Free trade policies under attack

Date: 29/02/1996

By Elizabeth Wise

IT IS finally out in the open. EU governments do not want free trade zones with every nation on the globe.

In what diplomats described as a “furious attack” on the European Commission, France's ambassador to the Union, Pierre de Boissieu, lashed out at Trade Commissioner Sir Leon Brittan during a meeting of EU foreign ministers this week. “Where is the Commission leading us, to free trade with the whole world?” they quoted him as saying.

The occasion was a discussion of whether to allow the Commission to begin negotiations with both Mexico and South Africa towards eventual free trade agreements. The ministers said no to both initiatives, with most of them agreeing that a serious review of EU trade policy was needed.

“We have to take a stand ... to do a global evaluation of these agreements,” said France's European Affairs Minister Michel Barnier.

France is not alone in seeking to defend the interests of EU manufacturers and farmers from the possible encroachment of foreign suppliers. “The traditional southern attitude is moving north,” said a South African official waiting for the go-ahead for trade talks and surprised by growing reticence - if not reluctance - on the part of traditional free trade advocates such as Germany and the Netherlands.

With new trading rules stressing fair play around the globe, EU governments fear that concessions they give to some trading partners will have to be extended to all.

Diplomats from several EU countries have stressed they will not approve any more free trade agreements until they understand their future ramifications. “If we give South Africa access to our markets for fruit and vegetables, will we have to give it to the United States?” railed one EU ambassador recently. “If the Commission can guarantee us that the concessions will only apply to South Africa, fine, but as long as they say they don't know, the answer is no.”

French diplomats fear that if the World Trade Organisation (WTO) obliges the EU to give free access to WTO members' fruit and vegetables, it could cost the EU up to 7 million ecu in compensation for Union farmers.

EU agriculture ministers have rallied around the trade-curbing banner, with most supporting Spanish complaints this week that free trade accords have hurt Europe's fruit and vegetable farmers. Asking the Commission to assess that cost before offering any more concessions to trading partners, they also urged the insertion of GATT-approved safeguard clauses into the trade and cooperation agreements with Mediterranean countries and other trading partners.

So far, EU trade accords, including those with fruit-producing North African countries, differ from those proposed for South Africa and Mexico because they are, for the time being, unilateral concessions. The EU feels they are safe, perhaps because they have escaped challenges from the WTO so far. Unlike those partial trade accords, free trade pacts must include all sectors, including the ever-sensitive farm sector.

Officials fear WTO scrutiny of any free trade zones they could set up. One top French official also voiced concern that burgeoning trade initiatives from Brussels could prompt the WTO to re-examine the EU's trading ties with Central and Eastern European countries (CEECs), which exclude some key sectors where CEECs have a competitive advantage. EU governments also fear that if they set up a multitude of regional free trade zones, they will undermine the year-old WTO. “Are we about to commit a fatal error by destroying the multilateral system we've just built?” asked one EU ambassador recently.