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Speech in the European Parliament, 20 June 2012

Danish Trade and Investment Minister Pia Olsen Dyhr’s speech in the European Parliament (INTA) on the results in trade policy during the Danish EU Presidency, 20 June 2012.

I told you in January that I welcomed the democratisation of trade policy with the Lisbon treaty, and that I looked forward to working with you. Today, in the last weeks of our Presidency, I am happy to be able to state that our cooperation has indeed been very fruitful and has produced democratically well-grounded results of importance for growth and employment in Europe. And, let me state on a personal account, that I enjoy working with you!

So, I will start off by thanking you for the good cooperation across the board.  Particularly, I would like to emphasize the important results that we have reached together in two important legislative files – the so-called “Grandfathering” regulation - and the GSP-regulation. Promise I will pass these good experiences in cooperating with the European Parliament on to my Cypriot colleagues, who will take over the Presidency after us.

The political agreement reached some weeks ago between the Parliament, the Council, and the Commission concerning both regulations is a practical demonstration of the intentions of the Lisbon Treaty in introducing co-legislation for trade policy. Through cooperation, dialogue and mutual flexibility we created a very good result together.

I am very satisfied that the compromise which was achieved with the Grandfathering regulation fully recognizes the new institutional reality after the Lisbon treaty. For both business and governments, this step is important in providing predictability and legal certainty as a base for trade and investment. I would like to thank the INTA Committee and especially your negotiating team under the leadership of professor Moreira for the cooperation.

EU’s GSP scheme plays an important role as the EU’s primary unilateral trade instrument to support developing countries. Very positive that broad support from the European Parliament was achieved in the vote at last week’s Plenary session on the compromise agreement reached between INTA and the Presidency.

Especially, thanks to INTA GSP-rapporteur Fjellner, the shadow rapporteurs and the Commission for the constructive and efficient cooperation with Presidency on this important file. It has been highly appreciated!

Our cooperation is vital – not the least when it comes to establishing EUs offensive responses to the global economic crisis in order to create growth and jobs. Current forecasts predict zero growth in the EU during 2012. However, this is only because of a net positive contribution of external trade of 0.7 per cent GDP growth.

The contribution from our internal EU demand is expected to be weak or negative. Therefore: Europe would be in recession without the positive contribution from external demand and foreign trade.

The Commission estimates that by 2015, 90 % of global economic growth will take place outside the European Union. Current EU trade negotiations could deliver an increase of more than two per cent of GDP or EUR 275 billion, adding more than two million jobs in the EU.

The Danish Presidency has worked to ensure that when Europe’s political leaders are expected to discuss growth and jobs in Europe at the EU summit on the 29th of June, trade will be an important part of that theme. This is very positive because it underlines that EU trade policy is an important part of the solution to the challenges facing Europe today. And it reflects very well the signals given by the Council on the 31rst of May. I expect that trade will be a part of the consideration of the European Council. And I expect to see a sizable paragraph on European trade in the conclusions from the European Council.

During the Danish Presidency, there has been progress across the board in the EU’s bilateral trade negotiations. It has been an important priority for us to prepare negotiations of a free trade agreement between the EU and Japan. The Commission and the Japanese government have done a great job to formally close the scoping exercise.

The next step is now the Commission’s presentation of draft negotiating directives to the Council. This is a great achievement. I am fully aware of the sensitivities surrounding these negotiations. But I would like to emphasize that the preparatory work done in cooperation with Japan is the most thorough and ambitious ever done in preparation of free trade negotiations.

Japan has committed fully to this process. Soon, we must make up our minds and say yes or no to go down this road with the third biggest economy in the world. So, I think there is good reason to be optimistic without -however - in any way losing sight of the fact that this will be a tough negotiation.

I know that within the European Parliament there is a great interest in this file. While respecting the Lisbon treaty provisions on the prerogative of the Council to grant negotiating directives to the Commission, I can assure you that there is an interest in Council in listening to the views of the European Parliament.

When committed to growth and jobs in Europe it was clear from the outset that we should as Presidency make it a priority to get better market access to the most important strategic and economic partners, including the BRIC countries, whose markets are increasingly vital for European exports.

