Frans Timmermans – Photo EC
(BRUSSELS) – The European Commission published Wednesday a reflection paper on how the EU should deal with globalisation in the future, launching a debate on its benefits and downsides for the lives of Europeans.
While globalisation benefits the European economy overall, “this means little to our citizens if the benefits are not shared fairly and more evenly,” said Commission first vice-president Frans Timmermans. “Europe must help rewrite the global rulebook so that free trade becomes fair trade. So that globalisation becomes sustainable and works for all Europeans.”
Globalisation has helped lift hundreds of millions of people out of poverty and enabled poorer countries to catch up, says the reflection paper. For the EU, global trade has boosted EU economic growth, with every EUR 1 billion of additional exports supporting 14,000 jobs. Cheaper imports also benefit poorer households in particular.
But the EU executive says the benefits are not automatic nor evenly distributed among citizens.
The report points out that Europe is impacted by the fact that other countries do not all share the same standards in areas such as employment, environmental or safety standards, making it more difficult for European companies to compete on price alone with their foreign counterparts; this can lead to factory closures, job losses or downward pressure on workers’ pay and conditions.
Globalisation needs to be “properly harnessed,” says the report. To do this, the EU could ensure better distribution of the benefits of globalisation by working together with Member States and regions as well as with international partners and other stakeholders.
Suggestions in the paper are that the EU could push for new rules to create a level-playing field by addressing harmful and unfair behaviour like tax evasion, government subsidies or social dumping. Effective trade defence instruments and a multilateral investment court could also help the EU act decisively against countries or companies that engage in unfair practices.
On the domestic front, the paper also suggests tools to protect and empower citizens through robust social policies and providing the necessary education and training support throughout their lives. Progressive tax policies, investing in innovation and strong welfare policies could all help redistribute wealth more fairly.
And use of EU structural funds to assist vulnerable regions and the EU Globalisation Adjustment Fund to help displaced workers find another job can help mitigate negative impacts.
