Karel de Gucht: two to tango says EU trade chief

Karel de Gucht: two to tango says EU trade chief
By Euronews
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EU Trade Commissioner Karel De Gucht hopes to increase Europe’s influence in global trade policies, to keep it in the forefront of export-driven growth. The challenges include disputes over currency and protectionism in China and the US.

De Gucht has made clear the EU intends to retaliate against closed markets. Ahead of the G20 summit of major industrialised and developing economies in Seoul this week he spoke to euronews.

Sergio Cantone, euronews: “What is the impact on trade of this ongoing currency war?”

Karel De Gucht, EU Trade Commissioner: “Well, it is certainly impacting the overall trade environment. I think the biggest risk is that you get a competitive rush to have a weaker currency. If we don’t stop that, and it can only be stopped at the international level, I think at level of the G20… This is going from bad to worse, I think.”

euronews: “Do you think that the European Union will be the more fragile bloc among the others, among the US and China?”

De Gucht: “I wouldn’t think so, because we have the euro, and the euro is behaving pretty well. One can argue that it is too high. Yes, but on the other hand it is also supporting our economy. So I don’t believe that we are in such a weak position, though as the biggest economy [sic] of course we are impacted by a worsening overall business climate.”

euronews: “The dollar is low, the Chinese
renminbi is low. So, is the choice of the European Union, or some countries of the European Union, to keep the euro higher a good choice?”

De Gucht: “Well if you would like to have a weaker euro you should have measures, for example, like they have taken in the US, where essentially they are printing money, and I don’t think this is the right approach. This may be giving some relief in the short term, but over time I think this is a very bad choice, and it would also be a very bad choice for Europe.”

euronews: “How about China?”

De Gucht: “China of course is very export-oriented. They have also many ways of subsidising their exports. They do it through a weak
renminbi, they do it through subsidisation, also sometimes through dumping practices, which by the way we are attacking.”

euronews: “Is the EU about to reform its Common Agricultural Policy just to meet the requests of its trade partners?”

De Gucht: “Europe is not blocking the DDA [Doha Development Agenda]. I think we are the staunchest supporters of the DDA. But you have to be two to tango, and I think that is the real problem. Unless there is a political move by some very big players, I think it will be very difficult to unlock the negotiations, but it is certainly not Europe that is blocking the negotiations: the contrary, I would say.”

euronews: “The European Union is also keen to unlock public procurement in some other blocs. This could be a major boost for EU exports, and so good news for the crisis, getting out of the recession.”

De Gucht: “It’s about elementary fairness, you know. What we propose is that we should have a tool, and we are working on that presently, whereby if public procurement is closed in a third country [non-EU], we [would] have the possibility to do the same, for specific sectors, for specific reasons, with our own procurement markets. I think that open markets are very, very important, are in fact crucial for sustained growth at the level of the world economy, but you cannot do it alone. So, we want to have some more leverage, so that we can force third countries to open their markets.”

euronews: “French President Nicolas Sarkozy [France will chair the G20 starting in 2011] is about to propose, at the G20 meeting, a reform of the international monetary system. What are your expectations from a trade point of view?”

De Gucht: “What I certainly hope is that whatever reform is proposed – and we still have no further news on that - it will not hamper trade, and that we should very clearly distinguish between, let’s say, monetary policy and trade policy. Trade policy needs to be based on openness, on competition, on reciprocity, but not be influenced by what I would call restrictive measures or measures that end up in protectionism.”

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