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26.01.2016.

Paper Tiger? EU Trade enforcement as if binding pacts mattered

A ground-breaking report by New Direction, the Foundation for European Reform, highlights the poor track record of the European Commission in holding trading partners to account.

The report's author, Professor Simon Evenett of the University of St. Gallen, Switzerland, found that the Commission only attempt to tackle 20 percent of complaints reported by European industry.

The report has also found that:

For the last three years for which data is available, the European Commission claims to have resolved 20 trade complaints per year, less than 10% of annual 'hits' to EU commercial interests
The Commission continues to target the smallest of trade complaints. Over half of resolved trade complaints involve EU exports of no more than €63 million, which seems like a high figure until it is remembered thataverage  EU trade is valued at €1 trillion each year.
The share of outstanding trade complaints from the USA has risen from 6% in 2009 to 15% in 2015.
Since the year 2000 the Commission has been less likely to refer cases to World Trade Organisation dispute settlement. Last year the Commission brought no cases at all.
The EU is no more successful in tackling protectionism by nations with which it has a free trade deal, than with nations with which it does not, somewhat undermining the value of these agreements in the first place.

Commenting Simon said:

“The ability of the EU to enforce trade deals is questionable. Half-hearted support from exporters can be anticipated if they believe the EU won’t enforce trade deals. What’s at stake here is an important part of corporate support for the EU’s trade agenda.”

“If trade partners know the EU won’t rigorously enforce trade deals, then more deals will be concluded, but they’ll mean less for European business.”

“The EU’s Market Access Partnership needs to be updated. DG Trade (European Commission) must take a harder line with trading partners, bringing more matters before WTO judges, if rule-breaking is to be deterred.”

Ian Duncan, Secretary General of New Direction added

"Free trade agreements should be the bedrock of everything the EU does, but they are not worth the paper they are written on if they are not enforced. This report highlights that the Commission has an unambitious target for resolving cases where European companies are discriminated against, and that some cases from twenty years ago are still outstanding.

The Commission must take heed of this report and take steps to restore faith in their ability to hold trade partners to account"

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