Summary of the conference

Johan Norberg, a Fellow of ECIPE, made the first presentation and set the stage for a broad discussion on the role of trade in the modern world. In particular Norberg discussed technological change and its implications for trade, globalisation and development. Technological change has greatly facilitated trade and reduced poverty, and will do so even more in the future, when more products will be subjected to “virtual reality” solutions, and more people will be tapped into the system of global specialization and economic integration.

View Johan Norberg's presentation

Lord Meghnad Desai, Professor at the London School of Economics, explained that a big obstacle to further globalisation is the fear of those who have to bear the burden of the creative destruction, in particular people in the Western world who will become unemployed when other countries in primarily Asia increase their part in world trade. Therefore it has become important that politicians learn to explain the advantages of free trade and discuss how to compensate those who lose on the bargain of further liberalisation. Lord Desai also discussed the future of external liberalisation, especially in the context of the WTO. He was pessimistic in the short term but cautiously optimistic in the medium-to-long term perspective.

Ambassador Alejandro Jara, Deputy Director General of the World Trade Organisation, talked about the suspended negotiations in the Doha round and formed the opinion that only moderate expectations from future WTO negotiations could be expected. For the moment many governments are weak; we must be patient and realize that small steps forward, like binding already applied tariff rates at the multilateral level, should actually be considered as great steps forward.

Marcus Wallenberg, Chairman of the International Chamber of Commerce, explained that the business community prefers multilateral to bilateral trade liberalization. It is not uncommon for a medium-size company to produce some hundreds of different versions of a specific product, which requires hundreds of components from hundreds of suppliers in dozens of countries. This encourages business executives to support multilateral negotiations, since bilateral trade deal increases do not give the same benefits and run the risk of making trade too bureaucratic.

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Patrick Messerlin, Professor of Economics at Sciences Po and Chairman of ECIPE’s Steering Committee and Advisory Board, discussed whether or not the European Union should engage in bilateral trade liberalization. Even though the cost of bilateral negotiations is declining due to lower unbound MFN tariffs, the overall benefit is small. Roughly 10 percent of the decline in average tariffs in developing countries during the last two decades come from RTAs, whereas some 25 percent are the result of the Uruguay Round, and about 66 percent comes from unilateral liberalization. Therefore the EU should concentrate on multilateral negotiating in the WTO.

View Patrick Messerlin's presentation

The first panel discussed various issues and contexts in European trade reform. Brian Hindley criticized the use (or abuse) of anti-dumping measures and argued for a reform of current policy. Piere Sauvé talked about liberalization of services in the “post-Doha” landscape, in particular the idea of a US-EU FTA, and the extent to which a reform of services could be achieved in various contexts. Roderick Abbott discussed EU trade policy in a multilateral and historical context. Andreas Freytag reviewed single market policy and argued for a better understanding of the links between internal and external reforms.

The second panel discussed European trade relations with other regions. Peter Draper talked about the current EPA negotiations and concerned himself about their future. Ignacio Garcia Bercero presented the structure of a future FTA policy for Europe and the criteria against which future FTAs should be judged. Razeen Sally discussed FTA policy in Asia and argued in favour of a cautious approach to FTAs with Asian countries since they run the risk of being weak and partial.