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Strengthening European Growth and Competitiveness: Proactive Trade Agenda – NOW!

The role of trade as a generator of growth and jobs is undeniable, but public perception of the further liberalisation of trade is getting worse and citizens' concerns must be addressed far more effectively than before. This was one of the conclusions of the conference on "Strengthening European Growth and Competitiveness: Proactive Trade Agenda – NOW!" that took place in Helsinki on 26 October.

"Trade policy is now in trouble. It has not raised this much interest in the political debate for a long time, if ever", said Jyri Häkämies, director general of the Confederation of Finnish Industries (EK), in his address opening the conference. He noted that, even though the EU was a superpower in trade and the role of trade as a driver for growth was greater than ever, public support for open trade was declining.

"It is our responsibility to advocate for trade; we cannot take it for granted that people understand what the benefits of free trade are", said Jacek Krawczyk, president of the Employers' Group, in his welcome speech. He said he appreciated the European Commission's effortsto increase the transparency of trade negotiations, but admitted that those efforts had been insufficient, and felt that the European institutions, Member States and business needed to address citizens' concerns more efficiently.

The current economic situation in the EU and Finland, along with Brexit and its consequences, were the focus of the keynote speech by Olli Rehn, Finnish Minister of Economic Affairs and former vice-president of the European Commission. Referring to current developments on CETA, Mr Rehn stressed that the EU's credibility as an international partner was at stake. In his view, the situation as a whole highlights the importance of communication and dialogue with citizens on why trade is important to our welfare and employment.

Philippe de Buck, a member of the Employers' Group and rapporteur for the EESC's recent opinion on TTIP, reminded attendees that "the EU has a number of strengths making it easier to maintain its position in global trade. These are the single market, the Euro currency, open trade policy and consistent regulations". He stressed that the EU's position in global trade could not be taken for granted. Geopolitics and new technologies, he pointed out, are rapidly changing the global economic landscape, which is why the EU needs a proactive trade agenda for business and regulation must support the growth of businesses rather than hampering it.

Johanna Ikäheimo, vice-chair of the Confederation of Finnish Industries (EK) and chair of Lappset Group, elaborated on the trade challenges and opportunities facing Finnish companies. In her view, internationalisation is a necessity for many Finnish companies, especially for SMEs due to the limited size of the Finnish market. She highlighted that existing trade barriers had a particular impact on SMEs.

 

Ongoing trade agreements: what's at stake?

The participants in the first panel focused on an overview of ongoing trade agreements. Charles Adams, US Ambassador to Finland, summarised recent developments on TTIP negotiations. He underlined that significant progress had been made during the 15th negotiating round in New York and emphasised that the negotiators' work was continuing. In his view, ongoing political discourse is not about trade being good or bad. The question to be addressed is how each society is going to deal with mitigating the adverse impact of free trade and the removal of protectionist measures in those sectors where jobs are likely to be lost.

"30 million jobs in the EU depend on export, that's 1 in 7 jobs! 90% of growth in the foreseeable future is expected to be outside the EU. That is why trade is more and more essential for growth and jobs." That was the message from Signe Ratso, director for trade strategy and analysis and market access in DG TRADE. She elaborated on the Commission's efforts to make negotiations on TTIP more transparent. In her view, the mandate to negotiate trade deals that the European Commission has obtained from the Member States should only be granted after detailed internal debates and support from national parliaments for the Commission's actions.

"Finland is a strong supporter of free trade and the figures prove we are right", noted Matti Anttonen, under-secretary of state in the Finnish Ministry of Foreign Affairs. He pointed out that Finnish exports had risen following the EU-Korea free trade agreement.

 

More competitiveness and growth for all

The participants in the second panel focused on the question of how trade agreements could bring more competitiveness and growth for all. According to Li Andersson, chair of the Left Alliance in the Finnish Parliament, citizens in Europe no longer believe that free trade will bring more growth, because reality looks different for them. In her opinion, this can be blamed on an imbalance between open trade and welfare policy.

"Trade policy cannot be a hostage of national issues", according to Hanna Deringer, policy analyst at the European Centre for International Political Economy. If there are concerns at national or even regional level, she said, they should be discussed earlier in the process. In her view, there needs to be a clear mandate for the European Commission as well as an understanding of what kind of trade policy Member States want.

Esa Kaunistola, vice-chair of the EK's Trade Policy Committee and a representative of Microsoft, focused on opportunities emerging from digitalisation. In his view, digital industry enables new business models to be created and new industries to flourish. He also reminded attendees that TTIP was the last chance for the EU and the US to set up global standards, otherwise the centre of trade would ultimately shift towards Asia and convincing other players to follow our standards and values would be extremely difficult.

Aleksi Kuusisto from the Central Organisation of Finnish Trade Unions (SAK) reminded attendees that opening up trade always led to structural changes in the economy: while more workers were hired in certain sectors, companies that were not competitive had to adjust and potentially reduce employment. In his view, it is government's role to intervene judiciously in order to make this transition smoother. The right national policies are needed to ensure that trade benefits both workers and companies. Agreements that strengthen rules and standards bring more legitimacy to trade agreements from the citizens' perspective.

Dilyana Slavova, president of the EESC's REX Section, underlined the importance of trade for growth – including in the context of Sustainable Development Goals. She informed attendees that during the meeting with Cecilia Malmström, EU Commissioner for Trade, the EESC had proposed to draw up a study on trade negotiations in all Member States.

In his concluding remarks, Jonathan Peel, vice-president of the REX Section and a member of the Employers' Group, underlined that it had been an extremely timely debate, taking into account ongoing developments on CETA and Brexit. In his view, the whole mechanism of trade deals needs to be analysed. Will Japan continue negotiations with the EU if CETA doesn't go through? Is it possible to push forward multilateral negotiations within WTO? These are only a few questions to be answered in the future.

The conference was organised jointly by the Employers' Group of the European Economic and Social committee, the Confederation of Finnish Industries and ICC Finland.