Tag Archives: WTO

What Do We Really Want from the EU?

European citizens should think more about their demands when talking about the EU. Here’s why.

These are not the best of times for the European Union. There’s a financial crisis; an immigration crisis; a crisis of trust, and who knows what else. In a nutshell, the EU is in trouble.

What is more difficult to comprehend is the malignancy and the “I-told-you-so” attitude of so many politicians, commentators and European citizens. The poignancy of the negative feelings is really remarkable. That is why I would like to do something unusual for this blog and address these skeptics. My objective is to provide a merciless, subjective and heavily normative critique of the complacency of those that seem to prefer a European future without a European Union.

In order to do that, I need to make an important observation. Homo Sapiens has not evolved substantially during the last 60 years. That being said, the claims that a new war on the European continent is impossible seem strange. It was not the tanks and airplanes that destroyed Europe during World War II, it was the people in them. What is more, our physical and genetic ancestors have waged war on one another for at least two millennia on this continent. In fact, the only longer peaceful episode in recent history has been the period of European integration. It’s true that NATO and the dynamic of nuclear deterrence also played a part. But it was the cooperation of European elites within the European Community that cemented this security pact.

Nowadays many believe that wars are part of the history, but not of the future. Others think that wars may be a useful instrument of foreign policy. What unites them is the lack of any wartime experience. This virus of complacency and ignorance is widespread. It has caught up with politicians, journalists, and all kinds of experts. The McDonalds rule is their flag, although it has already been broken. This virus makes them think that states are well equipped to solve emerging problems using the classic instruments of intergovernmental cooperation. The problem with their narratives is that this type of cooperation has recently failed spectacularly – with the UN Climate Change Conference failing to agree on new rules for climate change mitigation, WTO failing to agree on the completion of the Doha round, and the G-20 failing to agree on anything except for the summit menu. These are not just incidents; these are symptoms of the limitations of the classic forms of international cooperation.

Someone might argue that if the EU were so successful, it wouldn’t have experienced its recent crisis. That is true. The EU is not perfect, and we are now bearing the fruits of the lax rules of the Economic and Monetary Union. But it is much better than any other form of cooperation especially given the small economies of many Member States. This issue of economic efficiency is usually not discussed by euroskeptics. The truth is that without the European Union economic life in Europe would definitely slow down, and businesses know that. This is the problem of some anti-EU parties: their constituencies will actually suffer from any possible withdrawal from the Union. That is why they prefer to grumble about the EU without taking a meaningful step towards resolution of their grievances. Referendums should be held in each and every Member State that feels the need to take a different path to prosperity. The United Kingdom should be particularly encouraged to conduct a referendum on its EU membership. The European Union is not a club of convenience; its success depends on the high motivation of its members.

The European Union is not at a crossroads. It is a well-functioning and unique mechanism for political integration. It’s up to its users – the European citizens, to use it properly. It will deliver results only if we command it to do so. That is why from now on I would like to hear more demands, and less chaotic criticism when discussing the EU.

Security of Supply of Rare Earths: a Wake-Up Call

The Chinese government has blocked exports to Japan of rare earth minerals used in products like hybrid cars, wind turbines and guided missiles. The ban was introduced following a dispute on the detention of a Chinese fishing trawler captain by Japan. Japan has been the main buyer of Chinese rare earths for many years, using them for a wide range of industrial purposes.

This is the first time that China is ultimately using the dependency of a trade partner on rare earths to wield political pressure in an international dispute. It’s unprecedented and probably illegal under WTO rules.

However, there are no guarantees that such measures will not be imposed in the future on the European Union, too. In fact a report of a special ad-hoc working group has listed rare earths as some of the truly critical raw materials for the EU.

The recent imposition of the ban by China raises important questions about the future supply of rare earths and other rare raw materials to the EU. The EU should continue its engagement with the WTO on this issue. China should be decisively discouraged from using such policy measures in the future.

UPDATE: China has denied reports it banned the export of rare earths to Japan. More information on this will probably follow in the next few days.

China Brings EU to WTO over Shoes

China has complained to the World Trade Organization about anti-dumping duties imposed by the European Union on shoes made in China.

China says that the EU has “violated various obligations under the W.T.O., and consequently caused damage to the legitimate rights and interests of Chinese exporters.”

Interestingly, the European Footwear Alliance agrees with China and says that that “ironically the measure hurts European business and consumers the most”.

EU, US Take China to WTO over Raw Materials

Both the European Union and the US have requested consultations with China in WTO over export restrictions for raw materials.

According to Catherine Ashton, EU Trade Commissioner: “the Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn. I hope that we can find an amicable solution to this issue through the consultation process.”

Raw materials in question include yellow phosphorous, bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide and zinc.

China says that the restrictions are meant to protect the environment and comply with Chinese trade commitments.

To put this in perspective, read the excellent article by Martin Stürmer: “The International Raw Materials Boom. A Challenge for Multilateral Trade Policy”. The author pays specific attention to the implications of raw materials competition, which caused many wars in the last two centuries, and prompted the beginning of the European integration process. Stürmer thinks that the multilateral world trade system is barely adequate to meet the new challenges arising from increasing raw materials consumption. The author advocates for a recognition of the development policy interests of many producer states.