Macron’s price for saving Europe: trade defense
France will push for tougher trade defense and screening of Chinese investments in return for ‘saving’ the EU from populism.
Emmanuel Macron made Europe’s spring. Now the French president wants payback.
Having seen off the populist challenge to the European Union in France’s elections, the young centrist comes to his first EU summit with a list of demands: He will ask EU leaders meeting in Brussels on Thursday and Friday for three measures to bolster trade defenses and crowd out competition from China.
It will be Macron’s attempt to deliver on his campaign promise to defend citizens against the impact of globalization, while continuing to address some of the root causes of populist nationalism not only in France, but across Europe.
“The president led a campaign that was very engaged towards Europe by insisting on the theme of a Europe that protects,” said one French official. “But Europe can only be supported and understood if it brings a certain protection which is felt as such, which is visible and concrete, to our fellow citizens.”
In his election program, Macron promised “effective” tools to control foreign investments and to punish social, fiscal and environmental dumping.
When EU leaders’ talks turn to trade on Friday morning, the French message will be: “If we want to save trade policy in Europe, it will need to be firmer, more robust,” said another senior official. “Macron will want to show other leaders what Europe can bring in terms of protection.”
The three priorities Macron will put on the Council table are: a strong push against dumping, screening of foreign investments, and reciprocity in public procurement markets. The European Council meeting needs to “affirm that Europe will mobilize anti-dumping tools when it’s necessary,” the first official said. “Europe shouldn’t allow itself to be, somehow, a victim of unfair trade competition.”
France has secured the support of political heavyweight Germany and other industrial countries in Central Europe, capitalizing on a growing sense of unity in the face of the U.K.’s impending departure and wary relations with the U.S.
However, Macron faces opposition from Northern European member countries including Sweden and Finland — as well as European Commissioner for Trade Cecilia Malmström, a Swede and a convinced free-trader who has repeatedly opposed controls that could amount to protectionism.
‘Politics at its worst’
Malmström voiced her skepticism at a POLITICO event Tuesday. “We don’t want to hurt investment,” she said, adding that there would be legal hurdles to controlling foreign investment. “We have to see what is legally possible to do.”
Christofer Fjellner, a Swedish MEP from the center-right European People’s Party who sits on the Parliament’s trade committee, said the Macron proposal was “politics at its worst.”
“The Chinese market for investment is not open for European businesses, that’s the real problem. But by adding another layer of protectionism, you won’t solve that issue,” he said. “We just had a debate on the lack of investment … putting a burden on investment sounds plain stupid.”
As the EU trade war with China intensifies around products from steel to solar panels, France wants the European Commission to increase the number of staff dedicated to anti-dumping cases.
“There are two times fewer staff dealing with trade defense in the Commission than in the United States,” the French official said. These remarks were echoed by two other officials, with one suggesting France could seek to double the number of EU probes in this area.
Macron also hopes to speed up EU investigations, all three officials said. “The Commission needs to accelerate the procedure, put in place a systematic follow up, and get equipped with human and financial means,” according to one.
One Belt One Road
The move to screen foreign investments is a thinly veiled threat to Chinese companies buying up Europe’s crown jewels.
“We feel the need to establish surveillance at EU level,” the French official said. In draft Council conclusions seen by POLITICO, EU leaders call on the Commission to “examine ways to identify and screen investments from third countries in strategic sectors, while respecting member states’ competences.”
The EU should also close its public procurement markets to countries — including China — that don’t reciprocally allow European companies to compete for public contracts, France will say.
As leaders gather to consider Macron’s requests, China’s acquisition last December of Kuka, a German robotmaker whose machines are the backbone of Germany’s car industry, could prove a definitive influence. For a long time German politicians opposed action at EU level, but they had a change of heart after China encroached on the industry of national pride.
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Tanja Alemany, spokesperson for the German economy ministry, said the EU has reached a “critical time” on foreign investment.
“China has the ‘One Belt One Road’ initiative, and you see protectionist tendencies in America. The EU needs its own answer on how we can do well in future,” she said.
Laurens Cerulus contributed reporting.