A New Era of Big-to-Big Free Trade AgreementsThis year has seen two new initiatives to negotiate to free trade agreements between big economies – between the EU and the US, and the EU and Japan. Modelled on the recommendations from ECIPE’s Transatlantic Task Force on Trade, the transatlantic initiative should aim to craft a deep and comprehensive trade agreement that could spearhead new international liberalisation, Fredrik Erixon has argued. In a new study, Patrick Messerlin says an EU-Japan trade agreement is important for Europe, especially as it may be negatively affected by other big trade initiatives involving Japan. Hosuk Lee-Makiyama has argued that Europe needs an FTA with Japan in order to maintain its market shares.
What Does the WTO Need From its Next Director General?In a new online discussion about the race for next Director General of WTO Patrick Messerlin argues that the role of "middle powers" in the WTO should become more distinct as they typically represent forward-looking views on multilateral trade liberalisation. For the WTO to recover its role as a "bazaar" for trade negotiations, Ambassadors should play a more significant role in the negotiations, says Messerlin. In the same Forum, Fredrik Erixon argues that reviving the mechanics of effective mercantilism is necessary for WTO to deliver results. Focusing on how the current situation is, rather than how it ought to be, Erixon argues that while the WTO is in a bad shape, it is not about to be extinct, and it can come back if it figures out how to construct negotiation agendas that reflect today's economic relations in the world.
French and German perspectives on transatlantic trade relationsSignificant economic opportunities and political challenges lie ahead for France and Germany as the EU and the U.S. are likely to enter into negotiations on a Transatlantic Trade and Investment Partnership, writes Lisa Brandt in a chapter in Transatlantic Relations in a multipolar world (Genshagen Papier). Both France and Germany have close ties to the U.S. economy, illustrated by intense intra-industry and intra-firm trade. Traditionally strong in manufacturing of knowledge-intensive products, they both face increasing competition from emerging economies. France in particular is struggling with a large trade deficit and needs to improve the competitiveness of its economy. Closer transatlantic economic integration including regulatory cooperation could notably boost the services sectors in both the French and German economies.
New Biofuels Reform Reinforces DiscriminationThe Renewable Energy Directive (RED) in 2009 ushered Europe into the world of biofuels. But the policy was driven as much by protectionist purposes as by green ambitions. In a new reform proposal, the EU will worsen discrimination in its biofuels policy by introducing so-called ILUC factors in reporting requirements. ILUC, says Fredrik Erixon in a new brief, is a flawed and impossible concept, and it increases the risk that the World Trade Organisation will rule against Europe’s biofuels policy.
Argentina – One Year After the Energy Grab
A year after Argentina’s foul confiscation if Repsol’s stake in energy firm YPF, the problems for Argentina have grown bigger, argued Fredrik Erixon in a new brief. The confiscation follows a larger pattern in Argentina’s international economic policy. Steeped in the tradition of Peronist economic populism, President Cristina Fernández de Kirchner has reinforced economic nationalism, analysed Lisa Brandt and Fredrik Erixon in a paper earlier this year. But the policy is not working. Inflation keeps rising to high levels and the post-crisis recover has petered out. And the fate of the country’s energy sector has just worsened, says Fredrik Erixon in a blog post. Few investors are willing to take the political risks of investing in a country and company that has been grabbed by the state.
Healthcare Expenditure Reforms and ObesityIn a new think piece on healthcare expenditure reforms, Lisa Brandt and Fredrik Erixon discuss how significant healthcare expenditures in the future could be “saved” if appropriate measures are taken now. Whereas governments in Europe are increasingly concerned about growing healthcare expenditures, it is critical that they look beyond the costs covered by the annual budgets. As presented at a recent ECIPE workshop the prevalence of obesity in Europe grows at the same time as the population is ageing. The cost effects on healthcare systems are thus very strong.