this should neither lead to offers nor requests in the area of public services . The latter should be kept out of all negotiations, particularly in the case of public services which address people's basic needs and provide access to essential "public goods" such as health, education, drinking water and energy and those which play an important role in preserving cultural diversity, such as audiovisual services.

The large degree of openness of EU public procurement markets is not matched by commensurate access in favour of EU suppliers, particularly SMEs, to foreign public procurement markets for goods, services and construction contracts. Parliament felt that the Commission should work towards reciprocal access in relation to developed and emerging economies in that important economic sector. It urged the Commission and the Council to insist on inserting in the GPA being renegotiated at the WTO a clause enabling the EU to give preference to SMEs when awarding public procurement contracts, along the lines of those already applied by other major States which are party to the agreement, such as the United States and Japan.

With regard to customs , the excessively complex import procedures applied by many countries in the world often entail significant transaction costs for EU exporters and represent significant barriers to trade. Parliament invited serious consideration of the idea of setting up a unified EU customs service for a more effective application of customs rules throughout the customs territory of the EU.

Lastly, on institutional issues , Parliament deplored the fact that important trade legislation, such as that concerning Trade Defence Instruments, remains outside the scope of the codecision procedure and that uncertainty remains as to the applicability of the assent procedure with respect to FTAs. Member States must carry out the necessary institutional reforms and, in particular, by giving effect to the provisions of the Treaty Establishing a Constitution for Europe concerning international trade.

The Committee on International Trade adopted the own-initiative report by Mr Daniel CASPARY (EPP-ED, DE), in response to the European Commission’s communication entitled ‘ Global Europe: competing in the world - a contribution to the EU’s Growth and Jobs Strategy’.

Members of the Committee consider that trade policy is an indispensable component of any strategy the objective of which is to stimulate growth and create jobs through improving Europe’s competitiveness. In their view, the development of trade is not an end in itself, but must be assessed in the light of its impact on economic growth, employment and sustainable development.

In the context of its external policy, the EU should encourage reforms in order to create a favourable environment for business. The report recommends 1) the pursuit of a monetary policy based on price stability so as to be able to finance technological progress and assist small and medium-sized enterprises (SMEs) by enabling them to enter markets outside the Euro-zone; 2) the establishment of business-friendly taxation systems that are likely to increase the number of start-ups and, to that end, to cut taxes that undermine efficiency and impede job creation, especially for particular social groups such as women, the long-term unemployed, and the elderly; and, 3) increasing competition on the internal market, bearing in mind that the fiercer competition is within the EU, the more able EU-based companies will be to compete outside the EU.

Members are convinced that the social model that remains at the base of European industrial relations has enabled the EU to maintain a high degree of global competitiveness vis-à-vis its main competitors; considers that the biggest challenge facing the EU is to uphold the functioning of that social model despite existing pressure, in increasingly competitive global markets, to further lower the social and environmental costs of production. At the same time, they believe that the benefits of an open trading system outweigh its potentially disruptive impact; considers, therefore, that the EU should continue to strive to complete the single market, continue to promote increased global liberalisation and free and fair trade and resist protectionism. The Commission and the Member States are called upon to better inform European citizens on all aspects of globalisation and the concrete benefits resulting from the EU’s participation in the international trading system

The Parliament’s committee also stresses the need for the EU 1) to boost its efforts in education and in research and development in order to maintain its position on world markets for innovative products and highly skilled services; 2) to support the smooth integration of highly innovative European high-tech companies into the global trading environment; 3) to maintain, in spite of external competitive pressures, a sufficiently wide and diversified industrial base; so, that trade opening is accompanied by, and consistent with, solid industrial policies at both European and national levels.

Members consider, however, that the EU’s performance, in relation to already developed and emerging economies, is negatively affected by both a lack of reciprocity in market access conditions, an insufficient degree of compliance with agreed trade rules and the proliferation of unfair trading practices. Noting that many countries in the world, including major emerging economies, maintain high tariff and non-tariff barriers (NTBs) to EU exports, they consider that the lifting or significant reduction of such barriers should be one of the main priorities of EU trade policy. The Committee also calls for the EU’s external policies to ensure fair economic development among partner countries, combat social dumping and promote compliance with social legislation and provisions on decent employment standards which, as proposed by the International Labour Organisation (ILO), guarantee a decent income for workers and their families, the right to safety and health at work and the right to social security and trade union freedoms.

