Unfree trade

The European Commission is flirting dangerously with protectionism

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Readers' comments



John TheO

Dear Charlemagne,

Congrats on another well written article. I find myself forced to agree with most, if not all, of your points. However, I do find that the article is incomplete. While signaling that the EU could instigate a trade war with this proposal, you fail to offer other solutions to the problem this proposal is addressing.

You write: "But a better form of reciprocity is the mutual opening of markets."

Agreed! But the question is not "Should we open markets". The question the proposals address is "How do we convince other countries to open their markets or, failing that, protect our own". If other countries are not interested in opening their markets because they are utilizing mercantilist policies instead of free trade policies, what is the EU to do to change that situation? That is the important point to address here.

Wunala Dreaming in reply to Plazidus

It is difficult not to see the politically-loaded nature of this proposal. Granted. Sarkozy has said, and done, just about everything and its opposite over the past 5 years, from flying the liberal flag to pandering to (some of) France's deep-seated reluctance to (some) free markets. The present issue clearly falls in the latter category.
However, as the article points out, there *are* glaring imbalances in the way public procurement markets are managed/regulated from one large economy or trade bloc to the next. That the EU's internal market is significantly more open for competition than that of the US (not to mention Asian countries, some of the worst offenders in this area) is reason enough for a stock-take.
Therefore, I find it quite disingenuous from the columnist to present the EU as a closing fortress of protectionism, when the Union has, demonstrably, done more for market liberalisation than most of its trade partners.
I personally believe that competition and liberalisation *generally* produce positive social and economic results through higher efficiency and increased innovation (with some nuances and exceptions that would deserve a special brief from the Economist, I reckon). But I do not see much harm in wielding both the carrot and the stick. This proposal, despite its clumsiness and naked political pandering, could be construed and/or modified to be a fairly sturdy reminder to the EU's partners that free trade is a two-way street.
I am all for multilateral trade negotiations, and am convinced that it is one of the ways to a more prosperous and innovative future. But nobody said the EU (or any other trade entity, for that matter) could not arrive at the negotiations table with an arsenal of incentives to assert its clearly liberal positions.


Looking at the EU / EZ through the prism of AngloAmerican financial (speculative market) capitalism as you always do, then it is no surprise you conclude your article with :


Why not, one should ask, when you see the current appalling state of the Uk/Us political economies, derived from its focus on financial capitalism, which you, and they obviously, seem to believe is the answer to all crisis, even though we can now see its absolute failure as a form of sustainable political economy, in spite of the trillions of dollars being thrown at it, by way of pushing on a piece of string, to stop the rot.

With one of the worlds leading economic, financial, political and socially cohesive democratic societies, of course the EU/EZ should protect itself from stuff/junk it does not need, especially from all places like China, who will always buy German machinery for its unrivelled quality, whatever happens in so called trade wars.

Of course again, real international trade is a force for good in our global political economy, where historically, the business'es of a nation state trade with there counter parties in other nation states, where both sides win, but that is not what we have now.

Now, it is all about our own US/UK and even some EU companies, outsourcing production overseas for what may I ask - apart from decimating the livlihoods of whole swathes of US/UK civil societies.

My generation were happy to pay almost twice the level of taxes on our incremental incomes, that you lot seem to constantly complain about, day after selfish day, and still we had enough left over to buy a decent home, decent material goods, with a decent job provided by our "PROTECTED" business'es etc, leaving enough left over for our governments of the day, to provide a decent level of affordable welfare benifits.

Yes, let us have real international trade, not so called free trade or unregulated financial capitalism, both of which are a cancer in our global political economy and from which we all need "Protection".


While the proposal may sound like the right whip to make an unwilling hack comply, it can easily degenerate into a Sorcerer's Apprentice ‘play’, whereby the “apprentices” (uncompetitive EU countries) enchant the “broom of protectionism” instead of doing their necessary homework (fixing fundamental flaws).

This then could quickly devolve into an uncontrollable “magic broom” in which the handlers appear as not yet fully trained. The markets will soon be awash with retaliation-protectionism, and the apprentices have to realize that they cannot stop the “broom of protectionism” anymore, because they don’t know how. All they can do in that moment is start to chorus:

“Hello 1929!”


Opening up the EU market is good for EVERYBODY. China seems to agree with that.
Opening up the Chinese market is good for EVERYBODY too, but China does not seem to completely agree with that.
Offering China the carrot (quite free access to EU's market) ALWAYS, no matter what, does not seem to be working very well to make China reciprocate (not too big a surprise, if you take more than 5 seconds to think about it).
I suppose that starting to talk about restricting a bit China's access to the EU's carrot if they don't reciprocate can help China take a bit more of interest in opening up access to their carrot with a bit more diligence, don't you think?

jean guy giraud get too big for bootz, same unelected Barnier The Thick of Savoy!!
They think protectionism and more Subsidiarinojsk for fat sheep cathlik eurofascist !!
Think he get straightway bigger Subsidiarinojsk than Bulgar !
Because he big fat cathlik lazy fascist bastard same EU !!
Come summer season we wait Kroat beaches and marinas full zombies from Rhine with Big Bang !!!
Serb Trifunovic ! Serb Jankovic ! Bugrov ! Dypstik !
Stand by make korrekt flow Subsidiarinojsk !!!

enriquecost in reply to asshah

Anyway, Europe´s trade deficit with China is large (even if not as large as America´s) so they have much more to lose than us. Tell the Chinese that closing their market is foolish and stupid. Not just to us.


