by Paul Driessen, of the U.S-based Heartland Institute, one of the world’s leading free-market think tanks, and author of books and articles on energy, environmental, climate and human rights issues
As the EU looks ahead to the next five-year term of the new European Commission and Parliament, officials talk about playing “its full part on the world stage in geopolitics”.
Europe and the world heard it before, in 2019 when Ursula von der Leyen (picture) promised a ‘geopolitical Commission’ at the start of her first term in Brussels. It did not happen then, and it doesn’t look much more likely to happen now.
To be fair, it was a challenging five years.
The unprecedented Covid pandemic kept the EU focused on domestic questions of healthcare, lockdowns, debt financing and student learning. The Russian invasion of Ukraine shortly after ensured that European policy priorities remained largely regional.
But possibly the most significant blow to the dreams of a ‘geopolitical Commission’ was entirely self-inflicted: the EU’s obsession with the utopian Green Deal.
The regulatory regime of the Green Deal undercut EU competitiveness, particularly in agriculture and industry. As a result, the international ambitions of the European Commission were reduced to a domestic, protectionist agenda designed to hobble potential competitors by erecting non-tariff barriers affecting – and infuriating – Europe’s trading partners, whether they compete on productivity or cost.
Greens are triumphant, after their MEPs voted for Von der Leyen. No changes to the EU's "green deal", despite the protests from farmers & industry and despite the EP election losses of those having supported these extreme policies https://t.co/t2XStuYzPn #vonderLeyen
— Pieter Cleppe (@pietercleppe) July 18, 2024
Citing climate, the EU demanded that the rest of the world adopt its own crippling regulations – or risk losing access to its markets.
Brussels’ recent U-Turn on the EU Deforestation Regulation (EUDR) – which would force EU’s trading partners to certify the ecological purity of their entire supply chains – demonstrated that the law was a huge miscalculation in both climate and trade policymaking.
Even the famously green Biden-Harris administration opposed the Brussels proposals as too onerous and too hastily introduced. Imagine having to document and geolocate every cocoa bean in a bar of chocolate, every particle of coffee in an espresso, every chip of wood in a particle board.
Only Brussels would concoct such a thing.
Even Germany, the richest economy in the Union and arguably the most vocal advocate of planet-care in Europe, balked at the prospect of implementing the EUDR.
If geopolitics truly matters to the EU in the coming term, the EU Commissioner will go back to core principles on trade, not trade suppression. That means identifying the biggest opportunities in terms of markets; Europe, India and ASEAN are obvious examples.
Equally obvious, alienating the USA, the biggest and wealthiest market in the world, capable of self-reliance and an in-kind response to hostile trade regulations, does not seem like a smart idea.
The European Union has an interest in advancing international commerce, rather than wantonly raising regulatory barriers that developing countries cannot afford and developed economies won’t accept.
European economies are exporters – EU jobs and financial systems depend on selling high-value goods and services. A mercantilist, capricious, quasi-lawless global economy, such as that preferred by China, is not in Europe’s interest.
First, the starting point must be liberalizing, rather than raising barriers, and working with allied trading partners that have similar principles. And yet, the EUDR is a perfect example of a regulation where the EU has actively worked against its closest partners – not to mention that it been disastrous for the EU’s international image.
Indeed, outside of several single-issue NGOs and a handful of unelected EU officials, the Commission would be hard-pressed to find any EUDR proponents.
Second, trade policy needs to be strategic, not dogmatic. China and Russia, most obviously, are significant threats to the global economic order, and Europe has a responsibility to mitigate such threats.
Weaponizing trade is justified when the goal is preventing carnage in Ukraine, or stopping surveillance equipment from being installed in EU networks. Similarly, deliberate attempts to dump subsidized products or flood European markets should not be confused with free trade and must be addressed accordingly. In such cases, a smart, deliberate, targeted response is warranted.
Weber crows as von der Leyen walks back EU deforestation drive https://t.co/DborCVqFBL
— Franklin DEHOUSSE (@FrDe2059) October 3, 2024
The problem with the Green Deal’s EUDR lies in its indiscriminate, dogmatic application of punitive economic measures, including against allies like Malaysia, Mexico, Thailand and even the United States. Moreover, products targeted under the EU Deforestation Regulation (such as rubber, coffee, cocoa and palm oil) are key parts of Europe’s own supply chains. Palm oil from Malaysia, for example, is an ingredient in some of Europe’s most famous food and cosmetic brands. Besides, Malaysia already has its own mandatory sustainable palm oil standard, so there is no need to impose additional punitive EU regulations.
Similarly,Brussels shouldn’t impose deforestation restrictions on cobalt mining for wind energy and battery technologies – or on cutting trees for wind and solar farms and transmission lines – in trade-partner countries that are trying to comply with EU climate rules. International cooperation would be a good third principle for the EU to adopt. While rhetoric in Brussels is cheap, over the past five years the EU engaged in more bullying than cooperation, both toward its own member states and toward partners outside the Union.
In trade, unilateral and punitive barriers of the Green Deal too often beat dialogue and cooperation. This approach has not worked. It has enraged everyone from European and American businesses to Asian small farmers – understandably so. There is no reason for the EU to reject Malaysia’s Sustainable Palm Oil standards (MSPO), just because of an EUDR.
Other countries have analogous standards for their major commodities, which should be considered for acceptance. There is no reason not to address sustainability and environmental progress as part of a free trade, voluntary partnership or mutual recognition agreement – rather than through trade barriers and irrational regulations.
The new Commission can no doubt expect its share of the unexpected during its five-year term. But it should at least try to avoid self-inflicted injuries. Choosing economic growth over anti-competitive regulations would be a good start.
- The writer is author of Eco-Imperialism: Green power, black death (Ṍko-Imperialismus: Grüne Poitikmit tödlichen Folgen in German; Eco-Imperialismo: Potere verde, Morte nera in Italian; Eco-Imperialismo: La pobreze es el peor contaminante in Spanish)
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