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25 November 2006
Trade on trial

I was at a debate on Thursday evening about EU trade policy: is it, broadly speaking, doing the right things?

The pro case was that international trade is a good thing, enabling countries to make and export whatever it is they do best and buy the rest. Against that basic principle, the EU’s policy is to negotiate the progressive opening of markets and reduction of trade barriers around the world. The speed at which this policy can be implemented depends on the willingness of other trading partners to join in those negotiations: the suspension of the current Doha round of WTO negotiations is the consequence of a failure to agree.

Complaints of environmental or social problems in other countries were met with the answer that trade policy cannot do everything. Other countries themselves make their own domestic policy choices and some will make better choices than others.

There were several different strands to the case against EU trade policy, and the debate lumped them all together rather than separating them out properly. This was a bit unfortunate for the clarity of the discussion. Essentially the arguments against the trade policy fall into two, contradictory categories, and it only added to the confusion when individual opponents of the trade policy resorted to both of them.

The first complaint was based on the recognition that trade was in principle a good thing, and objected to the EU’s position in negotiations. Specifically, it was argued by Oxfam that the EU should make more and greater concessions to keep the development negotiations on track. Friends of the Earth argued that the WTO should have greater powers to manage trade opening to ensure that environmental and other considerations were taken into account.

The second complaint was that international trade is in principle a bad thing, for reasons of environment and also because it undermines the self-reliance of individual countries. Rather than objecting to subsidies, tariffs and other trade barriers, this argument wants more of them. It was strange to hear Friends of the Earth make this argument, too: less surprising that a British Green MEP might do so.

In the end, both of these two arguments against EU trade policy are arguments about the institutions that govern trade, not the trade itself. Taking the first objection first, it seems wrong to me that the EU should somehow be asked to go easy in the negotiations because its negotiating partners are weaker and less able to negotiate well. An imbalance in power in the negotiations needs to be tackled at source, not by trying to tidy up the outcomes afterwards.

The weak, poor countries are poor because they are weak and not weak because they are poor. The rich, powerful countries should adjust not the balance of wealth in the world but the balance of power. That way, if the poor countries so wish, they can exercise more influence in global decision-making and gain more benefit from those decisions as a result. Leaving the balance of power untouched merely perpetuates dependency: the poor countries will remain dependent on the rich for any benefits that the latter might care to pass on. Colonialism was a bad thing when undertaken formally, pace Gordon Brown, and it remains wrong as an informal practice too.

An illustration of the problem in the second argument lay in the objection by Caroline Lucas, the Green MEP, to the claim in the “What has Europe ever done for us?” animation (which you can watch here) that the EU has brought both environmental protection and cheap flights. The second of these counter-acted the former, she said. Nonsense, of course. It’s not cheap flights that cause pollution, but flights, however much they cost. It can’t be a good thing for flight prices to remain high because of bureaucratic obstruction and a lack of competition and innovation in the airline business. If there are externalities, such as carbon dioxide emissions, then these should be priced into the cost of flying. The cost of pollution should be reduced by direct and targeted measures rather than indirectly by exploiting national borders. (This is the argument against oil, rather than against foreign oil.)

(As an aside on the airline problem, there was an interesting article in the Guardian earlier this week arguing that a common European air traffic control would reduce flight times and therefore carbon dioxide emissions by allowing for more direct routes and less stacking. Fuel is wasted because of the retention of a national system. Where do the Greens stand on that, I wonder?)

I should add in a word from the sponsor. The debate was organised by the European Movement in Brussels as part of its Speak Up Europe programme. There will be more events along these lines in the months to come. There will be more reports on this blog, too.

Posted by Richard Laming at 22:08 1 comments

18 November 2006
Why is the constitutional treaty so long and complicated?

A very interesting seminar today on the future of the constitutional treaty. A full report will follow soon in the news section of the website, but here are some quick reactions.

The basic debate was between Andrew Duff MEP and Wayne David MP, each a deeply profound pro-European with a clear insight into the needs and demands of European politics. What made the debate work was the very different conclusions they had reached: Andrew introduced his Plan B (read more about it here) which aimed to revitalise the constitutional process by addressing public and popular concerns about the text of the treaty; Wayne’s view was that any kind of treaty was more than public opinion could stand and that we should think instead of practical reforms that would make a visible difference.

In the terminology of Four routes to the new Europe, which you can read here, Andrew is proposing route 3 and Wayne route 1.

Michael Siebert, from the political section of the German embassy, explained the background and was very clear on some of the obstacles facing the constitution but was also clear on the political support that lay behind it. Neither Wayne nor Andrew could have been entirely happy about the picture he painted.

One question came up that needs an answer here. Why can’t there be a simpler text? The current treaty is far too long and complicated: would not clarity be preferable?

