Big Business Moves in with Commission

Challenging the intimate relationship between BusinessEurope and DG Trade

The partnership which has developed between DG Trade and BusinessEurope in co-drafting Global Europe was on show on 28th October, when BusinessEurope held its “Going Global: the Way Forward” conference in the Charlemagne building, the headquarters of DG Trade. Three floors of the building in the heart of the EU quarter in Brussels were flooded with representatives from the largest corporations who mingled with Commissioners and other participants. Several of the event sponsors – ArcelorMittal, BASF, Caterpillar, Hydro, IBM, RioTinto, Solvay, BHP Billiton and ExxonMobil – had decorated DG Trade with panels exhibiting their supposed social and environmental credentials. Outside, the unholy alliance between BusinessEurope and DG Trade was challenged by campaigners from the Seattle to Brussels Network with a mock wedding celebration with the Commission as the radiant bride in the arms of BusinessEurope, her satisfied groom.

Inside the Charlemagne building, the scene was perhaps more typical of an established couple celebrating their offspring’s graduation. Both Business Europe and DG Trade presented their assessments of Global Europe at the conference, two separate documents with a common theme: Global Europe is positive and should remain the way forward.

But this united harmony had been disturbed just days before. Swedish MEP Jens Holm had written an open letter to Baroness Ashton, the new Trade Commissioner, urging her not to host the conference. Corporate Europe Observatory published research exposing the close working relationship between the two groups (Global Europe: an open door policy for big business lobbyists at DG Trade, CEO, October 2008) and wrote an open letter to Commission President Barroso urging him to end big business’ privileged access and influence over EU trade policy. And as well as the wedding stunt outside, an advertisement in European Voice, sponsored by a number of groups, denounced the conference and the corporate capture of trade policy. And as the European Voice was one of the media partners for the conference, hundreds of copies were distributed to participants.

DG Trade goes on the defensive

DG Trade had prepared a response. Their internal “news flash” service on Monday 27th October – published internally for staff – featured “CEO protests Going Global conference: media notes”. According to it, the conference “had attracted the attention of Corporate Europe Observatory (CEO), a Dutch NGO, and other European NGOs.” It warned that there was going to be an action outside the conference and that the story was in the UK media, and instructed staff to take a media line that: Industry is one of the natural stakeholders in Europe on trade related issues, but not the only one, “In particular, DG Trade actively engages in consultations with all stakeholders through the Civil Society Dialogue, an established exchange mechanism and a pillar of EU trade policy making for the last decade.”

But the Civil Society Dialogue (CSD) has never been a policy making forum. It was initiated by former Trade Commissioner Pascal Lamy as an attempt to divert criticism that EU trade policy was being dictated by corporate interests at the time of the Seattle WTO summit in 1999. It brings together DG Trade and civil society (defined by the Commission as trade unions, business and NGOs). But after almost 10 years of existence it has became clear that its scope is very limited. Participating NGOs have repeatedly complained that it is just not possible to have any impact on policy making via the civil society meeting. DG Trade has used it to gather intelligence on the various civil society groups active on trade and as in the present case, as a handy ace for public relations. Moreover, the dissenting voices were not protesting about business being a stakeholder, but about large European corporations, via BusinessEurope, being granted privileged access and an undue influence on EU trade policy making.

DG Trade also tried to shake off accusations that the Global Europe Strategy only benefits big business while hurting the poor and the environment claiming that “Global Europe is only half of European trade policy – it sits alongside and complements the vital work that the Commission undertakes on questions of trade and sustainable development.” But where is the other half? DG Trade Director General David O’Sullivan, who stressed yet again DG Trade’s open doors policy for BusinessEurope at the conference, gave the example of European Partnership Agreements (EPAs) in his speech. “EPAs are not commercially driven agreements... They are not about access for industry but a tool for countries to make their way up the ladder of prosperity.”

He could not have chosen a worse example. EPAs with former European colonies in African, Caribbean and Pacific (ACP) countries are one of the most contested EU trade initiatives as the EU is forcing their governments to open up sectors such as services and investment, and enforce EU-like intellectual property rights. If agreed, the demands of the EU will severely affect the development of those countries, pushing yet more people into poverty, while benefiting the corporations involved.

Financial crisis? Get a deal at the WTO...

Four Commissioners (Commissioners Catherine Asthon (Trade), Günter Verheugen (Enterprise and Industry), Jan Figel (Education) and Louis Michel (Development) and many high-ranking Commission officials joined the conference panel sessions, sitting alongside corporate chief executives. Most enthusiastically echoed the main messages: Global Europe is good, it is the way forward. And the response to the financial crisis should be to avoid protectionism, continue to strive for deregulation and to push for a deal in the currently stalled round of WTO talks.

