Toespraak eurocommissaris De Gught over de groeimonitor (en)

Ladies and Gentlemen,

It is an understatement to say that the European Union has lived a momentous week, one that is likely to get into future history books. It would, therefore, not be appropriate for me to deal right away with the main subject of my speech today, EU trade policy, without offering you some brief remarks on the broader economic picture and how international trade fits therein.

The last three years we have gone from one crisis to another, only with different characteristics. First, after the subprime mortgages and Lehman, we had a financial crisis that, because of the ensuing panic, became a deep recession. That gave rise subsequently two years ago to the beginning of an acute sovereign debt crisis in the euro zone, with Greece as the sad culmination point, which triggered another wave of unrest on financial markets, sapping confidence that is rapidly bringing economic growth to a renewed halt.

The euro zone leadership has taken measures since 18 months but markets have mostly judged them ‘too little and too late’, eroding political credibility.

I now hope and believe that with the list of measures taken at the summit we finally can turn the corner. They are impressive, on paper that is. The real acid test of our resolve is that the measures, at European and national level, are rapidly and effectively implemented on the ground, however unpopular they may be in terms of more taxes, less public spending, or tackling vested interests. But there is no alternative, be it in Italy or anywhere else in the euro zone. It is high time we walk the talk.

A big chunk of the work will be austerity, but no matter how austere you are, you will never get out of a debt trap without enduring economic growth. Over a longer term period, 1 or 2 percent yearly growth more than usual makes a tremendous difference.

We must again kick-start our growth engine. And this is where international trade and investment enters the big picture. Trade bolsters growth though a variety of channels, especially in the years to come where 90% of world economic growth will occur outside Europe. Trade policy is a stimulus that hardly costs a eurocent to the Treasury, and where the EU can deliver on thanks to our exclusive competence.

As a trading partner, despite the short-term prospects for our economies and the wave of belt-tightening this requires, we must not lose sight of how much the EU still has to offer:

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  a single market of more than half a billion consumers;
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  a stable legal and regulatory environment; and
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  a specialised and highly educated workforce with a talent for innovation and quality - and in Italy you know what this means;

But this is not on offer for free. It goes without saying that, in our multilateral and bilateral trade negotiations with the world's other leading economies we look to exchange openness in a way which benefits both sides. We only open our markets if our negotiating partners open theirs. This principle of course lies at the core of any trade agreement, which can only be based on reciprocal commitments.

But what type of reciprocity are we talking about? The mutual benefits we try to seek in ensuring a balanced and reciprocal approach to trade is not - and should not - mean a one size fits all approach. We must also factor in our responsibilities as a global actor, as well as the specific situation of our negotiating partners. For this reason we are often ready to accept a degree of differentiation and asymmetry, which allow us to take into account the level of economic development of our partners - differentiation between what we ask from different countries and, in the case of poorer partners, differentiation in the timing and extent of commitments we expect them to make.

Take for instance the multilateral Doha negotiations at the WTO. Here, the EU, the US and other industrialised countries have accepted that developing countries and in particular the least developed countries should not have to open their markets to the same degree as those of developed economies. This principle of special and differential treatment has existed in the set of international trade rules, known as the GATT, for decades.

Let me illustrate this with two examples:

First, as you know, it is exactly this question of defining the right level of reciprocity that lies at the heart of the current paralysis of the Doha negotiations. Whilst we can be flexible with, poorer countries, others like China, India or Brazil, have emerged as major trading nations. In 10 years from now, they will no longer be "emerging", they will have fully "arrived". This is something already reflected in new global structures such as the G20 group, which meets at the end of next week in Cannes, which give them a greater voice in global economic development.

But with economic might comes responsibility. These countries should shoulder their responsibilities. They must assume commitments that are commensurate with their economic weight - rather than continue to enjoy the best of both worlds: developed country access under the umbrella of developing country status.

Second, we apply the same differentiated treatment in our bilateral negotiations. In the free trade agreement between the EU and Korea, which entered into force last July, Korea made tariff concessions that are equivalent to ours. But it is equally clear that it would have been wrong to insist on the same level of concessions from Peru and Colombia or Central America in the agreements closed earlier this year with them. The same applies for our agreements with sub-Saharan Africa, which are designed to ease countries in those regions into stronger global integration.

