EU Trade Commissioner Cecilia Malmstrom talks to political editor Audrey Young about the EU's fightback against Donald Trump's tariffs, secrecy in negotiations, and why it has taken so long to start trade talks with New Zealand.
Do you think the EU is now playing a leadership role in trade because of the vacuum created by the United States?
We certainly cannot play that role alone but we have noticed that many countries turn to us and ask us work together with us and to stand up for global trade, for global rules, for the World Trade Organisation and stick together to show that we believe in trade. We think it's good and we do not like when countries are not following the rules.
Do you agree the importance of EU leadership generally has been elevated by the events in the United States, not just in trade?
Well we are one of the most important economies as one and we try to not only be a big economy but also the factor of a whole history of coming together to make compromises and to work for peace is also reflected in our foreign policy. It is very value-based and now we see that the organisations that we together have created after the Second World War are being endangered by the US in not following the rules…Then of course we have to stick up together to defend them and then we have noticed that countries like New Zealand, Australia, Japan, Canada, Mexico, we gather together and we defend these organisations. We think they are important.
We want to do trade but it has to be done according to the rules and if we do that, trade is a force for good. It's not something where, if I win, you have to lose. We can both win.
Can you explain your counter-measures against the United States tariffs on EU steel exports (25 per cent) and aluminium (10 per cent)? Will they be in place tomorrow?
Yep, European time midnight, between Thursday and Friday [10 am Friday). It's a list of products that we have put together with our 28 member states imposing tariffs on things that were tariff-free before, on aluminium, on steel, on machinery, on certain agricultural products, orange juice, peanut butter, some clothes, some beverages, bourbon…
Specifically targeted at areas of Republican politicians?
Yes, by coincide they are.
Have you heard whether there is any effect from those Republican politicians, putting pressure on the President?
They haven't entered into force yet, of course. I think they will enter into force because they are important products and we need good forces in the US to show that this is not good for either economy. We don't want to do this but we have to react because we do this as a response - and this is perfectly legal you can do this within the WTO….but what they do to us and to New Zealand and the rest of the world is to impose tariffs on aluminium and steel arguing it is because we are a threat to national security. That's outrageous.
Is US moral authority undermined when they run such vacuous arguments?
It depends who you ask. The president has certainly promised in his election campaign to do this and now he delivers so from his point of view he is extremely consistent and apparently his voters like it.
Why are New Zealand and Australia almost the last cabs off the rank for FTAs with the EU?
That's a good question actually. I thought when I entered this job four and half years ago almost that we had a free trade agreement with Australia but we didn't. But now we are here. So I think it is important and it has become even more important both economically because both Australia and New Zealand have TPP11, which we welcome, and many other trade agreements. That makes our companies think they want to be here on the same conditions…and this is also a strategic alliance.
Both Australia and New Zealand are really friends of the international system and convinced that we can do good trade agreements. And with minister [David] Parker, we have the same ambitions to have really progressive trade agreements where we deal with sustainable development, climate change, labour conditions, things like that as well. So I really think this can be a global standard where we can agree to not only co-operate not only between us on these issues but also setting out areas of co-operation in the rest of the world.
Do you expect the FTA to be more ambitious than the TPP or on a par with it?
It is hard to compare because this is between us and New Zealand, and with 11 countries with such different systems and economies, you'll obviously make all kinds of concessions and compromises. I don't know, I think on sustainable development we certainly have the ambition to be more ambitious.
With New Zealand, which is hugely deregulated already, what's in it for Europe? There's not really much in it, is there?
There is. You are a very fast growing economy and you have an exciting growing service sector with many exciting innovations that we would welcome maybe to be part of. Our companies would want to be here on the same conditions as other companies in the region, in services and public procurement markets and so.
So there are economic benefits for us. And then there is the strategic partnership that I think is very important – and for New Zealand obviously the 500 million-people is very interesting.
Can you talk about the transparency with which you conduct trade negotiations? Has the need for secrecy in trade talks been exaggerated?
I come from a country where we have had official publication in our constitution for 400 years. It's been a good thing. Of course when you have the final tricky negotiation, you can't have the TV cameras around but you can publish a lot. We are publishing the mandate, we are publishing our background papers, we are doing very reader-friendly material on different subjects, we publish the chapters we sent to our counterparts, afterwards, we do summaries of every trade negotiation round and put them on line.
I have travelled extensively across the European Union with my team as well to hundreds and hundreds of public meetings or town hall meetings. We call them citizens' dialogue but it is the same thing. We will have one together tomorrow in Auckland with Minister Parker. And we are done with an agreement, even before it is legally scrubbed, we publish it, the whole of it. It's usually over 1000 pages.
So you don't build up that head of pressure like there was with TPP which was negotiated over five years, before the Big Reveal?
No. I think that is not a good thing because people want to be involved. There are a lot of myths and fears on what trade is about. People have the right to be involved because we are negotiating on their behalf. We always have an advisory group with representatives from civil society who regularly meet with us to talk about specific trade items and we value their advice.
It could be the trade unions, the small business associations, consumer networks and by that you demystify the trade agreement. We have not seen that [transparency] has in any way negatively affected our positions in trade negotiations.
Have the mass arrivals to Europe, many from northern Africa, had negative flow-on effective on the receptiveness of Europe to trade and engaging with the world?
Not directly. This is a very complicated and difficult debate and we have a variety of different opinions there, of course. Indirectly it effects [it] because this is part of a globalised world. People move, people want to move, people are seeking a better life. Some of these people are refugees escaping from war and terror. Others are escaping a life they didn't want for their children and might not have the right for asylum and they want a better life.
You have a lot of politicians who don't want that. They want closed borders, who don't want to deal with other countries, they don't want to trade with other countries, 'we want to build walls' so it plays into that anti-globalisation movement that some populist politicians are using. But it doesn't play directly into our trade agreements because what we are talking about is to facilitate specific groups to move on a temporary basis. We have that in all trade agreements. But we have a different political climate on this, not only in Europe. Maybe you don't have it here. But you've seen the rise of very populist and xenophobic movements in Europe.
But the xenophobia has not stopped you notching up quite a few trade agreements as Trade Commissioner [including Vietnam, Japan, Mexico, Canada].
You should embrace the positive sides of trade agreements because it also linking people and we are creating better conditions for our citizens. Of course we are also talking to many African countries [about] how we can help you to create better conditions in your country so that your people don't feel they have to go to Europe for a job. These are asymmetrical. We are opening up much more than we are asking from them because they have infant industries and they have specific sensitive sectors. We are trying to engage with them as well to see how trade – it cannot solve the problem of course – but can play its part to create better living conditions in many of these countries.
Would you like to see the WTO change so that one country or a tiny group of countries don't have veto?
That is very difficult because that is the foundation of the WTO because it is a united nation body – it acts by unanimity. That is a good thing because it means that you have the whole world almost with you but it has led to a situation where some countries have vetoed others just to discuss other items, and that we cannot have.
Of course if we are to set up global rules decided for everybody, then everybody has to agree.
For instance there are more than 80 countries in the world who thought it would be good to elaborate global rules on e-commerce.
It could be anything from what does an e-commerce contract looked like, what does it look like, how do we deal with spam, what criteria do you need to have an e-signature confirmed. These are basic things but it would immensely facilitate [business] across the world.
Eighty countries wanted to move on these issues, rich and poor, from all over the world, not only the west. Then other countries tried to stop us doing this. We need to move on in a plurilateral way in conformance with WTO and open for everybody to join. Maybe this can inject some new energy in the WTO system. There are other initiatives floating around. That could be one way to inject some new hope into the organisation, which is really worth preserving.