How "economic populists" are dividing EU and what risks this poses for Ukraine
The rift within the EU between a camp of liberal, free-trading countries and a group of "economic populists" may deepen soon.
On 26 January, at a regular meeting of the EU Council of Agriculture Ministers, Poland, supported by three other member states (Austria, Slovakia and Hungary), staged a demarche against the EU’s policy on trade in agri-food products.
Read more about their demands and the possible consequences of this demarche in the column by Nazar Bobytskyi of the Brussels office of the Ukrainian Agribusiness Club: Overly free trade: what consequences will the farming dispute between EU countries have for Ukraine.
According to a memorandum submitted on behalf of Poland, Austria, Slovakia and Hungary, all future agreements that the European Union concludes with third countries in the field of agri-food trade must include safeguard measures as mandatory provisions.
As an example of the application of such safeguard measures, the Polish document cites the EU agreement with the MERCOSUR bloc.
"The updated tariff quotas in last year’s agreement under the EU-Ukraine Association Agreement also came under criticism," the author notes.
According to him, Poland and its like-minded partners criticise the safeguard measures introduced in these agreements as "insufficient" to protect the interests of European farmers and have submitted proposals to strengthen them.
Among other things, the document insists that agricultural producers from third countries must also comply with EU agricultural production standards.
The authors of the document argue that European farmers are forced to operate within the narrow confines of strict EU legislation, which gives products from third countries an unfair competitive advantage over European agricultural products on the EU market.
"The discussion of the Polish proposals by EU agriculture ministers showed that they are supported by a significant number of EU member states, primarily from Southeastern and Central Europe, France, as well as partly Italy and Belgium," writes Nazar Bobytskyi.
At the same time, countries such as Germany, the Netherlands and Denmark opposed the proposals.
According to the EU trade policy expert, Germany stated directly that safeguard measures in the MERCOSUR agreement were conceived as an exception rather than a precedent and should remain so.
These countries appealed to the complex geopolitical situation, the EU’s need to seek alternative export markets, and to form a "circle of friends" in view of the unpredictability and hostility of the Trump administration’s policies.
"And most importantly, these countries pointed to a fundamental principle of international trade that continues to influence state trade policy even amid the decline of the World Trade Organization system – the principle of reciprocity. Since no one can guarantee the EU that the same requirements and measures will not one day be applied by influential and important countries to European exports themselves," the author notes.
In his view, the discussion in the EU Council of Ministers should not be perceived as an unpleasant surprise, but rather as another alarming symptom of the degradation of the old international order based on liberal principles of freedom, the primacy of cooperation, and the rule of law.
The expert adds that despite its declared determination to defend the old order, the EU is forced to adapt to new realities: unlimited protectionism by the United States, the cynical circumvention of rules by China’s state capitalism, and the stubborn insistence on a "right to economic development" as a kind of indulgence for trade barriers by countries such as India.
This trend is further reinforced by a wave of political populism that threatens to spread to ever more European countries and that shamelessly seeks to secure the support of farmers – the most politically mobilised social group.
The deepening split within the EU will call into question Brussels’ ability to build alliances of partners around itself, warns the head of the Brussels office of the Ukrainian Agribusiness Club.
At the same time, much will depend on the political will and diplomatic skill of the leaders of EU institutions.
Only one thing remains beyond doubt: the EU is rapidly evolving in a new, harsh, rule-less world, searching for mechanisms to insure itself and hedge risks.