Globalization Needs Rules…

… says Sigmar Gabriel in his exclusive article for JVG. In Gabriel’s view, the Canadian-European comprehensive trade agreement “emphasizes the particular importance of decent work and social partnership.” As well as “setting high standards in environmental protection”, CETA is proof that negotiations, however difficult, to ensure fair trade policy are worthwhile.

Bundeswirtschaftsminister Sigmar Gabriel, Herbst 2015 (c) BMWi Maurice Weiss

Sigmar Gabriel, Herbst 2015 (c) BMWi Maurice Weiss

Looking at European history, we learn that economic cooperation not only ensures employment and prosperity, but also helps our governments to cooperate and enables us to better live together in peace. The European Union, the biggest peace project of our time, started out as what was cautious cooperation on coal and steel. What we have today is an economic union that, even though it is having a tough time, still continues to function. This is because it is based on common rules, rules which the Member States have agreed on in order to prevent a race-to-the-bottom on standards, and to ensure that we have fair competition. In areas where common rules have not yet been established, e.g. corporate taxation, we are working hard to change things and to stop countries from undercutting each other.
There are no rules like this in the global economy. Globalization has produced a lot of winners, not least in the developing countries, but it has also allowed a race to offer the lowest standards.
This darker side of globalization is forming the ideal breeding ground for the new apologists of isolationism – proponents that have multiplied in number and can now be found in alarmingly high concentrations in key partner countries. In the United Kingdom, advocates of Brexit promised the closing of national borders and decried a loss of sovereign power. The American presidential candidate Donald Trump has declared himself against trade agreements, has said he wants to build walls, and that he would also raise tariffs.
The British magazine The Economist aptly speaks of a new political division that is opening up – a divide not between right and left, but between being open and not. The different ideas that make up this new ideology of isolationism might each be different. But what they all have in common is that they whip up a fear of engaging with other countries, whether it’s economic or cultural exchange, or the movement of people from one country to another.
When it comes to the biggest questions of our time, nationalism is not the answer. After all, barriers to trade do not reduce social inequality. No wall, however high, can eliminate the causes of mass migration. If we want to preserve cultural and economic openness, what we need are fair rules.
For us Europeans, this also means setting about achieving ambitious trade agreements that lay down high standards of protection for workers, consumers, and for the environment. And it means adopting an approach based on partnership as we do so; one that not only focuses on sales markets, but that also encourages opportunities for development. When it comes to our current system of trade agreements, what this means is a veritable paradigm shift, since the vast majority of agreements merely aim to open up markets; they are seldom based on a partnership of equals.
What country would lend itself as a better partner for this new type of agreement than Canada? Canada is a country that shares many of our European values. Its environmental and social standards are among the highest in the world. Its public health and education system is a strong model. Canada is committed to mitigating climate change, regulates its financial markets, and is one of the co-initiators of the UNESCO Convention on the Protection of Cultural Diversity. At the same time, it also has a strong global voice as a member of the G7.
With Canada as our partner, we have succeeded in concluding an ambitious agreement that meets our aspirations and follows the goal of organizing globalization in a new way, with new rules. CETA emphasizes the particular importance of decent work and of social partnership. It sets high standards in environmental protection. Crucially, it replaces private arbitration tribunals with an investment court that is based on the rule of law and that prevents the bringing of abusive actions against democratic decisions. The provision of public services is protected from this. It remains possible to bring these back under the aegis of municipalities.
With CETA on the table, what we have is a comprehensive free trade agreement that must now be debated by the various parliaments. CETA is proof that negotiations can be worthwhile. Worthwhile for ensuring fair trade policy, for bringing about a paradigm shift in globalization, and able to live up to the political desire to shape the 21st century.

Photo Credit: BMWi Maurice Weiss

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