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News & Insights on Europe

News and Views on Europe – 12 Oct 2018

posted by eucentresg

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EU to step up human rights protection and achieve development goals with partners through “decentralized” cooperation
The EU is ramping up trade pressure on Cambodia and Myanmar for their human rights violations. EU commissioner, Cecilia Maelstrom, announced on Friday (5 October) that Cambodia and Myanmar risk losing special access to the EU market by being withdrawn from the tariff-free trade agreement called, Everything But Arms (EBA), which applies to all exports except ammunition. With respect to Myanmar, they are launching an “emergency, high-level EU mission” to assess the situation regarding the Rohingya refugee crisis. This could lead to the withdrawal of Myanmar from the EBA.

As for Cambodia, Maelstrom said the EU is “a step further in the process”. Accusing Cambodia of taking the country backwards with sham elections, EU’s High Representative Federica Mogherini and Maelstrom had already notified Cambodia that the EU will be launching the process of Cambodia’s withdrawal from the EBA. Cambodia could face tariffs on garments, sugar and other exports within 12 months of the current reviewing process. In the face of these threats, Cambodian prime minister Hun Sen has remained defiant, and told students that Cambodia must defend its sovereignty.

The pressure against Cambodia and Myanmar seems to point towards the EU stepping up in protecting human rights worldwide. The Netherlands recently brought forward a proposal to enforce sanctions on violators of human rights. This new proposal will target individuals by issuing EU visa bans and freezing of assets. The proposal will be up for discussion at the Hague on November 20.

On the development front, the EU is looking for decentralised cooperation with countries in Asia, Africa, and Latin America as part of their sustainable development goals. This approach to cooperation defends the EU’s commitment to developing nations but also places importance on local actors to play a larger role. EU Commissioner Neven Mimica stated in an interview that “education, health, food security or the eradication of poverty– just to name a few – will continue to be at the forefront of our partnership with developing countries”. He also stressed the need for broad partnerships to go beyond government to government cooperation and include local actors. This is because in government cooperation may be difficult in “fragile countries”.

The interview also reports that the Commission has proposed an endowment of €89.5 billion for the instrument on Neighbourhood, Development and International Cooperation in the 2021-2027 Multiannual Financial Framework, which would, in the case of Sub-Saharan Africa, increase the budget by 23%. However, the budget, which is deemed an “ambitious proposal” will ultimately be decided by the European Parliament and the Council.

Despite this proposal and increased budget for more decentralized cooperation in development, Gabon’s President, Ali Bongo Ondimba, said: “Europe has turned its back on Africa”. Referencing President Jean-Claude Juncker’s State of the Union speech, in which he affirmed a partnership of equals between Africa and the EU, Odimba said that EU is making too many demands on aid and investment in Africa. With the perception that increased Chinese investment in Africa will give the latter far more leverage, he added that between China and the West, we hope to get some fairness. Chinese President Xi Jinping has recently offered $60 billion in additional aid, loans and investment to Africa, which has caused the EU to worry that China will overtake Europe in becoming Africa’s biggest partner.

 

US withdraws from more international accords and rejects EU’s proposed WTO reforms
On 3rd October last week, the Trump administration withdrew from another two international agreements: the 1955 Treaty of Amity between the United States and Iran, and the “optional protocol” under the 1961 Vienna Convention of Diplomatic Relations.

The US has earlier on withdrew from the Iran nuclear deal and re-imposed sanctions on Iran, leading Tehran to appeal to the International Court of Justice (ICJ) that these sanctions violated the terms of the 1955 Treaty of Amity between the two states. On Wednesday last week, the ICJ ruled in favour of Tehran, ordering the US to lift sanctions related to humanitarian aid and civil aviation. In response to the Court’s ruling, Washington retreated from the Treaty of Amity, as US national security adviser John Bolton accused the ICJ of being “politicized and ineffective”. He also further asserted that the US would reevaluate all international agreements that might expose it to binding ICJ decisions.

The Trump administration also took the opportunity to withdraw from the “optional protocol” under the 1961 Vienna Convention of Diplomatic Relations, which means that the US will no longer have to attend the ICJ in the case of disputes. This withdrawal follows Palestine’s complaint to the ICJ in September, which challenged Washington’s decision to shift its embassy from Tel Aviv to Jerusalem. This was a decision that the EU had also expressed serious concern about, with French President Macron branding the stance as “regrettable”, and German Chancellor Merkel going on record to say that she does not support Trump’s reversal of decades of US policy.