On India, we have seen some progress in the on-going negotiations of a FTA. I would have liked to be in a position to say that we are now in the very final end game. This is not the case. There are still a number of difficult issues to sort out. We hope for substantial progress during autumn. But unfortunately, we seem less likely to be able to finalize talks by the end of this year.

Russia’s membership of the WTO is an important step forward. Russian ratification is expected very soon. It will give a boost to the Russian economy and provide new opportunities for our exporters - and also for Russian exporters. We hope that Russia will soon be ready to take the next step and engage in negotiations for a New Agreement with a trade chapter that goes further than the WTO commitments. The EU is ready to expand economic cooperation with Russia.

Brazil is also an important partner. Unfortunately, there has not been significant movement in the EU-Mercosur FTA talks, which holds great trade potential. The development in some Mercosur countries does not bode well for these negotiations. We should hold our hopes high and remain firm on our approach, insisting on free trade and the roll-back of protectionist measures. We look forward to the next exchange of offers.

Finally, there was a principal agreement at the last EU/China summit to negotiate a bilateral investment agreement, including market access. It is evident that we would stand much stronger in defending our investors’ interests, if the EU is united. Since there is now clarity on the post Lisbon rules for EU investment treaties, we can give high priority to this file. We expect that negotiations could be launched during the second half of 2012.

Also the Transatlantic economic relations have been very high on our agenda during the Presidency. Good contacts with the US administration have been established in the High Level Working Group on Jobs and Growth. Progress is well on its way with the interim report due by the end of this month and the final report by the end of 2012.

There is a considerable engagement on both sides to explore how far we can take this process. This could lead to the biggest ever FTA negotiation. But if such a negation is opened, we should have reasonable reassurance that it can be successful within a reasonable time frame. Furthermore, it would be a precondition that such a negotiation should strengthen rather than weaken the WTO and the multilateral trading system.

Additionally, on the bilateral agenda, I would briefly touch upon the Deep and Comprehensive Free Trade Agree¬ments – the DCFTAs - with EUs neighbours, which are, as the name implies, going further on approximation to the EU rules and regulations than the other FTAs:  With Ukraine work has been completed on an Association Agreement, including a DCFTA.

It is disappointing that political developments in Ukraine are going in the wrong direction, making it very difficult for the EU to sign this agreement, unless the Ukraine makes serious efforts to return to the path towards European values.

Fortunately, the negotiations on the DCFTAs are moving forward with Georgia, Moldova and Armenia. It is an important part of our Neighbourhood Policy to bring these negotiations to a successful conclusion and allow the three countries to integrate into the EU market.

Concerning the Southern neighbours, the scoping exercises with Morocco, Tunisia, Egypt and Jordan are still on-going. They should be concluded as soon as possible, allowing for negotiations to be launched. DCFTAs will be very important to advance the important reform process in the area.

Further, I am very happy to note that negotiations with Canada and Singapore have progressed to near conclusion during our term. And that a decision has been taken by the Council to launch negotiations with an important partner such as Vietnam in recent weeks.

Finally, in Council we agreed to sign the EU Colombia/Peru FTA and expect the decision to sign the EU-Central America association agreement later this month. Let me commend you on your scrutinizing of the EU-Colombia Peru FTA ahead of your decision regarding consent. We share the concerns about the human rights situation in the country.

I have read your resolution with interest. In my view it reflects a good balance between concern on the one hand and acknowledgement of progress on the other. The EU should certainly express its concern through a policy of engagement, dialogue and scrutiny. And the free trade agreement with its provisions on human rights and sustainable development is a central element in this regard.

Another example where we encounter questions about the relationship between trade policy and general political issues and human rights is the pending textile protocol with Uzbekistan. 

Parliament has submitted an interim report on this protocol and made a good argument concerning child labour in Uzbekistan. Council agrees on the objective of fighting child labour and urges Uzbekistan to accept an investigative ILO mission. The objective is real progress on the ground.

A word on the Pakistan Waiver:
The context is - as you know - that many Pakistanis are still suffering as a result of the devastating floods and subsequent natural disasters.