The Committee considers that although the multilateral trading system, embodied in the WTO, remains by far the most effective framework for achieving free trade on a global basis, that the system should, however, be reformed in order to increase its transparency and effectiveness. On the other hand, the report expresses reservations about bilateral and regional free trade agreements (FTAs) as such agreements can lead to trade diversion and are often unbalanced. It believes that new bilateral or regional free trade initiatives should only be launched when necessary to improve the competitive position of EU exporters on crucial foreign markets and should be compatible with WTO rules.

Members believe that the pursuit of further trade liberalisation makes it all the more necessary for the EU to preserve its ability to protect itself against unfair trading practices making use of Trade Defence Instruments (TDIs) such as anti-dumping, anti-subsidy and import safeguard measures. The Committee endorses the idea of adapting those instruments to the new realities of the global economy, but warns of the danger of unilaterally disarming the EU to such an extent that it is unable to counter unfair trading practices in an international context marked by the proliferation of such practices and the intensive, and often abusive, use of trade defence measures by third countries against imports from the EU.

As regards intellectual property rights (IPRs), members of the Committee note that respect for patents and the defence of IPRs lie at the heart of the EU’s external competitiveness, and believe that the EU should adopt a more resolute stance in its approach towards third countries in that connection. This particularly concerns China, which members would like to see complying with its WTO obligations regarding IPRs. Members believe that the strengthening of transatlantic economic relations must proceed on the basis of compliance with the EU’s environmental and public health rules, and must not compromise the independence of its competition policy and its rules on the protection of public services and cultural diversity.

Lastly, in relation to services, the Committee invites the Commission to pursue, in all trade negotiations, both the progressive and reciprocal liberalisation of services and a policy of increased standardisation, transparency and predictability of rules and regulations. It stresses the need to keep public services out of all negotiations, particularly in the case of public services which address people’s basic needs and provide access to essential ‘public goods’ such as health, education, drinking water and energy and those which play an important role in preserving cultural diversity, such as audiovisual services.

PURPOSE: to propose a new strategy to integrate trade policy into the European Union’s competitiveness and economic reform agenda.

CONTENT: the purpose of this Communication is to set out the contribution of trade policy to stimulating growth and creating jobs in Europe. It sets out how, in a rapidly changing global economy, the EU can build a more comprehensive, integrated and forward-looking external trade policy that makes a stronger contribution to Europe's competitiveness. It stresses the need to adapt the tools of EU trade policy to new challenges, to engage new partners, to ensure Europe remains open to the world and other markets open to European businesses.

This Communication also addresses some of the links between the policies the EU pursues at home and abroad. As globalisation collapses distinctions between domestic and international policies, EU domestic policies will often have a determining influence on our external competitiveness and vice versa.

There are two critical and linked requirements for European competitiveness :

1) having the right internal policies , which reflect the external competitive challenge and maintain our openness to trade and investment, for instance:

a) competitive markets: the single market is vital to creating globally competitive companies in the EU;

b) openness: European economic openness is vital for creating jobs and growth in Europe and for our international competitiveness;

c) social justice: the EU must also recognise the potentially disruptive impacts of market opening for some regions and workers, particularly the less qualified.

2) ensuring greater openness and fair rules in other markets , in particular our future major trading partners. Both must be underpinned by transparent and effective rules – domestic, bilateral and multilateral.

Based on this analysis, the European Commission proposes to build an agenda for action in the months and years ahead. From Autumn 2006 and through 2007, the European Commission will set out the competitiveness agenda for EU trade policy with a series of linked initiatives:

In the months ahead the Commission proposes:

Internally , to :

make sure that internal policy proposals, while furthering European standards, fit with global competitiveness challenges; make sure the benefits of trade opening are passed on to citizens by monitoring developments in import and consumer prices; equip people for change through the new generation of cohesion policy programmes and the European Globalisation Adjustment Fund.

Externally , to:

maintain the EU’s commitment to the Doha Trade Round and the WTO as the best way of opening and managing world trade; make proposals on priorities in trade and investment relations with China as part of a broad strategy to build a beneficial and equal partnership; launch a second phase of the EU Intellectual Property Right (IPR) enforcement strategy; make proposals for a new generation of carefully selected and prioritised Free Trade Areas (FTAs); make proposals for a renewed and reinforced market access strategy; propose measures to open procurement markets abroad; conduct a review of the effectiveness of our trade-defence instruments.

