DIGITALEUROPE

DIGITALEUROPE’s vision is of a Europe that nurtures and supports digital technology industries, and prospers from the jobs we provide, the innovation and economic benefits we deliver and the societal challenges we address. So we are pleased to read, in the renewed EU Industrial Policy published on 10 October, with the telling subtitle “A Stronger European Industry for Growth and Economic Recovery,” of the goal to bring back industry to Europe. According to Vice President, Antonio Tajani, Commissioner for Industry and Entrepreneurship, European industry can deliver growth and create employment. The Communication outlines that Europe needs to reverse the declining role of industry for the 21st century with the aim to deliver sustainable growth, create high-value jobs and solve the societal challenges that we face. But does the Communication set the right framework for that to happen?

One of the actions identified as an industrial policy building block is to ensure access to international markets. Today the EU is the world’s leading trading power. But how long will it last? With emerging economies developing their own industrial policies, regrettably often supplemented or even replaced by protectionist measures, trading opportunities cannot be taken for granted. Preserving the EU’s trading position requires proactive initiatives. The communication describes the Commission’s commendable efforts to open markets and to connect Europe to the main sources and regions of global growth. It reiterates that the European executive will continue to push for an ambitious trade agenda.

One can hope that Members of the European Parliament and the Member States’ officials sitting in the Council will consider those points when they decide whether or not to authorise the negotiations for the free trade agreement with Japan. Last Thursday, in the vote of the International Trade Committee (INTA), a large majority of MEPs supported the start of the negotiations between the two partners. The resolution adopted by INTA points to the huge gains for jobs and growth offered by deeper ties with Japan; it also urges that the negotiations be suspended if Japan fails to remove barriers in key sectors. Metin Kazak MEP, the rapporteur for this file in the INTA commented: “The EU’s trade policy needs a game-changer: a free trade agreement with Japan. The huge untapped trade potential could boost the EU’s GDP, create jobs and increase exports. That is why I recommend launching negotiations. We know it won’t be easy – the key lies in removing non-tariff barriers, particularly in crucial sectors such as cars and medical devices. If Japan fails to deliver, the negotiations should be suspended”.

The European Parliament plenary is still supposed to adopt the Parliament’s final position in October; in parallel the Council prepares its decision on the adoption of the negotiation mandate. The outcome of those two processes is not certain, and the hesitancy of some big Member States like Germany and France looms large in the minds of those who have already calculated what they can gain on the abolition of trade barriers between the two economies.

A solid trading partnership with Japan will affect more than just the free flow of goods and services; it will reinforce the value of trade globally. Together with Japan the EU has an opportunity to promote open and free trade to other economies world-wide. Free trade will deliver long-term and sustainable economic returns. Moreover, it is only through cooperation and negotiations that trading partners can agree to avoid regulatory approaches that distort trade. With this in mind industry cannot but applaud the inclusion of the chapter on access to international markets in this new communication on industrial policy. The Commission’s stand on trade liberalisation and its commitment to facilitate the trade expansion of the EU is unquestioned. But the Council and the European Parliament’s discussion on the EU-Japan FTA will be telling. Will protectionism or openness win the day? In our view open doors, not barriers, are in industry and Europe’s best interest.

 

This blogpost was penned by Julia Jasinska, Manager Trade Policy, DIGITALEUROPE

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