The two withdrawals are the latest among a series of US withdrawals from international institutions. This spells uncertainty and concern for US allies, particularly the EU. With Trump’s waffling commitment to multilateralism, the EU might have to reconceptualise its strategy in engaging the US.

At the same time, Trump has also rejected the EU’s WTO reforms. On 4th October last week, US Ambassador Dennis Shea announced that the US could not accept EU ideas for reforming the WTO’s Appellate Body. The EU had suggested reforms such as giving judges longer, single terms and increasing funding for the secretariat. However, Shea said that these reforms would reduce the accountability of the Appellate Body. EU Ambassador Marc Vanheukelen countered Shea’s view by expressing the impossibility of the WTO to cope without more resources, calling the US unrealistic.

Nonetheless, there are some areas on which the EU and the US are collaborating, including standards for notification of trade policies and on rules about which countries get special treatment as “developing countries”.

 

Brexit divorce deal is more likely but formidable challenges remain
Following the acrimonious Salzburg Summit last month, the prevailing view was that the UK might leave the EU without a deal and both sides have been intensifying efforts to prepare for a no-deal scenario. However, in a sharp turn of events, the EU briefed national diplomats in Brussels last week that a divorce deal was “very close”. European Council President Donald Tusk confirmed over the weekend that a deal ensuring limited losses on both sides is doable in 2018 and the EU is offering the UK a “Canada+++” deal. The three “+” refer to close cooperation and coordination on “trade”, “internal security” and “foreign policy”, respectively. To be more specific about the timetable, European Commission President Jean-Claude Juncker said if a deal can’t be reached by October, “we’ll do it in November”. Michel Barnier is also “de-dramatising” the talks and trying to ease tensions with Britain. On Tuesday (9 Oct), Barnier said in an industry and business conference that “the EU is committed to respecting the territorial integrity and constitutional order of the UK” when handling the separation.

Despite the more optimistic and less contentious tone, a few biggest challenges remain. First and foremost, finding an Irish border solution that is acceptable to Brussels, London and Northern Ireland’s Democratic Unionist Party (DUP), which props up Ms May’s parliamentary majority, is still a formidable challenge. DUP leader Arlene Foster stressed early this week that her party will not support any Brexit agreement that “gives rise” to customs or regulatory barriers on trade, in either direction, between the country and the rest of the UK. More generally, the party believes that Northern Ireland cannot be “treated differently” to the UK in any way after Brexit. Second, the UK is likely to remain in a customs union with the EU for some time. But Brexiteers will not tolerate a de facto customs union for long, if at all, because it would restrict the UK’s room for manoeuvre when striking free-trade deals with non-EU countries (see below). The third challenge relates to future relations between the EU and the UK. Ms May’s Chequers plan was disliked by both the EU and Brexiteers. The EU accuses the UK for cherry-picking and undermining the integrity of the single market whereas Brexiteers hate the plan because it keeps the UK too close to the EU. The Labour Party does not like it either as the Chequers does not include a permanent customs union with the EU.

As Brexit nears, the UK is stepping up its defence diplomacy. It signed a military cooperation agreement with Germany last Friday (5 Oct), showcasing London’s continued security commitment to the EU despite Brexit. The UK was also warmly welcomed by the Japanese Prime Minister Shinzo Abe to join the revamped (Comprehensive and Progressive Agreement for) Trans-Pacific Partnership, or (CP)TPP. Abe’s announcement offered new potential free-trade opportunities for Britain outside the EU, as the CPTPP is a wide-ranging agreement between 11 nations including, Japan, Vietnam, Malaysia, Canada, Mexico and Australia. However, joining the (CP)TPP would only be possible if Britain were to leave the EU’s with considerable regulatory autonomy.

While the EU could join the CPTPP to offset some of its losses, the fact that the UK is leaving the EU would take a toll on both sides. The International Monetary Fund (IMF) warned on Tuesday (9 Oct) that it cut the forecast for eurozone growth because of Brexit (and persistently low productivity). For IMF, “the rise in trade barriers between the United Kingdom and the European Union would imply sizable losses for the UK economy and, to a lesser extent, for its trading partners, with negative impacts concentrated in countries with the largest trade links with the UK”.

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