Analysis and Publications

EU Commissioner for Trade Cecilia Malmström says task at hand is ‘quite urgent’

A multilateral effort needs to be made to save the World Trade Organization (WTO), the European Union’s Commissioner for Trade Cecilia Malmström said at the Atlantic Council in Washington on January 10, noting that the twenty-four-year-old intergovernmental body to regulate international trade is “under increasing pressure.”

“So we need to save it,” Malmström said, warning “it is quite urgent.”

Transatlantic trade negotiators are kicking off 2019 with positive momentum toward avoiding a trade war and implementing last year’s joint statement between the White House and the European Commission. On January 7, the European Commission made key announcements on agricultural trade and steel tariffs that set the stage for ministerial-level talks held in Washington on January 8.

US President Donald J. Trump has cast doubt on the possibility of completing a US-UK free trade agreement under the terms of the Brexit deal British Prime Minister Theresa May has negotiated with the European Union.

“I think we have to take a look at, seriously, whether or not the UK is allowed to trade, because, you know, right now, if you look at the deal, they [the UK] may not be able to trade with us,” Trump told reporters on November 26.

May rejected Trump’s characterization, saying: “We will have the ability, outside the European Union, to make those decisions on trade policy for ourselves. It will no longer be a decision being taken by Brussels.”

Brexit supporters had touted the ability to conduct an independent trade policy with non-EU countries as one of the main advantages of the UK leaving the EU.
At an extraordinary summit on November 25, European Union leaders approved a draft agreement with British Prime Minister Theresa May setting out the terms of the United Kingdom’s withdrawal from the EU.

It is hard to understate the importance of this milestone in the Brexit process. The 585-page draft agreement comprehensively dictates the terms of the UK’s exit from the EU on a broad range of issues, from the UK’s financial obligations toward the EU, the Northern Ireland border regime, citizens’ rights, jurisdiction delimitation, and financial services regulation among others.
The European Union has reached its mid-twenties.

On its twenty-fifth birthday on November 1, however, there were no fireworks, inspiring speeches, or fancy receptions in Brussels though. Mired in internal quarrels, from Brexit to rising Euroscepticism, European leaders may feel there is not much to celebrate.
A budget proposal put forward by Italy’s populist government would create a prohibitively high deficit and has sharpened the conflict between Rome and the European Union.

Despite warnings from Brussels, the ruling Italian coalition of La Lega and the 5 Star Movement submitted its 2019 budget proposal to the European Union (EU) on October 15. A combination of tax cuts, increased social spending, and a roll back of pension reforms will cause the deficit to jump from 0.8 percent to 2.4 percent of the gross domestic product (GDP), according to the government’s calculations. The proposal, which creates a deficit that is more than triple the level desired by the EU, has left investors jittery about the trajectory of the Italian economy.
Greece’s exit from nearly a decade of bailout programs on August 20, while good news, does not mean the end of belt-tightening or of Greece’s commitments to its international creditors.
On May 25, the European Union’s (EU) sweeping new data privacy regulation came into force. The General Data Protection Regulation (GDPR) provides EU residents with more control and protection of their data.

Despite past difficulties, Ukraine’s track record of economic reforms appears to have set the country in the right direction, according to Oleksandr Danylyuk, finance minister of Ukraine.

Speaking at the Atlantic Council on April 17, Danylyuk struck an optimistic tone about the coming years in Ukraine as he addressed the economic reforms that the government in Kyiv has undertaken so far. “Despite the difficulties, the previous implementation [of economic reform] shows we can achieve,” he said. According to Danylyuk, that the slew of reforms carried out in the past three years had and will continue to change Ukraine by nourishing the hopes of the Ukrainian people.

The Ukrainian economy is expected to grow at 3.2 percent this year, and into 2019, according to the International Monetary Fund’s just-released World Economic Outlook. However, Ukraine will face a presidential election in 2019, creating both volatility and uncertainty which could cloud prospects for further economic growth.


    

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