Europe’s present trade policy is facing the challenges of a wider approach to economic reform, as in order to strengthen its economy, the EU has to be more open and competitive in its external trade.
According to Peter Mandelson, former European Commissioner for Trade, Europe needs to “open markets and create new opportunities for trade and ensure European companies are able to compete fairly in those markets. This is creating opportunities for growth and for development on an unprecedented scale. But it is also putting new pressures on global resources and creating new competition for EU workers and industries. It has eroded some old certainties and aroused new fears.”
At the G20 meeting in London in April, the EU leaders emphasised their determination to avoid turning to protectionism and concluded that the EU’s single market could be one of the solutions to the global recession. But now the EU is facing new external trade challenges with one of its oldest and closest partners – Canada.
The European Parliament voted on 5 May 2009 to ban EU imports of seal products. 550 MEPs supported the ban, hoping that the move would drastically reduce the commercial seal hunts.
Canada’s East Coast seal hunt is the largest in the world. Last year Canada exported seal products worth around EUR 3.5m to the EU.
Arlene McCarthy, MEP, European Parliamentary Labour Party, supported the ban, explaining:
“The USA has had a ban for many years, Mexico has banned the trade; in Europe we already have national bans in Belgium, the Netherlands, Luxembourg and Italy; Germany and the UK are considering ways to ban the trade; bans are now in place in Russia; Hong Kong is planning a ban. This is a political issue that now has it time. After a 40 year campaign against the trade, Europe has the chance to introduce a ban in all 27 states. This year 50,000 seals have been slaughtered that Canadians hunt compared to 220,000 last year. That means that we as citizens have now the opportunity to ban this cruel trade. I know that this will be applauded by the citizens of Europe.”
European ban on Canadian seal products challenged the economic partnership between the EU and Canada.
Canadian Trade Minister Stockwell Day assured earlier that “negotiations on a free trade deal between Canada and the European Union will not be affected by the EU’s plan to ban imports of seal products”. But now Canada threatens to appeal to the WTO because of the ban.
In an official statement in March the Newfoundland and Labrador Premier Danny Williams announced he would not support the trade talks with European leaders.
“At this point, we are not willing to sign on to support the negotiation of a new and comprehensive economic agreement with the European Union,” he said. “This decision should not be confused with a lack of support for an improved trade relationship between Canada and Europe.”
The economic relationship between the EU and Canada is based on a 1976 Framework Agreement for Commercial and Economic Cooperation. For the EU, Canada is the 11th most important trade partner, with a 1.8 per cent of total EU external trade. The EU is the second most important trading partner, after the United States, with a 9.8 per cent share of Canada’s total external trade. In 2008 only, trade in goods between the EU and Canada is worth EUR 49.8bn and the total stock of investment exceeded EUR 260bn.