PURPOSE: to propose a new strategy to integrate trade policy into the European Union’s competitiveness and economic reform agenda.

CONTENT: the purpose of this Communication is to set out the contribution of trade policy to stimulating growth and creating jobs in Europe (see INI/2006/2292 ). It sets out how, in a rapidly changing global economy, the can build a more comprehensive, integrated and forward-looking external trade policy that makes a stronger contribution to Europe's competitiveness. It stresses the need to adapt the tools of EU trade policy to new challenges, to engage new partners, to ensure Europe remains open to the world and other markets open to European businesses.

There are two critical and linked requirements for European competitiveness. First, having the right internal policies, which reflect the external competitive challenge and maintain openness to trade and investment. Second, ensuring greater openness and fair rules in other markets, in particular our future major trading partners . Both must be underpinned by transparent and effective rules – domestic, bilateral and multilateral.

Based on this analysis, the European Commission proposes to build an agenda for action in the months and years ahead. From autumn 2006 and through 2007, the Commission will set out the competitiveness agenda for EU trade policy with a series of linked initiatives:

In the months ahead, the Commission proposes:

Internally , to :

make sure that internal policy proposals, while furthering European standards, fit with global competitiveness challenges; make sure the benefits of trade opening are passed on to citizens by monitoring developments in import and consumer prices; equip people for change through the new generation of cohesion policy programmes and the European Globalisation Adjustment Fund.

Externally , to:

maintain the EU’s commitment to the Doha Trade Round and the WTO as the best way of opening and managing world trade; make proposals on priorities in trade and investment relations with China as part of a broad strategy to build a beneficial and equal partnership; launch a second phase of the EU Intellectual Property Rights (IPR) enforcement strategy; make proposals for a new generation of carefully selected and prioritised Free Trade Areas (FTAs); make proposals for a renewed and reinforced market access strategy; propose measures to open procurement markets abroad; conduct a review of the effectiveness of our trade-defence instruments.

The Commission also intends to propose a new generation of FTAs , if approached with care, can build on WTO and other international rules by going further and faster in promoting openness and integration, by tackling issues which are not ready for multilateral discussion and by preparing the ground for the next level of multilateral liberalisation. The key economic criteria for new FTA partners should be market potential (economic size and growth) and the level of protection against EU export interests (tariffs and non tariff barriers).

With a GDP of EUR 714 billion in 2005 and trade with the EU at 115.1 billion, ASEAN (with whom negotiations are on-going) appears to be a priority for the EU. According to World Bank calculations, the annual average growth rate for ASEAN from 2005-2025 should be around 4.9% representing a market potential of EUR 57 billion for the same period. ASEAN combines high levels of protection with large market potential and they are active in concluding FTAs with EU competitors.

In terms of content, new competitiveness-driven FTAs would need to be comprehensive and ambitious in coverage, aiming at the highest possible degree of trade liberalisation including far-reaching liberalisation of services and investment. A new, ambitious model EU investment agreement should be developed in close coordination with Member States. Where partners have signed FTAs with other countries that are competitors to the EU, full parity at least should be sought. Quantitative import restrictions and all forms of duties, taxes, charges and restrictions on exports should be eliminated.

FTAs should also tackle non tariff barriers through regulatory convergence wherever possible and contain strong trade facilitation provisions. They should include stronger provisions for IPR and competition, including for example provisions on enforcement of Intellectual Property rights along the lines of the EC Enforcement Directive. The EU will seek to include provisions on good governance in financial, tax and judicial areas where appropriate. It should also ensure Rules of Origin in FTAs are simpler and more modern and reflect the realities of globalisation.

In considering new FTAs, the EU will need to work to strengthen sustainable development through its bilateral trade relations. It will also take into account the development needs of its partners and the potential impact of any agreement on other developing countries, in particular the potential effects on poor countries' preferential access to EU markets. In line with its position in the WTO, the EU will encourage our FTA partners to facilitate access by least-developed countries to their market, if possible by granting duty and quota free access. Lastly, FTA provisions should be an integral part of the overall relations with the country or region concerned.