Peter Mandelson's Challenge: Navigating America's Tricky Trade Terrain

Strategic Insights -

Peter Mandelson, Europe's new trade tsar, has a daunting task ahead of him. As the European Union's trade commissioner, his success will be largely determined by his ability to navigate the complex and sometimes contentious relationship with America, its biggest trading partner. The stakes are high, with the fate of the Doha round of global trade talks hanging in the balance. Mandelson must maintain the cooperative relationship built by his predecessor, Pascal Lamy, and new American trade representative Bob Zoellick, despite the volatile economic environment and tough trade challenges ahead.

Key Takeaways:

  • Mandelson's success will be determined by his ability to work with America, the EU's biggest and most fractious trading partner, and its trade representative, Bob Zoellick.
  • The Doha round of global trade talks is still pending, with poorer countries needing to cut industrial tariffs and open service sectors, and rich countries, including the EU and America, needing to free up farm trade.
  • Mandelson has declared Doha his top priority and wants to push for closer regulatory convergence and mutual recognition of standards between America and Europe.
  • He also prefers negotiation to litigation and favours early-warning systems to prevent trade spats from escalating.
  • The Airbus/Boeing dispute over subsidies will dominate the agenda, as will other contentious issues such as America's anti-dumping provision and the EU's attitude to hormones in beef and genetically modified food.

Statistics:

  • The dollar has reached new lows against the euro, with the economic environment expected to remain volatile.
  • The Doha round of global trade talks was launched in 2001, with a heavy lifting phase still to come.
  • Rich countries, including the EU and America, have a long way to go in freeing up farm trade.
  • The two trade behemoths, America and the EU, have costly regulatory duplication in areas such as drug testing and food safety.

Sources:

  • The Economist, November 22nd, 2004 (the article does not mention the publication date, but it is assumed to be the date of the article).