The European Union is not in the position of ‘schooling’ Trump about free trade

During the G20 summit in Hamburg, Germany, which was held recently, European nations were keen on lecturing the United States on protectionism.

It has in fact been a longstanding pledge of the G20 to resist any tendencies to put national interests above the framework of international trade agreements. It is also true that the first months of the Trump presidency are not marked by free trade measures coming out of the U.S.

State and local governments have introduced 26 percent more policies that hurt the economies of other G20 countries than during the same period last year, according to Global Trade Alert. They also adopted half as many liberalizing policies.

During the G7 meeting in Italy in May, members had pointed out that:

“Technological advances and globalization have fundamentally contributed to the increase in the overall standard of living for decades.”

The European Union has also, in the meantime, engaged in trade negotiations with Japan. In the era of Trump, EU leaders are tapping themselves on the back for this move, and media sources in Brussels see EU Commission president Jean-Claude Juncker “schooling” Donald Trump on trade. However, the trade deal with Japan is long from being concluded: both partners still have disagreements over court arrangements regarding trade disputes, and some parts of the arrangement will take up to 15 years to come into effect. And the EU already took a step back, with EU trade commissioner Cecilia Malmström telling the press that Europe reserves the right to reimpose restrictions on Japanese automobile imports, all without specifying at which level these would be introduced.

Most of all, the European Union has really bad experiences when it comes to its own ratification process. This inability of the European Union to conclude trade agreements of this scale have been shown in the past, notably during the TTIP negotiations between the EU and the United States. Months of scaremongering about the dangers of American food products had led to thousands of protests against the treaty. In the end, all parliaments of the member states approved the deal, except the parliament of Wallonia, the southern part of Belgium. As trade treaties in the EU need to be approved unanimously, years of negotiations went up in smoke.

It surely must not have been amusing for Polish producers of air-conditioners when they found out that they will continue to pay high tariffs because, as The New York Times put it: dairy farmers in Belgium held up a big EU trade deal.

There is little doubt that if the EU is to let the parliaments of the 28 member states (27 if it happens before the U.K. leaves the union) vote on this agreement, a comparable opposition to trade will arise.

Trump’s handshake-battle buddy Emmanuel Macron isn’t much better on this. Macron would like to enact a European version of the Buy American Act of 1933, which required the U.S. government to purchase products made in the U.S. Second, Macron would like to reinforce “anti-dumping” rules. During his campaign, he accused Poland of unfair competition by setting lower social standards. Sounds familiar? You bet it does.

And this is not even mentioning the EU’s anti-dumping tariffs on China or its protectionist position towards Africa. Through farm subsidies, tariffs, and intrusive food standards, the EU has made African agriculture non-competitive. Very often, it is cheaper for African consumers to buy imported European goods than their own local products.

The European Union is not in the position of “schooling” Donald Trump on trade, despite it being correct on the advantages of the free movement of goods.

Donald Trump is wrong on free trade, and seeing politicians like Speaker Paul Ryan, who years ago would gift Ayn Rand novels to his visitors, now defend Trump’s protectionist agenda is even more discomforting. Republicans in the U.S. have never been for protectionism, because they understood that it meant lower competitiveness and higher consumer prices. Trading with the world was always in the best interest of both Americans and Europeans.

It might not be the place of Jean-Claude Juncker, or any other EU bureaucrat, to “school” the American president about trade relations, but someone certainly needs to do it.


This article was first published by Newsmax.

Pictures are Creative Commons.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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