Toespraak eurocommissaris Mandelson over globalisering op SER Symposium in Den Haag (en)
SPEECH/07/499
Peter Mandelson
EU Trade Commissioner
Globalisation and Europe
SER Symposium on Globalisation organised by Ministry of Economic Affairs
Den Haag, The Netherlands, 3 September 2007 at 15h40
In this speech delivered in the Hague at the Dutch Social and Economic Council on 3 September, EU Trade Commissioner Peter Mandelson :
Renews his call for political leadership in explaining and defending the benefits of economic change in Europe. Mandelson will warn that if Europeans are offered what he will call "false choices" between globalisation and social justice, they will be tempted to "reach for the brake" on both the EU and globalisation.
Offers his first full public assessment of the recent energy saving light bulbs anti-dumping case: a case which, he will argue, captured many of the complex problems of adapting to economic globalisation in Europe.
Speaking alongside Dutch Trade Minister Frank Heemskerk at a conference on The Challenges of Globalisation, Mandelson says: "On both left and right and in the opportunistic centre - people are too often being told ... that an open economy is the starting line in a race to the bottom - a race that Europeans can no longer win because others do not play fair or abide by the rules. Nationalism and populism and protectionism feed on these arguments". Mandelson argues that in Europe: "we still haven't really worked out how to be political about globalisation - except, in most cases, by opposing it. And that's our problem".
Mandelson offers his assessment of the recent debate on anti-dumping duties on energy-saving light bulbs as an example of the complex problems thrown up by globalisation in Europe. As the Commission approaches the publication of recommendation in its review of Trade Defence Instruments, Mandelson says that the light bulbs debate has emphasised the issues that need to be addressed.
Mandelson says: "Imposing punitive measures raises a cheer for politicians. It may provide some temporary relief. It is often both justified and right. But if it is inhibiting European companies from pursuing rational production strategies - or as in the lightbulbs case, flying in the face of our stated policy on energy conservation and the realities of production in Europe - it can also be counterproductive.... How do we define what is a European company in a world of global supply chains and multi-national assembly lines? The Commission's proposal in the energy-saving light bulb case was to build a consensus that accepted the duties were no longer warranted and should be scrapped, but that they should be removed over the course of a year to allow time for adjustment to new patterns of trade and production. We will probably not please anyone fully - which is the sign that we struck the right balance.
In the coming weeks the Commission will be considering a review of its trade defence instruments... All the arguments should be aired. Through the proposals I shall be putting forward for the review of trade defence instruments, I want to give the lead to a constructive debate, not a divisive one. A debate that strengthens our unity in pursuit of modern, strong and effective trade policy."
Pulling on the brake?
We all see a world that is changing incredibly fast and we are all trying to make sense of it. Running through our politics there is a very pervasive anxiety about the speed of global economic change and what it means not just for the poor and the rich, but for everyone.
Most people's instinct when they feel they are travelling too fast is to reach for the brake. And politically that is what is happening, in many of the EU's member states where people are asking whether enlargement and institutional change will help us deal with the economic pressures, or make them worse. So when we asked those people here and in France how they felt about the draft constitution in 2005 - they pulled on the brake.
The insecurity and uncertainty are not surprising. Old jobs being replaced by new jobs. Manufacturing jobs often being replaced by jobs in services and the knowledge industries.
China's unnerving, high speed, rise to manufacturing superpower status. Foreign capital buying not just our government bonds, but shares in companies we have actually heard of, banks from our high street.
Many Europeans think globalisation is a threat rather than an opportunity - they are being told by politicians that it is taking them for a ride as we, in Europe, obey the international rules of the game while everyone else, allegedly, flouts them. Not surprisingly, any time politics or politicians offer a brake you can be sure many will be tempted to pull on it.
A better view of the road ahead
I can understand this reaction. Because not only do people feel they are moving very fast but they are being given far too little sense of where the road ahead is taking them.
The burden to explain change rests on those who believe that change is good, or necessary. And the problem is that too many political leaders in Europe are failing to do this because it is politically expedient not to or requires too much courage or effort to do so. Defenders of globalisation too often come across as doctrinaire and dogmatic: free market fundamentalists. Or as people who are resigned to the effects of globalisation flowing over us, untouched and unshaped by human hand.