The European Council has made a commitment to Pakistan. The Commission has tabled a proposal.  Last week the Council presented a compromise in the first trilogue where the Parliament then presented some issues, which I believe we can find a pragmatic solution to so that we can reach agreement very soon. It is indeed a priority for the Council to close this file.

Returning to our efforts at creating growth and jobs: Open markets and competition are also crucial factors in this respect. The newly presented proposal on the access of third-country goods and services to EU’s public procurement markets addresses the lack of openness of some of our trading partners. We have initiated an important process by starting the discussions of this proposal during our Presidency.

Let me add a short word on Origin Marking, for which you know the proposal has been around for quite some time:
There has been a dead-lock in the Council since the original proposal of the Commission in 2005. However, the Parliament’s overwhelming support for a regulation did make us renew the discussion in Council, where a majority of Member States expressed a willingness to look constructively at a new Commission proposal for rules for voluntary origin marking. However, the European Commission has not finalized any such proposal yet.

On ACTA: As you recall the Commission has asked the European Court of Justice for an opinion on ACTA’s accordance with EU’s fundamental rights. The Council shares the Commission’s assessment that it will be useful with an opinion by the European Court of Justice on ACTA’s accordance with EUs fundamental rights.

In the present economic climate and protectionism on the rise, the WTO and the Doha Development Agenda are extremely important to the world economy. The WTO remains the principal top priority for the EU’s trade policy.

During the Danish EU Presidency, the EU has actively contributed with new and credible approaches to the deadlocked negotiations in Geneva and to strengthen the multilateral trading system in line with the conclusions from the ministerial conference in December. This has been no easy task, as WTO members still differ widely in their views on ways forward.

The EU’s approach has been based on key factors like inclusiveness, transparency, and multilateralism. Focus has been dedicated to areas, where results could be within reach, such as LDC accession guidelines and trade facilitation.

Let me emphasize that trade facilitation would be a potentially very important early harvest of the Doha Development Agenda, which would give benefits to all WTO members. The EU has also been open to discuss other initiatives like the plurilateral initiative on services. 

In addition to our focus on growth and jobs in Europe, trade and development has also been among the highest priorities during the Danish Presidency. EU is one of the most important partners for many developing countries. We should ensure that EU’s trade and development policies are mutually enforcing and complement each other.

In addition to our focus on reaching an agreement on a new GSP regulation, we adopted Council Conclusions on the Commission’s new Communication on trade and development.

It was the first communication on trade and development in some 10 years. And our conclusions were the first to be adopted at a Trade Ministers Council meeting after the entry into force of the Lisbon Treaty. The Communication reconfirms the EU’s important role within trade and development and adapts the strategy to the new global economic landscape by mainly focusing on the poorest and most vulnerable countries.

Finally, during the Danish EU Presidency, we have put green trade liberalization back on the table for the first time since the run-up to the climate summit in Copenhagen in December 2009.

At the request of the EU Ministers at the first Foreign Affairs Council on Trade during the Danish EU Presidency on the 16th of March 2011, the Commission presented four directions for concrete action at the second Trade Council meeting on the 31st of May: Multilateral, plurilateral, bilateral and enforcement.

While Ministers agreed that all four directions should be pursued, I would stress here today that one of the most interesting ideas on the table is the plurilateral solution. The innovative think tank International Centre for Trade and Sustainable Development in Geneva has proposed a plurilateral agreement called the Sustainable Energy Trade Agreement, or SETA.

I agree that this initiative is worth exploring. Also recent developments in APEC confirm that there could be a momentum for promoting green trade liberalization in a plurilateral framework.

Off course, we know that we face a tough challenge in securing backing from a critical mass of world trade to avoid free riders to such an agreement – the very same hurdles that have been facing the multilateral negotiations in Geneva.

It has been a pleasure to carry out ‘Europe at hard work” on all these important files during the Presidency in close cooperation with you and with the Commission.
It seems to be over all too soon.
However, I am confident that our Cypriot colleagues will do very well, also in your good company.
Thank you!  

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