Macron’s victory raises hopes of an EU free-trade boom

 

Macron’s victory raises hopes of an EU free-trade boom

 

EU presidencies of Czech Republic and Sweden aim fire up free-trade talks now French elections are out of the way.

 

BY BARBARA MOENS AND SARAH ANNE AARUP

April 29, 2022 5:22 pm

https://www.politico.eu/article/re-election-macron-paves-way-for-revival-of-eu-trade-engine/

 

For the European Union’s biggest free-trade fans, one major hurdle to striking new deals just got easier to overcome: Emmanuel Macron.

 

In the run-up to last weekend’s election, the French president wanted to avoid upsetting his farmers by backing new trade deals with agricultural powerhouses like Latin America, Australia or New Zealand.

 

Macron’s reluctance was a particular problem for countries with a pro-free trade agenda — not just because France is a major EU heavyweight, but also because it is currently in charge of the Council of the EU, holding its rotating presidency. Some officials in Brussels blamed the French for a lack of progress toward finalizing trade deals in recent months.

 

All that is now changing. Macron is safely back in the Elysée Palace and while the French farm lobby will still weigh on his calculations, he will soon be passing on the baton of Council leadership to other countries that are keener on trade.

 

The upcoming Czech and Swedish presidencies will see two EU nations who are firm believers in the benefits of free trade take the lead on the bloc’s political agenda. And they can’t wait to get started.

 

"We need strong bilateral and regional trade deals," Swedish Trade Minister Anna Hallberg told POLITICO. "We can do so much more to strengthen the EU economically and geopolitically if we make better use of our potential to shape the global trade agenda."

 

Hallberg said she's very much looking forward to the presidencies of the Czech Republic, starting in July this year, and Sweden, beginning next January, to push the trade agenda forward. She said there is a lot of work to be done to conclude and ratify a number of trade deals. "We are quite impatient. The EU process with regard to trade agreements is too slow."

 

A diplomat from a third country said the Czech Republic and Sweden were very supportive of the EU’s free-trade agreement with that third country, and now they expect the two presidencies to make as much progress as possible on new deals.

 

Russia’s war in Ukraine is also giving the EU’s free-traders new momentum. For them, it shows the EU needs to open up to other parts of the world to diversify its suppliers and not be over-reliant on single sources for supplies. But one diplomat stressed it has been months since anything has happened on the bilateral trade agenda. “It’s now time to change that.”

 

Businesses are also growing ever more impatient to gain more access to new markets, especially given Russia’s war in Ukraine.

 

“There is a lack of political leadership in some countries to get trade deals ratified. It’s up to leaders to explain the benefits and take responsibility,” said Anna Stellinger of the Confederation of Swedish Enterprise.

 

Backlog of trade deals

A backlog of trade deals are waiting to be either concluded or ratified by the European Union.

 

Several diplomats from those third countries said they received positive signals from the European Commission that discussions would speed up again in the coming months and especially after the French presidency of the Council of the EU ends in June.

 

Officials and diplomats are looking to ratify modernized trade pacts with Chile and Mexico and conclude a deal with like-minded New Zealand. The Kiwi Prime Minister Jacinda Ardern could come to Brussels to conclude the deal as soon as early summer.

 

“In the current geopolitical setting and with the upcoming presidencies of open trading states ... I expect the trade agenda to be invigorated,” said the center-right MEP Anna-Michelle Asimakopoulou. “We need to see trade deals cross the finish line in 2022. I still see Chile, New Zealand and Mexico as the most likely.”

 

Other deals may be more difficult. The EU’s negotiations with Australia for example have been sucked into a political spat between France and Australia, which delayed the negotiations.

 

The most difficult will be ratifying the EU’s trade deal with the Latin American Mercosur countries of Brazil, Argentina, Uruguay and Paraguay. NGOs, lawmakers and some countries like France and Austria have been opposed to the deal — which the European Commission concluded in 2020 — for environmental reasons because of the continued deforestation of the Amazon rainforest.

 

No smooth ride

Although there might be new political momentum, ratifying free-trade deals will not be a piece of cake.

 

The era when trade deals were just about pleasing German carmakers and not infuriating French farmers is long over. Climate, labor rights and social concerns have all found their way into trade negotiations.

 

And while the French elections might be over, that doesn’t mean France will suddenly shake off its reputation as the bloc’s arch protectionist. In his election debate with Le Pen, Macron sought to portray himself as a chief opponent to the Mercosur deal.

 

“France has always confronted a challenge in advancing EU FTAs, regardless of partners,” a trade official said. “This is its traditional trade-off between Paris’ domestic sensitivities versus its vision of itself as a geopolitical major player.”

 

To some extent, Paris will still be in campaign mode until after the French parliamentary elections in June. A lot will also depend on what sort of majority Macron wins.

 

But while France will always be a big power to reckon with, there is a growing consensus in Brussels that Paris's domination of the EU trade agenda has gone too far, one diplomat said, adding: "It's time to take back control."

 

Giorgio Leali and Leonie Kijewski contributed reporting.