Ladies and gentleman,

Europe is open, yes. But it is not naïve! As European Trade Commissioner, I promote open markets, but I also do not hesitate to take action to ensure that markets abroad remain open to EU exporters, service providers and investors. I am fully aware of the necessity to defend European interest to the best of our capacities.

We must ensure that international trade rules are fully respected and that we maintain a level playing field. This is at the core of the updated trade policy which the Commission set out about a year ago. Let me flag six examples of how we are doing this:

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  First, we make the full use of all the trade instruments at its disposal to ensure that trade rules are respected. We have shown we are ready to take countries to the WTO, as we recently did against Chinese restrictions on the exports of raw materials and where the WTO condemned the Chinese practices.
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  Second, the Commission does not hesitate to take action under its Trade Defence Instruments, when we see that our businesses are harmed by unfair trading practices such as dumping or illegal subsidies by our competitors.
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  Third, our new policy attaches particular importance to accessing government procurement markets, both through an updating of the WTO's global rules in this area and through our bilateral trade deals. In addition, together with my colleague Michel Barnier, I will shortly bring forward an EU instrument that should help to ensure better access for European companies to public procurement abroad. It will identify measures that would encourage our trading partners to open their public procurement markets and to dismantle protectionist measures - all within the sprit of open reciprocity.

Of course, the underlying aim must be to open foreign markets, not to close ours!

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  Fourth, we are paying increasing attention to defending our comparative advantages.

And our main comparative advantages for the 21st century are the innovation, quality, exclusivity and reputation built into our products which reflect the fruit of Europe's unique genius for combining intellectual enlightenment and long held traditions. This is a point that I believe is well understood here in Italy, with your reputation of quality products and exclusive brands.

This is why we pay such attention to the protection of our intellectual property on our main export markets. It is so essential to our external competiveness.

Our most recent success in this was the conclusion, last year of the Anti-Counterfeiting Trade Agreement (ACTA), which aims at creating an international gold standard for the enforcement of intellectual property rights. The remarkable thing with this agreement is that it covers all intellectual property rights, including geographical indications and also designs. During the negotiations, key countries like the US, Australia or Canada, which have a substantial problem with the concept of Geographical Indications fought against that, and wanted ACTA to cover only copyright and trademarks. The Commission stood firm against these attacks, and managed to obtain a concerted position. For us it was essential that agri-food producers and fashion designers - among which there are many small and medium sized enterprises - could rely on ACTA as much as entertainment companies or big brand holders.

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  Fifth, improving the worldwide protection of geographic indications is also high on our agenda. We are making in-roads, even in the face of opposition from other parts of the world with different Intellectual Property approaches. Our agreement with Korea achieved a high-level of protection for a key set of EU Geographical Indications, while recent agreements with Moldova and Georgia establish a very high level of protection for the complete range of EU geographical indications. We are even advancing in a deal on geographical indications with China and I hope that South Africa will look at our proposals on this subject more favourably than before. We will continue to pursue this aggressive policy both multilaterally (WTO), plurilaterally (such as in ACTA), bilaterally in our free trade deals and our wine agreements.

It is in the same spirit that the Commission is pushing for the adoption of the so-called "Made in" Regulation. Consumers should have the right to know the origin of what they buy. However, several EU Members consider that this right should not translate itself in an obligation to mark imported products; they deem that we should rather explore other ways of providing the same information to the consumer. What is clear is the strong political support that the European Parliament has shown for this initiative and the Commission continues to seek a mutually agreeable compromise between the European Parliament and the Member States in the Council - one which maintains the consumers' right to know where, in a globalised economy, purchased products are made.

Ladies and Gentlemen,

To conclude, let me reiterate my conviction that the EU, its citizens, its businesses, its consumers all stand to benefit from a world that is open to trade.

The EU is the world's leading trade power. This means that it must show the way in terms of trade openness, while using its clout to ensure full respect of trade rules as well as ensuring reciprocity and mutual benefits. But we also expect other actors to play their part and assume responsibilities commensurate with their new-found economic weight.

And Italy, with its huge potential for innovation and creativity, can only benefit from such approach. Together, we must bring the positive message to citizens that open trade is not a threat, but a force for good, that is essential to our current and future prosperity, and to getting past the debt crisis.

Thank you for your attention.