Europe on the move

So the EU is clearly still roiling around in crisis land, with fears over a greek exit from the EMU probably being foremost on people’s minds at the moment.

However, there is a lot of movement by the EU elsewhere that is getting much less attention. Especially on trade and environment related issues, so I’ll go through a couple things that are good to be aware of.

First, France (or rather their new minister of “industrial revival”) is starting to make more noise with regards to carbon tariffs. In this article, which looks at this, they rightly point out that the idea was already brought forth by the Sarkozy government in the past, but ultimately didn’t get much traction. I’ve written quite a bit on carbon tariffs already, so we’ll see how much of this is hot air and posturing and how much is serious intent to expend political capital on putting in place external measures. But still, France is one of the powerhouses of the EU community so it is far from unimportant to note that their new government comes out swinging this early on carbon tariffs.

Second, European solar manufacturers are gathering for a big push to file a trade complaint with Brussels against Chinese market distortions. By doing this, they are following the lead of their American counterparts who similarly filed a case and got the US to slap antidumping duties onto imports of Chinese solar equipment. Does this mean Brussels will for sure go the same route? No, of course not, but the American precedent is likely to give them a bit of confidence in going this route. Also, for non trade nerds, this does not mean a WTO case will come out of this automatically. However, severe EU antidumping duties would make it a lot more likely as China would then see both key markets for solar basically putting up the shield against them.

Third, in EU renewable energies policy there are some tendencies that point to uncertainty beyond 2020 (which is the date that current measures stretch out to and have as their goal). Plenty of investors are likely to look at the uncertainties that surround a lot of renewable energy policy and think: Then what? The EU-RED was after all a hastily put together piece of legislation, and much hooplah has surrounded it, including doubts over its effectiveness and set of definitions. Getting more certainty on just what the thinking is in the commission will be helpful, though I’m not entirely sure that they have a firm idea themselves at this point. It’s still 8 years to go, but it’s still not exactly an ocean of time considering the lead time of investment and the current uncertainties prevailing (and all the debate that will surely arise because of this). Next months publication might give some indication of what the thinking is going forward.

Fourth and lastly, I wanted to note that DG Trade (the EU Directorate General for Trade) are rightly proud that their first EPA (Economic Partnership Agreement) has gone live with an African region. By gone live I mean it is starting to be applied with regards to four of the countries that have been involved in the negotiations: Madagascar, Mauritius, Seychelles and Zimbabwe. The EPA:s are an interesting instrument that have had some trouble in the past to produce results in the African region. The word “region” is likely to be a key word there since the complexity of the negotiations are upped significantly by having these agreements struggle for regional integration alongside development. Oh, and for those of you who began reading this paragraph thinking: What on earth is an EPA? You can find info here.
With regards to trade and environment, EPA:s hold great potential to deal with “adjacent” areas such as sustainable development as part of these bilateral negotiations. It is no secret that I am personally quite intrigued by the potential of bilateral agreements for moving environmental issues forward, so this is one instrument to watch, though it is something of a special case compared to “vanilla” FTA:s due to their strong development focus. Although that distinction of “normal” FTA is becoming more and more blurred as they are increasingly the primary tool for moving trade relations and governance forward, and with it follows a more holistic approach when engaging with them as well as, arguably, a deeper political aspect.

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