The immediate answer is yes, of course, but one needs to think where the complications come from. The starting point is a clear, simple proposal, but no plan survives contact with the enemy. As soon as the member states see a clear, simple proposal, they start to propose small amendments that might suit them better. Opt-outs emerge, exceptions are introduced, variations worm their way into the text. No-one does this because complication is itself a value, they do it because complication is worth tolerating in the name of a slightly more favourable set of rules.

The end result of everyone insisting on their own amendments is that clarity is lost. A student essay has a word limit – new material can be introduced but only at the expense of something that has already been included. The question is not “do I want to include this” but “do I want to include this in place of something else”. Member states are faced only with the first question, and because the text has to be agreed by unanimity, each amendment is forced on all the other member states, too. If they object, there might be an argument, but often they will think that it is not worth the argument because they might need the support of the particular member state over something else.

This means that, left to the current negotiations, the text will grow and grow. Even though everyone sincerely wants a clear and simple text, the methods used do not allow it to arise.

A clear and simple text will come from a common understanding among the member states of what the European Union is for and how it should function. Complications in the text indicate the absence of such a common understanding. The length and difficulty of the text is a symptom of a wider problem, rather than simply a problem in itself.

Posted by Richard Laming at 19:08 0 comments

15 November 2006
Suits you

Britain is no longer a sovereign state: it’s official. Summoned to give evidence to the United States Congress on the progress of the war in Iraq, Tony Blair jumps to attention. A video link is set up so that he can explain his thinking and answer questions from national parliamentarians. (Read about it here and here.) The things he has to do when the Americans ask.

For we know that he actually thought this was the wrong thing to do.

When an enquiry was suggested in the UK, the response of foreign secretary Margaret Beckett in parliament was to say this:

“Is this the moment to take a decision and a step of the kind recommended in the motion? My answer is a resounding no. There is absolutely nothing in the unquestionably difficult and delicate situation in Iraq today that makes this the obvious and right time.”

And we also know, from Tony Blair’s response at his last press conference to the questions about the death penalty passed on Saddam Hussein (“she set out the position for the government yesterday and that is all I want to say on it, right”) that Margaret Beckett is the authoritative spokesperson for the government on these questions.

And if it’s the wrong time for the UK to have such a discussion, it is even more true for the Americans, only more so, given that they have so many more soldiers deployed in Iraq. If, as Margaret Beckett said, “Our words in the House today will be heard a very long way away. They can be heard by our troops, who are already in great danger in Iraq. They can be heard by the Iraqi people and by their Government”, words said in the United States congress will be heard even further away. Particular now that it has been demonstrated so clearly which country it is that is making the decisions about whether to stay or go.


¤ ¤ ¤


Tony Blair’s speech last night at the Mansion House, which you can read here, restated his now traditional conviction that Britain must remain both allied to the Americans and engaged with Europe. I agree with that, and agree also that there is no contradiction between the two. I do doubt, though, that “our partnership with America and our membership of the EU are precisely suited to Britain.”

Our partnership with America is hopelessly unequal: if power without responsibility is, in Baldwin’s phrase, the prerogative of the harlot down the ages, Britain’s relationship with America gives it responsibility without power. I recoil from the search for a suitable metaphor, but you know what I mean.

And our membership of the EU doesn’t feel quite right, either. We’re not in the euro and show no signs of joining. We are too often on the edge of things. Tony Blair himself feels obliged to qualify his statement about EU membership with this:

“Provided it eschews grand institutional visions and concentrates on grand practical visions - for prosperity, in energy, fighting crime, in developing defence capability - it has a huge, even exciting future.”

If by “grand institutional visions” he means the constitutional treaty or something similar, he should remember that up until the French and Dutch referendums last year, he was an advocate of that treaty, and he has never repudiated it since. He has merely noted that it is no longer on the table.

It would be fair enough to say that the French and Dutch No votes have changed the landscape, but what they have changed is a judgement about what might be possible, not a judgement about what Europe needs. British objectives should remain the same, the route to attaining them will be different.

But the thought arises: what if British objectives have changed, too? What if Tony Blair’s preferred plans are no longer what they were? If this is the case, then British policy on Europe will indeed have been decided by the popular vote, however this would be the popular vote in France and Holland and not actually in the UK itself. As I said, no longer sovereign.

Posted by Richard Laming at 14:25 0 comments

12 November 2006
Diplomacy

An interesting talk yesterday by Carne Ross, formerly of the Foreign Office and now acting as an “Independent Diplomat”. (You can read about him here)

He had an engaging and powerful case to make, and an engaging and powerful style with which to make it. After a 15 year career as a diplomat, he had resigned from the Foreign Office, uncomfortable with the decisions it was taking and the way in which it was taking them. His message yesterday was that diplomacy did not work and should be replaced by something else, but that he did not know yet what that replacement should be. In the meantime, he was working with otherwise unrepresented communities to give them a voice in the diplomatic circles of the world.

