European governments and the EU Commission have spent most of the past month condemning President Donald Trump for his steel and aluminium tariffs, targeted against – among others – European exporters.
The president of the European Commission, Jean-Claude Juncker stated: “I am concerned by this decision. The EU believes these unilateral US tariffs are unjustified and at odds with World Trade Organisation rules. This is protectionism, pure and simple.”
His comments were echoed by EU trade commissioner Cecilia Malmstrom, who declared that: “The EU’s response will be proportionate and in accordance with WTO rules. We will now trigger a dispute settlement case at the WTO.”
French President Emmanuel Macron called the US tariffs “illegal and a mistake”, while the UK’s international trade secretary, Liam Fox, confirmed that they were “patently absurd”.
The EU will now challenge the US action in front of the WTO and take retaliatory measures. The bloc is determined to present itself as the defender of the global trading system.
Perhaps this position would have more credibility if the EU were not a consistent and egregious violator of trade rules when it suits its members’ protectionist interests.
In the next few weeks, the EU will vote on a proposed ban of palm oil, a biofuel which none of its member states are able to produce, as they all lack a tropical climate. EU countries do grow a lot of competitor crops, however, including rapeseed, sunflower, and sugar beet. By some strange coincidence, palm oil alone is being singled out for a ban on supposed “environmental grounds”.
This would be a credible argument if it weren’t for the fact that palm oil entering the EU passes every environmental hoop which European bodies can dream up for it.
The EU’s hypocrisy on trade has not gone unnoticed by the south-east Asian countries where most of the palm oil is produced. Just as the EU prepared its retaliation to Trump’s aggression over steel tariffs, so Asian governments are preparing their own retaliation to the EU’s aggression over palm oil.
Reports suggest that this retaliation could include the loss of up to £7bn of defence and aerospace contracts for British exporters. Other European countries will not be spared – Germany alone exports more than €12bn annually to south-east Asian countries.
It may be true that, in relation to steel and aluminium, the EU has been wronged. It is also true to say that Trump’s mercantilist attitude towards trade is harmful and illogical: no free-trader would quarrel with the EU leaders’ criticisms of the US President.
However, for the EU to then present itself as the paragon of virtue, and the standard-bearer for the international trading system, is a giant and unjustified leap. The EU cannot credibly claim to be defending global free trade while at the same time flagrantly bullying smaller countries in Africa and Asia into accepting its protectionist tariffs and regulations.
That Juncker does not resort to late-night tweets to announce his protectionist policies may make him more dignified – but it does not give him the moral or political high-ground over Trump.
With a brand new trade policy on the horizon, there is much for the UK to learn. Domestic special interests and anti-trade lobbyists will attempt to derail trade progress. The illogical debate about chlorine chicken already hovers over UK-US trade discussions, just as palm oil hovers over the potential discussions with south-east Asia.
If we truly want “Global Britain” to be a leader in promoting global trade, we must resist the impulse to give in to every environmental, social, or special-interest lobbying campaign. In others words, we must avoid the mistakes that, even today, bedevil the EU’s trade policymaking.