Ministerie van Buitenlandse Zaken

Dutch Diplo Talk

Trade improvement is in the eye of the beholder

17 Jun 2015

world map trade

Free trade between countries leads to more economic growth for all, because of production by the lowest-cost-country. Protectionism through trade barriers, both quantitative (diverging tariffs, quotas, open or hidden subsidies, countervailing duties) and qualitative (diverging technical, sanitary and environmental standards) should therefore be eliminated. This is the opinion of the big majority of policy makers in the world.

Nevertheless current debates focus mostly on market prices, and less on harmonizing standards. Trade in humans and protected animals have been abolished, as well as trade in products that cause health and safety problems in the importing country (weapons, hard drugs). Unilateral trade barriers for products that contain genetically modified organisms, hormones or certain levels of chemicals are still fiercely debated.

There is more. Indirect costs of the production are not included in the price. Let’s take a look at commodities like coffee, palm oil and soya. These are produced for the global markets at the cost of exploitation of local communities and global commons (rain forest, climate, natural resources). I remember vividly working on the case of the “leg hold trap”, a torturous instrument used to catch furred animals. The Netherlands and later the European Union announced to set a unilateral ban on furs from those areas, unless a multilateral agreement on humane trapping would be reached. Canada, Russia and finally the United States avoided a trade war by signing the agreement.

 

Global trade negotiations

The World Trade Organization (WTO) is the international forum to develop a new generation of global trade rules, which would balance economic, social and environmental concerns, as well as the concerns of developing and emerging economies. Since 2001, this is taking place in the Doha Round and there is regrettably no sign that it will be finished soon. As a result, the biggest trading blocs in the world – the European Union and the United States, representing more than 50 percent of the world’s GDP – are negotiating a separate Trans Atlantic Trade and Investment Partnership (TTIP). At the same time, negotiations between the United States and Asia – representing 40 percent of GDP in the world – should lead to a Trans Pacific Partnership (TPP).

Some fear that the outcome of these two partnerships will not eliminate enough trade barriers, whereas others insist on safeguarding high quality standards, and third parties raise concerns that Africa will remain on the sideline. The beauty of any trade agreement is in the eye of the beholder, said EU-ambassador David O’Sullivan last week in an International Forum in Sacramento. He claimed the mission is not impossible, because we have the negotiated text of a modern sustainable trade agreement at our disposal: the EU-Canada Comprehensive Economic and Trade Agreement (CETA). It will eventually lower tariffs by 98 percent, safeguard rules of origin, give access to ports, harmonize standards and customs regulations, protect investments and intellectual property, settle disputes and much more.

 

Some fear that the outcome of these two partnerships will not eliminate enough trade barriers, whereas others insist on safeguarding high quality standards, and third parties raise concerns that Africa will remain on the sideline. The beauty of any trade agreement is in the eye of the beholder, said EU-ambassador David O’Sullivan last week in an International Forum in Sacramento. He claimed the mission is not impossible, because we have the negotiated text of a modern sustainable trade agreement at our disposal: the EU-Canada Comprehensive Economic and Trade Agreement (CETA). It will eventually lower tariffs by 98 percent, safeguard rules of origin, give access to ports, harmonize standards and customs regulations, protect investments and intellectual property, settle disputes and much more.

 

This blog was posted earlier in https://nlinsf.wordpress.com/

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  • 17 Jun 2015, 8:23
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About the author

Hugo Von Meijenfeldt
Written by Hugo Von Meijenfeldt

Consul-General in San Francisco

Hugo von Meijenfeldt was appointed as representative for the Kingdom of the Netherlands in the 13 westernmost United States in August 2013.

Prior to his current position, Hugo was Deputy Director General at the Dutch Ministry of Infrastructure and the Environment. He also served as Special Envoy for Climate Change at the Ministry of Foreign Affairs from 2009 until 2013. In this capacity, he led Dutch participation in global diplomatic activities to reach a climate agreement.

Previously, Hugo was Director for Soil, Water and Rural Environment. For several years he held the position of Deputy Director for International Affairs, Chairman of the Committee on Environmental Policy of UN-ECE Geneva, and Head of the European Policy Division (including the EU Presidency in 1997). From 1982 until 1991, he was Legal Counsel to the soil clean-up division.

Hugo earned his Masters in Public Law and Policy at the Free University in Amsterdam in 1981. He is member of the WorldConnectors and the Sustainability Challenge Foundation.