It's not just about opening or closing markets. You can have a very competitive economy if you allow things like child labor, slave labor, armed robbery and so on. To compete with such 'efficient' economies one has to follow the same path. The question then becomes "Is protectionism against such practices more or less abhorrent that adopting such practices?"

jean guy giraud

The classical free trade argumentation is based on bilateral trade relations - and hardly applies to trade between a GROUP of contries such as the EU and the rest of the world.

And it does not apply in relations between the EU and third countries as it does in intra-EU trade.

In fact, current arguments for or against "EU protectionism" are more ideological than economic. As to the legality of eventual EU "protectionist" draft measures, it is safely placed under the control of the WTO. Politicians and commentators should leave it there.


Wunala Dreaming in reply to Plazidus

Hang on.

The dripping condescension. The personal attacks responding to a post that was not threatening you in the slightest. Attributing intentions to someone who had not entertained such thoughts... Seems eerily familiar... If you told me you were commenter Jean-Saul Partre using a different name, I would believe you.

Considering the tone and content of your post, you will not be surprised if I do not bother with responding to it.


Surely the point that many people have missed, in commenting on this article, that if country A opens itself to free trade and country B does not, then it's actually country B that is going to suffer long-term consequences. The risible notion that country A will suffer unless country B simultaneously opens its markets shows only the economic illiteracy of those who fail to grasp the fundamental concepts involved. Politicians, of course, are notoriously infantile and can't be trusted to grasp anything more than election funds from supporters. But surely the rest of us can do better?

asshah in reply to Canuk

That was a thing of the past when Europe had booming economies and a young working age population. Europe has neither of those advantages now. You are mistaken if you think the Chinese will continue to buy German goods if Europe were to block Chinese exports. Europe can benefit greatly from China's rise. Closing your markets is foolish and stupid.


Marie_Claude wrote March 28th, 21:20

"yeah, and? you were accusing us for the whole thing !if you aren't happy, then make your point in the EU parliament"

Thank you for helfully confirming your eurobot credentials.

You in France call that a parliament - "the EU parliament"??

The rubber-stamping eurozombie talking shop where they all say "yes" to collect their salaries?

Presided over by the euro-brownshirt Martin Schulz ??

Wunala Dreaming in reply to Plazidus

Ô Master Plazidus, please continue to enlighten us with your tolerant, respectful, friendly and penetrating insight. It is such a joy to exchange with someone who displays so much respect and patience for unworthy mortals such as us, and not the slightest bit of false politeness under which someone could, obviously mistakenly, detect a put-down or veiled contempt.

Ah, the heavens open. My heart races whenever I read your name appearing, in divine, pristine clarity, in a comments thread.

Thanks to you, my days are brighter, as your posts provide me with a sense of purpose, of direction. Do you give classes? Where could an eager follower absorb more of your unbiased and friendly teachings? You must spread your wisdom and friendly approach amongst us, lesser beings. Do you mind if I create a little temple to worship your amazing charisma once a day? I cannot believe I lived so many years without your guidance.

Thank you.

"My shoulders are broad" *tingles* Ooooh, I am sure they are, Ô celestial luminary whose earthly envelope would make a Greek god hide in shame. Gosh, you know how to arouse us, mere humans.


"It is a bizarre proposal, given that European economies would like to export their way out of trouble—taking a leaf out of Germany’s book." (Charlemagne)

Tell us please, Charlemagne - How can the EU export its way to better times if other countries CONTINUE to close markets to EU goods in ways that the EU doesn't?

Reciprocity applied to a trade-creditor nation serves as both a lever to inspire recriprocal market access and as a source of "exports" in its own right through "import substitution". Scaremongering about 1930's style tariff wars is disappointing and barely within ethical bounds - the proposal calls only for reciprocity, not tariffs across the board.

Balanced trade is what the EU is seeking, isn't it? Are you suggesting that China has some sort of "right" to permanently unbalanced trade with the rest of the world? The Chinese apologists who prowl the threads of TE do - are you in their camp?

Ter Wecsel

Barnier is in the old dirigiste French tradition: state run economies. Rather than trying to become better, the French and other protectionist countries try to spoil the well if somebody gets better or cheaper. Lord, let them go down


This is pretty much a textbook example of the prisoner's dilemma. We all know what the best situation would be from a global perspective, but it requires the cooperation of a multitude of parties that have absolutely no faith in each other whatsoever.

The US and EU have been going tit for tat at each other for years about free/fair trade. But all of the violations were small enough for the overall system to be preserved its and remained relatively open. With the addition of blatantly protectionist Asian/South American countries, it doesn't look like the current system will survive.

The open economies of the world have two options. They can either claim the moral high ground and remain open, ceding the advantage to the protectionist countries --or-- they can throw up their own walls and give the advantage to no one. There should be a third, significantly better option, but prying open China's markets doesn't look like it'll happen anytime soon...or ever.

The WTO was supposed to make sure this never happened, but it can't do that when it has closed market economies as members. If a trade was ensues, it will be a significant nail in the coffin for an organization already bordering on a UN level of irrelevance. It simply can't move fast enough.

So there's my overly pessimistic view of the world as it stands. I generally side with history and it suggests there's a trade war a'comin.


I'd like to join John TheO in thanking Charlemagne for this particularly well written piece. John TheO, you enquire: 'what is the EU to do to change that situation?'

Doesn't the writer provide some pointers in the antepenultimate paragraph?


It’s a pity that Brussels should endanger such promising sprouts.


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