A balanced and progressive trade policy to harness globalisation : communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions.
Date: 2018-01-29
Institutions: Directorate-General for Trade and Economic Security
Subjects: extra-EU trade, globalisation, international negotiations, international trade, multilateral relations, trade agreement (EU), trade policy

1 |

Communication from  
the Commission to the European Parliament,  
the Council, the European Economic and  
Social Committee and the Committee of the Regions

A Balanced and Progressive

Trade Policy 
to Harness Globalisation

Brussels, 13.9.2017
COM(2017) 492 final

Trade

Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that 

might be made of the following information.

Luxembourg: Publications Office of the European Union, 2017

© European Union, 2017 

Reuse is authorised provided the source is acknowledged. 

The reuse policy of European Commission documents is regulated by Decision 2011/833/EU (OJ L 330, 14.12.2011, 

p. 39).

For any use or reproduction of photos or other material that is not under the EU copyright, permission must be sought 

directly from the copyright holders.

Print 

ISBN 978-92-79-73281-2 

doi:10.10.2781/59829 

NG-01-17-969-EN-C 

PDF 

ISBN 978-92-79-73274-4 

doi:10.10.2781/947156  

NG-01-17-969-EN-N

1. INTRODUCTION

1 |

Global  trade  is  a  key  contributor  to  a  com-
petitive  and  prosperous  European  Union, 
with  more  than  30  million  jobs  supported 
by European exports to the rest of the world. 
A  globally  integrated  economy  continues  to 
benefit both large and small or medium sized 
European companies, as well as European citi-
zens, workers and consumers. But global trade 
needs to be proactively shaped and managed 
to ensure it is fair, projects values and remains 
firmly  anchored  in  a  rules-based  system. The 
European Union aims for a trade policy that 
is transparent and responsible, benefits all cit-
izens, and provides modern solutions for the 
realities of today’s economy in the middle of 
a technological change. As part of the debate 
launched  in  March  by  the  White  Paper  on 
the  Future  of  Europe,  (1)  a  reflection  paper 
(2)  sketched  out  how  trade  policy,  alongside 
other EU policies, can help harness globalisa-
tion and ensure that benefits of trade are fairly 
shared in line with EU principles of solidarity 
and sustainability.

international  environment 

The 
in  which 
the  EU  conducts  trade  policy  is  continually 
changing:  there  are  an  increasing  number  of 
actions  challenging  the  rules-based  multilat-
eral  trading  system,  which  may  also  herald  a 
protectionist  resurgence.  At  the  same  time, 
many trading nations, both major and smaller 
players,  have  shown  very  concretely  their  at-
tachment to fair and open international trade.

(1) European Commission, “White Paper reference on the Future 
of Europe”, COM(2017)2025.

(2) European Commission, “Reflection Paper on Harnessing 
Globalisation”, COM(2017)240.

The  European  Commission  works  to  ensure 
that  EU  trade  policy  evolves  to  meet  the 
Union’s  overarching  economic  and  political 
aims,  including  by  enhancing  coherence  be-
tween trade policy and other EU external and 
internal  policies.  For  example,  trade  policy 
contributes  to  the  integrated  policy-making 
of  the  2030  Agenda  for  Sustainable  Devel-
opment  by  focusing  not  only  on  economic 
aspects,  but  also  furthering  social  and  en-
vironmental  objectives,  and  contributes  to 
the European Agenda on Migration and the 
European Agenda on Security. A robust and 
progressive  policy  agenda  must  respond  to 
the  current  opportunities  and  challenges  
Europe 
furthering  Europe’s  
essential  interests.  Today,  the  Commission 
proposes  a  package  of  new  initiatives  that  
add to and complete the existing very inten-
sive  trade  agenda  of  the  Union,  in  order  to 
achieve these goals:

faces,  while 

—  First, a proposal for a Regulation 

establishing a framework to screen 
foreign direct investment coming into 
the EU, to ensure that foreign investment 
remains a major source of growth in the 
EU while protecting the EU’s essential 
interests. The legislative proposal 
is accompanied by a Commission 
Communication outlining in detail the 
strategic need for such screening;

—  Second, recommendations to open 

negotiations for trade agreements with 
Australia and with New Zealand. These 
agreements would build on the recent 
successful negotiations with Canada, 
Singapore, Vietnam as well as Japan 

| 2

among others, expanding the alliance of 
partners committed to progressive rules 
for global trade;

—  Third, a recommendation to open 

multilateral negotiations to establish a 
multilateral court for the settlement of 
investment disputes, a major innovation 
in global governance;

—  Fourth, the Commission has also 

decided to publish from now on its 
recommendations for negotiating 
directives for trade agreements, starting 
today with these three recommendations. 
This means that at the same time as 
they are submitted tothe Council for 
deliberations and transmitted to the 
European Parliament as they have been in 
the past; they are now also automatically 
transmitted to national Parliaments and 
made available to the general public, thus 
allowing for a wide and inclusive debate 
on the planned agreement from the 
outset;

—  Finally, the Commission has also decided 
to create a group to provide advice on 
the EU trade agreements, as part of its 
emphasis on transparent and inclusive 
trade policy-making.

