The agreement between Donald Trump and Jean-Claude Juncker in Washington DC to set aside recent trade irritants and think about a more open trading relationship in the years ahead is welcome. It should remind us that the EU economy — as a result of EU policy and the common external tariff — is not as open as it should be for an advanced economy.
The problem is not just high tariff barriers, but also a distorted and defective approach to science and risk evaluation that is used to create complex barriers to both trade and technical innovation. It makes innovation expensive and slower while preventing consumers buying cheap safe products.
High tariffs are central to the EU’s farm policy, but over the last thirty years the EU has developed a new form of agricultural protection based on regulations put in place ostensibly for reasons of health, but which in practice protect expensive methods of production.
These regulations have been a source of contention between the US government and the EU for many years. The EU’s general approach to science and innovation is characterised by an unwillingness to adjust to change and exploit the opportunities that evolving technologies offer. It is exemplified by the precautionary principle that the EU has developed since the mid-1990s and which is embedded in directives and policy regulating the environment, chemicals and biotechnology.
When technologies such as GM foods are not banned outright, the EU approach to scientific evaluation leads to awkward and expensive regulation that is disproportionate and a source of bogus trade protection. This charge is set out in the 2018 National Trade Estimate Report on Foreign Trade Barriers published by the Office of the United States Trade Representative.
The report states that the EU’s measures “unnecessarily restrict trade without furthering their safety objectives because they are not based on scientific principles, maintained with sufficient scientific evidence, or applied only to the extent necessary . . . If the EU recognized the equivalence of US measures, trade could be facilitated considerably.”
President Trump and Mr Juncker’s agreement was welcome, but the difficulty of making any progress on these matters was illustrated by an ECJ decision later that week. In a long-running case the ECJ decided to extend the regime that regulates GM technology to gene editing. Sonny Perdue, the US secretary of agriculture, criticised the decision, saying that “government policies should encourage scientific innovation without creating unnecessary barriers or unjustifiably stigmatising new technologies. Unfortunately, this week’s ECJ ruling narrowly considers newer genome editing methods to be within the scope of the European Union’s regressive and outdated regulations governing genetically modified organisms”.
The decision illustrates the gulf in trade standards between the EU and the US that existed under the Clinton, Bush and Obama administrations and now continues under the Trump administration. This is typified by the EU’s refusal to follow contemporary international scientific opinion, and the difficulties the EU has in employing evolving technology effectively and adjusting to change.
The UK government’s latest Brexit white paper position is that it will continue to abide by the present EU framework of agricultural and scientific regulation and will continue to be a member of EU agencies such as its chemicals agency that have helped to create these “a scientific” barriers to trade. The government should be aware that this may scupper the trade deals that they hope for.
To read Warwick Lightfoot’s piece for The Times in full, click here.