The need for a rapid conclusion to the seven-year long Doha Round, the so-called Doha Development Agenda (DDA), was a common thread in many presentations. O´Sullivan was clear that this would be a difficult task. “It is not so easy to ask now for free trade. But we have to do so,” he said. Several speakers called for the WTO negotiations to be completed before the end of the year, or before the summer at the latest.

The push for a WTO deal did not imply reduced support for the free trade agreements (FTA) strategy launched under Global Europe. European exporters’ declining market share in emerging markets has set the alarm bells ringing, and there were demands for a rapid and ambitious conclusion to the ongoing FTAs with India, Korea and ASEAN. BusinessEurope also wants to tie up negotiations with Mercosur and the Gulf Council Cooperation, plus boost EU trade relations with China, including by enforcing and strengthening Intellectual Property Rights (IPR).

Larry Hirst, from IBM, suggested extending the WTO agenda to pluri-lateral agreements in sectoral issues. According to him, this should be the second priority after the WTO deal. The advantages would be a greater chance of success, a result that could be later used as a model for others to join and the possibility of engaging strong emerging economies, such as India or Brazil.

Other BusinessEurope recipes for external policies...

After much discussion of the recommendations put forward in BusinessEurope’s assessment of Global Europe BusinessEurope secretary general Phillipe de Buck said: “We believe that the recommendation of today´s discussions should form the core of a new focused external dimension of a post-2012 Lisbon Strategy. They should be fed into the planning mechanisms of the Commission, Council, Parliament and Member States”. The business agenda would take the EU further down the road to deregulation, with liberalisation in all sectors except those chosen by business (such as IPR), and towards general acceptance that: “what is good for EU large corporations is good for the EU as a whole”.

The corporate lobby group also gave some specific recommendations on the need to improve Market Access Partnerships (deals between industry, the Commission and Member States to remove barriers to European exports, including environmental and social legislation enacted in third countries) and the need to finalise a strategy to help European companies access raw materials without any restrictions (such as the need to feed the local population in a food crisis or protect the local environment) all over the world. The group also demanded flexible exchange rates to share with emerging countries the weakness of the dollar.

A major goal for BusinessEurope is a free trade agreement with the US. Some steps in that direction have been taken under the Transatlantic Economic Council (TEC). Launched in 2007, the TEC brings together officials from the US and EU administrations to work on a regulatory convergence agenda. Camouflaged beneath the technical language, lies a deregulation agenda. Monique Goyens, from BEUC, the European Consumers´ Association, warned that it posed a threat to existing consumer protection and complained that consumers were being excluded from input into the TEC agenda. The Enterprise Commissioner Verheugen said he considered the TEC’s work to be of vital importance, with the aim of an EU-US FTA by 2016.

....and on the domestic front

Demands were no less ambitious for the internal (EU) agenda. BusinessEurope called for the completion of the Single Market (which includes among other things the implementation of the Services Directive and the new Internal Market goods package; and internal market for electronic communications; boosting of large infrastructures through the Trans-European Networks (TEN) programme and the liberalisation of energy provision.)

EU climate policies were criticised repeatedly as an example of overly burdensome regulation. BusinessEurope seems determined to hijack the climate and energy package, claiming inflated costs and threatening that business would be forced to relocate.

There was also criticism of what is seen as over-regulation in the labour markets. According to BusinessEurope both the Commission and Member States should work to moderate wages and adopt far more flexible labour markets.

Innovation was also high on the agenda with calls for more funding for research and development (R&D), a new European Patent System, and innovation-friendly education – a euphemism to adapt universities and the rest of the education system to the needs of European companies.

New Commissioner Ashton – business as usual

Baroness Catherine Ashton, the newly appointed Trade Commissioner, made her first public intervention at the conference after a private lunch with the leadership of BusinessEurope. Her speech quashed hopes of a much needed U-turn in EU trade policy, echoing the demands put forward by business in the Global Europe Strategy. She argued for the urgent conclusion of the Doha Development Round and for new issues such as investment, competition, public procurement, enforcement of intellectual property rights and access to resources to be addressed. The Commission´s work on ongoing FTAs, tackling barriers to access markets, access to raw materials and focus on IPR enforcement were all praised and she promised to deliver on all areas. She also promised to address industry concerns over climate policy and made the case for the Transatlantic Economic Council and for stronger trade negotiations with the US, China and Japan.

All in all, the new trade commissioner appears to have quickly absorbed the business agenda, and if there are other aspects to the EU’s trade policy – as claimed by DG Trade – she chose to ignore them. Her performance at the BusinessEurope conference cast serious doubts over her willingness to take a different stance from her predecessor Peter Mandelson, who did so much to allow trade policy to be captured by corporate influence in the Global Europe Strategy.