The Next EU Parliamentary Elections and the Future of International Trade

“The real test of a man is not how well he plays the role he has invented for himself but how well he plays the role that destiny assigned to him.”

Jan Patočka to Václav Havel in  Disturbing The Peace

The European Union, as a project of integration, is the most sophisticated political, legal, economic and social institution ever built. From ancient times, Europe’s influence on the globe extended far beyond its borders through language, culture, and the arts. And while deeper analysis would also address the lights and shadows of Europe’s footprint in the world, it is undeniable that Europe’s greatest bequest to humanity is a political system which allows citizens to participate in the decision-making process to shape their future.

Easy to say, but the road to this ideal is paved with centuries of war and destruction. For this reason, the birth of the European Union as an institutional order must be seen as a civilisational legacy and as a peace project. But peace comes with a price. And today, the EU is undergoing a structural crisis that prevents it from achieving the desirable growth levels to finance its welfare state and, equally important, to defend its territorial integrity. Although many internal problems explain the slowdown in growth and declining competitiveness of the EU, it is equally necessary to draw attention to the external dimension.

Conventional wisdom tells us that international affairs are rarely at the forefront of voters’ minds, but few areas of international policy have as direct impact on citizens’ lives as trade policy. From the increase in real wages and the number of jobs, to the price of the most basic staples, trade policy affects the most private and intimate aspects of life. Since the Lisbon Treaty, the European Parliament has been mandated to co-legislate on trade policy. Therefore, the next European elections are a unique opportunity for millions of European citizens to shape not only the external dimension of the EU but also their own lives and the lives of future generations.

According to the Oxford philosopher William MacAskill, a proponent of long-termism, the world is in a period when the values that guide humankind are still malleable, but those values could [soon] ossify and constrain the course of civilisation.  Long-termism is based on the idea that today’s society has a moral responsibility to future people. Because decisions made today will have long-lasting effects, people are responsible for the society of tomorrow and the values and principles that will guide it.

Unfortunately, the current zeitgeist is moving in a perilous direction, questioning the value of openness and interdependence as a path to economic prosperity. Many politicians in office would –quietly– admit that it’s political suicide to speak out in favour of engaging in more trade, especially with major competitors. For the EU, this comes at an unfortunate time.  Over the last decades, the tendency has been that the EU has become more inward-looking. A paradoxical explanation for this growing insularity is the deepening of the single market. As the pursuit of further deepening integration continues, there may be less of an incentive to trade with the outside world. According to an ECIPE study, trade in goods and services between Member States in the last decade grew by 76%. By contrast, during the same period, the growth of extra-European trade grew by 56% – despite demand growth outside of Europe being so much bigger. Because firms that operate in international markets are essential elements to develop new sources of comparative advantages, this trend threatens Europe’s competitiveness in the long run.

Certainly, there have been some notable achievements in trade policy, including the EU’s agreements with New Zealand, Singapore, Central America and the modernised agreement with Chile. However, there are also significant setbacks. For instance, the collapse in the negotiations with Australia and the failure to modernise the Global Agreement with Mexico. These political blows, among other factors, illustrate the difficulty in concluding trade agreements with robust economies. Brussels often forgets that it is not the same as negotiating with North African or Balkan countries as it is to set an agenda with Canberra or New Delhi. But, undoubtedly,  one of the greatest failures of the EU’s trade policy in the century would be the absence of an agreement with Mercosur. At a time when geopolitics is a rationale for international trade, it is a complacent mistake to think that scope-limited trade instruments such as the deforestation initiative or the environmental cooperation agreement between France and Brazil can substitute for a robust and comprehensive trade agreement.

Alas, many countries in the EU continued to be seduced by quixotic ideas such as economic and technological sovereignty,  which do not necessarily translate into better living standards in practice. Of course, it would be naïve to underestimate the existential threats to Europe posed by Russia’s nuclear risk and China’s overcapacity. Or a more hawkish America, as Ed Luce recently noted.  Yet, at the same time, building fortresses and shielding from the world would be another type of doomsday.  According to some projections, several parties with this insular agenda will consolidate significant victories in the next European Parliament.

The siren songs of those seeking to erect barriers to goods, services, people and ideas lead down to an illiberal road. Unquestionably, the greatest challenge to European democracy continues to be the rise of populism and its authoritarian variant, which makes easy prey of those who vote with their guts.  A rebirth of tribalism is the antithesis of a Union based on diversity and the historic achievement of an institution of peace. In Homer’s poem, Odysseus’ courage saved him from self-destruction. Perhaps the greatest form of heroism in our times is for every European citizen to vote assuming their historical responsibility.

This blog post is largely based on an article published in El Economista México on the 14th of May, 2024. The original article can be found here.