But if we can't explain the huge benefits of economic change, then we will never convince people that it is worth confronting the costs. And if we can't acknowledge the costs of economic change, then we can't create a politics and a policy that addresses them.
Most of my adult political life I have been looking for ways to make political sense of this problem. To bridge the political divide between economic change and equitable development. Between openness and strong societies. Between economic efficiency and social justice.
I believe the choices between these things are false choices. There is no social justice in a weak economy or economic strength without high standards of welfare. There is no equitable or sustainable development in a world that closes the door to the possibility of open trade. We know these things from experience.
But at the extremes of our politics - on both left and right and in the opportunistic centre - people are too often being told that the choice is there to be taken. That we can stop the world and get off and live in isolation, if necessary, from others in the global economy. That we can protect our own industries and, if necessary, close our own markets while maintaining access to the markets of others. Or worse, that an open economy is the starting line in a race to the bottom - a race that Europeans can no longer win because others do not play fair or abide by the rules. Nationalism and populism and protectionism feed on these arguments. I have no problem with asking tough questions about economic change. Scepticism is healthy and globalisation needs its intelligent critics. There has to be an open debate, and a balanced appreciation of the costs as well as the gains. But we still haven't really worked out how to be political about globalisation - except, in most cases, by opposing it. And that's our problem.
A positive politics of globalisation
We need a positive politics of globalisation. Proactive and honest and practical. One that explains the benefits of rapid economic change. One that says: the reason why your clothes are more than one third cheaper now than they were 10 years ago is called China. That says: the reason why European exports are rising at 8% a year is because we are benefiting from the new markets that globalisation is creating in the growing emerging world. One that says that far from being naïve, Europe's embrace of globalisation has made us more prosperous than any society in recorded history.
One that recalls that for every job lost to economic or technological change in Europe in the last decade we have created more than one new job. Hundreds of millions of new jobs in the developing world haven't cost jobs in Europe on aggregate. And they have lifted hundreds of millions of people out of poverty in developing countries.
Of course the aggregate isn't everything. Economic change can hit individuals hard. And economies don't vote. Individual people do. Economic adjustment needs to be fair. In current economic growth, returns to capital are exceeding returns to labour. We need to show solidarity with people dealing with change through modern welfare systems. We need flexible labour markets to help workers move. And because people will move between industries - some sectors growing while others decline - we need life-long education and training to help them do so, and financial support while they do.
We need to try to ensure that the transition for industries and regions is a smooth and predictable one, with public and private sectors working closely together. And we need modern, effective, redistributive social systems. Globalisation will not be politically sustainable if all the gains appear to be going to the top 1%, with the middle class hollowed out and the poor forgotten all together.
The role of trade
We also need a politics that talks straight about the role of trade. Trade is not the source of every ill, injustice or imbalance in the international system. Nor is it a magic wand. It's a conveyor belt of change that in the right conditions creates jobs and growth. And yes, most of the time, I think it is better if trade is free, and I have the economic and real-world evidence to back me up.
But not always. Not for everything. Not always for our essential public services and not entirely for agriculture. Not at the cost of fair treatment for workers or of the environment.
Every EU trade deal is submitted to a sustainability assessment for that reason. You won't see Europe pushing for free trade in rainforest timber. Or extending preferential trading terms to Belarus while it fails to meet its ILO commitments. You also won't see Europe allowing some abstract argument for free trade to trump strong consumer protection rules backed up by credible science. The recent problems in China have made it very clear why this should be the case. In all these respects, "Community preference" will operate.
Fair and unfair trade - lightbulbs.
And we should also be ready to insist on fair trade. A global playing field should still be a level playing field, albeit with due allowance made to support weaker players in the developing world.
Europe is ready to accept the comparative advantages of the emerging economies but we do not accept unfair practices to add to these natural strengths. That means ending unfair state intervention in export industries, living up to WTO commitments on market access and respecting intellectual property rights.
But we need to be careful to separate unfair trade from trade that is simply very competitive. And we need to recognise that even the apparently clear-cut issue of unfair trade can be complex. We have seen an example of the sort of problem globalisation throws up in the decision the Commission had to take this week about dumping duties on energy saving light bulbs imported from China by European companies, including Philips. Dumping is a bad thing. We are right to use trade defence instruments to try to curb it. Defending European production against unfair subsidised exports from other countries is the flipside of market openness.