I remember a talk given by Murray Forsyth, then professor of federal studies at the University of Leicester, when he drew an analogy with university departments. There is the study of politics and government, which looks at the effect of rules, openness and elections, and there is the study of international relations, which is based on uncertainty, secrecy and force. Federalism, he said, aimed to make international relations more like politics and government. I think that’s right.

A good example of why this is needed lies in the sheer extent of international relations and diplomacy these days. All kinds of decisions which were formerly national decisions – subject to the principles of politics and government – have become international because of the extent of modern interdependence. Economic and environment issues, for example, lie in the hands of diplomats in the way they never did before. The use of the methods of international relations will, as a result, reduce the scope of politics and government within individual countries, creating a democratic deficit.

Earlier this year, I was able to look at this problem in the context of the EU sugar regime. This is a perfect example of politics and government being handled in as international relations. I had access to some of the secret documents that were circulated to the national governments and so was able to identify what difference civil servants were able to make at the private meetings, as opposed to the public meetings in which politicians participated. The impact was staggering.

Decisions by civil servants increased the overall cost of the sugar regime by more than 700 million euros per year and increased the annual compensation budget by 300 million euros. These are hardly small sums of money. 700 million euros is approximately the annual EU budget for Trans-European Networks, while 300 million euro is more than the EU spends on its environmental programmes. Civil servants decided this, not ministers. (You can read the paper here.)

What makes this even more absurd is that the traditional reason for secrecy – national security – was completely absent. This was a discussion about the price of sugar, which is a pretty harmless substance, and which will in the end be expressed in law. The whole idea that government decisions can be stitched up like this out of sight of parliamentarians and citizens is wrong. Carne Ross is right.


¤ ¤ ¤


There are a couple of interesting discussions of this point within the Federal Union archives.

The first is an extract from “The restoration of Europe”, written by Alfred H Fried in 1915. He writes that “Secrecy is not the only danger of diplomacy. It is dominated by a spirit which would do honor to mediaeval chivalry.” You can read the whole extract here.

And “The Federal idea” by H N Brailsford (published by Federal Union in 1940) has this wonderful description of the problem (which you can read here):

“For let no one suppose that power is dormant and inactive during an armed peace. It gives resonance to a diplomatist's voice. No one listened to Mr Eden or Lord Halifax as they might listen to a master of dialectic, or a golden-tongued orator. If their words had weight, it was because battleships and bombing planes were ranged behind them, and the wealth that could buy more ships and planes. When Herr von Ribbentrop and Lord Halifax exchanged Notes, the result was hardly affected by the literary grace of their periods or the cogency of their logic. Two considerations counted: what armaments lay behind their logic, and had they the will to use these tools? That is always the hidden play behind diplomacy.”

Posted by Richard Laming at 10:26 0 comments

01 November 2006
Flying high

Switching from climate change to the airline industry, from effect to cause, maybe, my eye was caught by a story in the Financial Times today about Ryanair. It is proposing to take over Aer Lingus, but such is the size of the deal that it needs regulatory approval from the competition authorities.

In former times, a deal on this scale would have needed clearance from the European Commission in Brussels. However, recent moves to decentralise decision-making see more decisions taken at national level, with a higher threshold before a takeover becomes of European interest. (So much for the criticism that Europe relentlessly centralises everything, by the way.)

Ryanair now are caught. In Irish terms, a merger between themselves and Aer Lingus might have considerable impact on consumer choice and competition; in European terms, it would have rather less. So Ryanair are desperate to have this deal seen as big enough to deserve European-level attention. The European Commission looks like the solution to a problem.

Of course, this is the same European Commission that was denounced by the same Ryanair as when it ruled against illegal subsidies received in connection with services from Charleroi airport. Michael O’Leary, Ryanair chief executive, dismissed it at the time as an “evil empire”. Perhaps he is rethinking that criticism now.

Such criticism of the Commission is doubly ironic because, of all the companies in Europe that have benefited from its activities, Ryanair is probably top of the list. It has grown as an international airline because the EU prohibits state regulation of routes and prices: this is a matter for competition these days. I can remember when national governments negotiated fares and schedules on behalf of national carriers: not any more.

Outside the EU, the old rules often still apply. There was a case recently when Alitalia objected that it was cheaper to fly from Rome to New York via London with British Airways than it was to fly direct on their own services. Because of the peculiar rules of international air transport, Alitalia had a case. This is what the single market has swept away. It is always astonishing that anyone should want those days back.

Posted by Richard Laming at 13:57 0 comments

 
 
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