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Europe’s left learns to love free trade

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The trade tides are turning in the European Parliament, and that’s down to the Socialists and Democrats.

In February Russia invaded Ukraine, and that has prompted the center left to consider moving away from years of official policy that prioritized sustainability over free trade.

The S&D’s shift could ensure an easy pathway for trade agreements through the European Parliament, a crucial hurdle to new European deals. 

“Of course, it would be really very strange if such an extraordinary event like a war on European soil of that magnitude would not affect any European policy,” said Belgian S&D MEP Kathleen Van Brempt in an interview. “Our trading system is very vulnerable [with regards to] who we trade with — that’s had a huge influence on how we look at trade.”

Van Brempt was her group’s trade coordinator until May, when she was replaced by Inmaculada Rodríguez Piñero, a Spanish MEP with a special interest in Latin America, which just so happens to have a few trade deals with Europe waiting to be approved.

Both Van Brempt and Rodríguez Piñero deny that this shift in coordinators means anything when it comes to S&D’s line on trade policy. But other groups also say they’ve noticed a move by the center left towards loosening their standards on sustainability in trade deals.

Greenpeace trade expert Lis Cunha, who actively worked on pushing the green agenda in Parliament as former assistant to Green lawmaker Anna Cavazzini, is worried by the trend: “The narrative of the crisis and all the fears surrounding it are allowing some MEPs to be more vocal about more trade as a solution, when it actually is a false solution in my view,” Cunha said.

On the business-friendly right, lawmakers are welcoming the change. “I think the mood music is generally positive, in favor of getting trade deals done because we realize that dependencies can be troubling,” said Anna-Michelle Asimakopoulou from the center-right European People’s Party, referring to the trade committee.

In a break with her predecessor, Rodríguez Piñero is intent on scoring more trade deals for the sake of diversifying supply sources.

“In [the Parliament’s trade committee], there’s convergence between all of the political groups around the urgent need to have deeper trade and economic relations with reliable partners,” Rodríguez Piñero said, adding that “we need to conclude trade deals with Latin America, and of course with the Indo-Pacific region and with Africa.”

Mercosur test case

The deal with the Mercosur region of Brazil, Argentina, Uruguay and Paraguay will be the real test case for whether the S&D has changed its mind about trade since the war broke out.

Brussels and Mercosur politically sealed the pact back in 2019, but the deal proved unpopular with the European Parliament, which has held it up, citing environmental reasons — particularly the damage the agreement could do to the Amazon rainforest.

But a change in the group’s focus — plus the hope of a new, friendlier president in Brazil — could lead to a breakthrough.

“Since February 24, the geopolitical situation has changed, and we should definitely draw the consequences for our trade policy,” said German Social Democrat MP Bernd Westphal in an interview. “We have been negotiating with the countries for 20 years now, which is why I believe that the countries in South America can expect that we are wrapping things up.”

But not everyone agrees, including Van Brempt, who initially took on the trade job to raise environmental standards in trade deals. She said expediting the Mercosur agreement “would be unacceptable for an awful lot of S&D people, and other political groups as well.”

“We absolutely cannot make the same mistake all over again that in times of crisis, we put other big challenges aside. Let’s not [ignore] the climate crisis,” she said.

But Rodríguez Piñero said she wants to sign the deal on Mercosur “as soon as the conditions are united for us to be able to support it.” She added that Mercosur “is an extremely important region for the EU, and especially for us to diversify our supply chains.”

The S&D, like all European policymakers, is contending with what they see as Europe’s overdependence on authoritarian countries like China and Russia.

The EU’s trade chief Valdis Dombrovskis, whose department had been frustrated by the lack of process on free trade deals, said the EU needs to diversify its trade flows to reduce that dependency.

This year, Europe is accelerating its free-trade agenda, signing a deal with New Zealand and hoping to finalize other agreements with Chile, Mexico and Australia in the coming months. The Netherlands ratified the EU-Canada deal in July after the Dutch social-democrats changed their position, again citing the geopolitical context. The Germans are getting ready to sign on to the pact with Canada too.

Critics fear the moves could signal a step back for sustainability, especially since the pacts could spur further environmental degradation in partner countries. 

“[The war in] Ukraine gives of course heightened political momentum to speed [trade deals] up, to go quicker, to not necessarily be so strict on sustainability,” said Ben Vanpeperstraete, a trade expert who works with NGOs.

So while environmentalists bristle, free-traders appear to rejoice. “I don’t think the Parliament is going to be the hold-up,” center-right MEP Asimakopoulou said.

Leonie Kijewski contributed reporting.

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