But how do we do this effectively, and in the interest of European companies and consumers, in circumstances where European industry is outsourcing production in third countries in order to remain competitive? More than half of Chinese exports are produced by foreign owned companies, many of them European. When is a Chinese export Chinese and when is it European? If producing cheaply in China helps generate profits and jobs in Europe, how should we treat these companies when disputes over unfair trading arise? How do we define what is a European company in a world of global supply chains and multi-national assembly lines?
An automatic response to protect individual jobs and industries in Europe is understandable but it is often no longer a sufficient assessment of our real interests. There is little point in the long run in trying to preserve labour intensive production here. We should certainly use trade defence measures to ease transition and adaptation, and to fight cheating. But in these sorts of cases - whether its Chinese light bulbs or Vietnamese shoes - we need to understand the realities of the market and be realistic about the effects of our actions.
Imposing punitive measures raises a cheer for politicians. It may provide some temporary relief. It is often both justified and right. But if it is inhibiting European companies from pursuing rational production strategies - or as in the lightbulbs case, flying in the face of our stated policy on energy conservation and the realities of production in Europe - it can also be counterproductive.
The Commission's proposal in the energy-saving light bulb case was to build a consensus that accepted the duties were no longer warranted and should be scrapped, but that they should be removed over the course of a year to allow time for adjustment to new patterns of trade and production. We will probably not please anyone fully - which is the sign that we struck the right balance.
In the coming weeks the Commission will be considering a review of its trade defence instruments. This will be an opportunity to discuss our responses to the complicated issues highlighted in this case, for example how we define community production in Europe in applying trade defence measures. This requires everybody to think seriously about the issues. All the arguments should be aired. Through the proposals I shall be putting forward for the review of trade defence instruments, I want to give the lead to a constructive debate, not a divisive one; a debate that strengths our unity in pursuit of modern, strong and effective trade policy.
Conclusion
There is no point in pretending that the world will not keep changing. The competitive pressure on us is not going to go away. There is no blanket to pull over our heads.
Manufacturing and agriculture in Europe are both going to keep on changing, and some of that change will be difficult. But we are still the world's biggest agricultural exporter, and still the world's biggest exporter of industrial goods, and still the world's biggest investor. China and India will continue to move up the value chain, but so can we. And their growth creates new markets as well as cheaper goods and more effective supply chains for us.
The role of international trade policy is to keep goods and services flowing into and out of markets as freely as possible. We will do this using multilateral and bilateral tracks of discussion and negotiation with our trading partners. And, when necessary, we will resort to our trade defence instruments. We should certainly be defending the WTO as the single best shot at creating an equitable global trading system - for us and everyone else.
That is why the Doha Round is so fundamentally important. Doha could anchor the emerging economies more firmly in the WTO and its system of international trade rules. A Doha agreement would enable developing countries to grow faster, and open the markets of the emerging economies further, and lock in the access we already have to global markets. This is the best insurance policy against a global recession or resurgence of protectionism - not just in the US, but in growing middle income economies too.
The role of the European Union is vitally important in trade policy. If we want the weight to shape the globalised world we need to act together. The EU is our own continental answer to an age of continental economic powers.
As I have said, Dutch voters perhaps pulled the brake on Europe in 2005 because they felt it was going too fast or going in a direction they were uncertain about. A Europe of six or even twelve is not a Europe of 27. And it is true that in many ways the rationale of the EU in the twenty first century has changed from the reconciliation and reconstruction of the post-war decades when the Union was founded.
Now, in the global age, the EU is the multiplier effect that gives all European states a more powerful voice on the global stage. It's how we make a difference on a critical issue like global warming. How we shape global rules and global agendas. The institutional reform that Europe needs will only be accepted by European citizens if they understand why we need it. People won't support European institutional reform, or the changes in the European mini-reform treaty, in a vacuum. But they will support the right reforms for the right reasons. A politics that makes sense of globalisation also has to make sense of the European Union. And like the EU, globalisation is sustained by political choices, and it could be undone by political choices. We'd all be much poorer if that happened.
It would be a serious mistake to assume that the current openness of the global economy is carved in stone. That the huge economic benefits of globalisation are irreversible. However pervasive the economic forces that drive global change, globalisation is ultimately governed by politics. And if we want to preserve it, we have to explain it and shape it better.