Mandelson wants Europe to flex its trade muscles

The EU must pursue an aggressive agenda to open foreign markets to its goods and services even if the current round of world trade liberalisation talks is successful, according to a paper drawn up by the directorate-general of Peter Mandelson, the European commissioner for trade.

Despite fears about the growing economic power of China and India, the EU is "at the forefront of international competitiveness", the Commission paper claims, but maintaining that position will need a "dynamic approach" to push the EU's interests, rather than relying on "protectionism at home".

The EU should push for the removal of barriers to selling its goods and services in other countries, especially in key growing markets such as China, India, Korea and the South American countries of Mercosur, the paper says.

While the EU's main priority for the last five years had been getting an ambitious agreement at the World Trade Organization (WTO) on the Doha Development Round, "even an ambitious result will not address all the external competitiveness challenges we face", states the 22- page document, entitled Global Europe: competing in the world.

The paper will fuel speculation that Mandelson is preparing the ground for actions in case the round fails by pressing ahead with regional free trade deals such as those pursued by the US. The paper, which has not yet been sent to other Commission departments, sets out a list of actions to enable the EU to pursue its economic objectives and strengthen its position on global markets. These include the possibility of denying non-EU companies access to the Union's lucrative public procurement market unless foreign countries offer reciprocal access to their markets. While the EU has been prioritising the Doha negotiations, its main trading partners have been very active in negotiating free trade agreements with the Union's competitors, the paper says, citing the examples of members of the Association of Southeast Asian Nations (ASEAN) with Japan, or Korea with the US. "Even an ambitious outcome of the Doha Development Agenda will not restore a level playing-field," the paper notes.

The EU should prioritise free trade agreements with areas according to their economic potential rather than on development aims, as has happened in the past, the paper says.

The paper sets out a number of areas where the Union needs to push for its interests more aggressively. These include removing non- tariff barriers to the EU's goods and services through greater regulatory convergence. There should also be efforts to ensure that EU producers get better access to raw materials by seeking agreements from third countries that they will not impose restrictions on exports of raw materials to ensure supplies for their domestic markets.

The paper sets out a nine-point plan for specific actions that the Union should take to address its priority interests. These include further enforcement of intellectual property protection as well as a plan to review the anti-dumping system to take greater account of consumer interests.

A spokesman for Commissioner Mandelson rejected suggestions that the paper meant that the Commission was examining scenarios in case there was no deal on the Doha round. "Our overriding priority objective remains the conclusion of the Doha round," he said. But he said that the need to "move ahead" with regional free trade agreements was being considered. He stressed that any such deals would be "WTO plus" ie that they went beyond the scope of the current round negotiations.

Keith Rockwell, spokesman for the WTO, said that it was important that "primacy [for trade negotiations] rests with the WTO", adding that there had been no signs in Geneva that the EU was giving "anything less than full priority to the WTO". He warned, however, that if the round failed, efforts to obtain regional and bilateral deals would "accelerate" although many issues were best dealt with through multilateral negotiations.