French & Dutch trade ministers urge more protectionist approach as EU negotiates Brexit deal

France and the Netherlands have joined forces to urge the European Union to enforce environmental and labour standards more forcefully with countries the bloc signs trade deals with, according to a document seen by Reuters.

The initiative, first reported by Britain's Financial Times, comes as the EU tries to negotiate a new trade deal with Britain amid concerns that it might seek to undercut EU labour and environmental standards in order to boost its competitiveness.

The involvement of the traditionally strongly pro-free trade Dutch underscores a shift in European thinking on the need to protect domestic industry and jobs.

French President Emmanuel Macron has said that broken supply chains and medical shortages experienced as a result of the COVID-19 pandemic have reinforced his argument for a “sovereign” Europe that blocks access to its market for those unwilling to follow its rules. Attracting foreign investment should not mean exposing Europe to what in February 2017 he referred to as “the disorder of globalisation”.

A more assertive China and Donald Trump’s protectionist America-First agenda have also helped to reshape European attitudes towards free trade.

In their joint proposal sent to the other 25 EU member states, trade ministers Sigrid Kaag and Jean-Baptiste Lemoyne urged the European Commission to be ready to raise tariffs against trade partners that fail to meet their commitments on sustainable development.

“Trade policy instruments can provide additional leverage to the implementation of international environmental and labour standards,” the document said.

The EU should link tariff reductions “where relevant” to the effective implementation of trade and sustainable development provisions and be willing to take action when those provisions are breached, it added.

The European Commission, which handles trade policy on behalf of EU member states, has yet to give a formal response to the joint proposals, which the French and Dutch want applied to deals under negotiation and to updates of existing trade pacts.

The document urges the Commission to inform member states more regularly on the impact that trade deals have on European jobs and domestic industries.

It also says a commitment to the Paris Agreement on climate change must be a pre-requisite for any trade pact. Trump has decided to ditch the climate pact, a fact that would, in theory, preclude any future trade deal with the United States.

France has long favoured a more protectionist stance on trade. “Countries for which this agenda was seen as very French a few months ago are now shifting,” a French diplomatic source told Reuters, “There’s a sort of wake-up call in Europe.”

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