Alongside  this  Communication,  the  Com-
mission  is  also  today  publishing  the  first 
two-year  Report  on  the  implementation  of 
its trade policy strategy “Trade for All.”(3) The 
Report charts the concrete achievements and 
work in progress over the two years since the 
strategy’s adoption, showing the lessons learnt 
that  guide  the  evolution  of  EU  trade  policy. 
It  will  be  complemented  by  a  Report  on  Im-
plementation  of  Free  Trade  Agreements  later 
this autumn, and the Commission invites all 
stakeholders to a debate on a forward-looking 
trade policy based on the two Reports and this 
Communication. In addition, building on the 
new  European  Consensus  on  Development, 
the  Aid  for  Trade  Strategy  will  be  reviewed 
this year.

(3) European Commission, “Report on the Implementation of 
the Trade Policy Strategy Trade for All”, COM (2017) 491.

3 |

2.  SEALING NEW TRADE PARTNERSHIPS  
TO BUILD PROGRESSIVE RULES  
FOR GLOBAL TRADE

The EU is committed to open trade anchored 
in  the  rules-based  multilateral  trading  sys-
tem. Openness to flows of goods, services, peo-
ple  and  capital  has  fuelled  EU  growth,  com-
petitiveness and consumer welfare. Combined 
with high standards of environmental, labour, 
consumer  and  social  protection,  it  underpins 
our prosperity, and is the most fitting way to 
make  globalisation  work  for  all  Europeans. 
Globalisation is about more than trade and its 
effects are combined with those of technolog-
ical change; but there is no doubt trade poli-
cy has an important role to play in harnessing 
globalisation to ensure its economic, social and 
environmental  effects  are  positive  for  people 
and businesses in Europe and beyond.

Ministerial Conference in Buenos Aires in De-
cember, the EU is leading the way on reshaping 
the WTO negotiating agenda, seeking to mod-
ernise world trade rules and to restore the pri-
macy of the WTO in rule-making, especially at 
a time of increasing protectionism.

The Commission is committed to deepening 
the EU’s ties with the future growth engines 
in  Asia  and  Latin  America.  Negotiations 
with  Mexico  and  Mercosur  are  advancing 
fast  and  the  Commission  is  aiming  for  a 
political  conclusion  of  the  talks  by  the  end 
of the year. The agreements negotiated with 
Singapore and Vietnam will also be brought 
forward shortly.

The EU seeks out partners who want to team 
up  to  build  open  and  progressive  rules  for 
the realities of 21st century trade, and thereby 
strengthen global governance. The EU’s recent 
agreements  with  Canada,  Singapore  or  Viet-
nam as well as the agreement in principle with 
Japan do not just create new economic oppor-
tunities for our businesses and citizens – they 
also  reflect  and  promote  the  universal  values 
the Union adheres to and preserve the right of 
governments to regulate in the public interest.

Creating new economic opportunities

To  open  new  markets,  the  European  Com-
mission  pursues  a  comprehensive  negotiating 
agenda at both multilateral and bilateral levels 
to  secure  reciprocal  market  access.  The  EU’s 
multilateral  obligations  in  the  World  Trade 
Organisation (WTO) are the basis of our trade 
relations around the world. In the run-up to the 

The  EU-Canada  Comprehensive  Economic 
and  Trade  Agreement  (CETA)  will  be  provi-
sionally applied as of 21 September. The EU 
and Japan reached an agreement in principle 
on  the  main  elements  of  an  Economic  Part-
nership  Agreement  on  6  July,  with  inten-
sive work ongoing to conclude a final text of 
the  agreement  by  the  end  of  the  year.  These 
wide-reaching  agreements  will  for  example 
remove the vast majority of duties paid by EU 
companies  on  their  trade  with  Canada  and 
with  Japan  and  will  open  markets  to  EU  ex-
ports, including agriculture, food and drinks. 
The  agreements  will  remove  barriers  across  a 
number  of  services  sectors  and  further  pro-
mote an innovative and competitive economy, 
making  it  easier  for  all  companies,  and  espe-
cially small and medium-sized enterprises, to 
do business.

| 4

Promoting the universal values the 
Union adheres to

Preserving the right to regulate

The  EU  leads  the  way,  safeguarding  high 
European standards of environmental, con-
sumer, social and labour protection as well 
as fundamental rights without compromise. 
Together  with  our  partners,  we  seek  to  use 
trade  policy  instruments  to  promote  those 
standards around the world in line with Sus-
tainable  Development  Goals,  which  identify 
trade  as  one  of  the  crucial  means  of  imple-
mentation. For example, all modern EU trade 
agreements  support  the  implementation  of 
international  environmental  protection  and 
labour standards agreements, with the EU-Ja-
pan  Economic  Partnership  Agreement  being 
the  first  international  trade  agreement  to  ex-
plicitly  support  the  Paris  climate  agreement. 
The  agreement  with  Canada  delivered  ambi-
tious outcomes on labour commitments. This 
highlights that the Commission’s approach in 
this respect as set out in its Communication 
“Trade for All” (4) is bearing fruit. The Com-
mission is currently engaged in comprehensive 
discussions with the European Parliament, the 
Council and stakeholders with a view to im-
proving  the  effectiveness  of  the  implementa-
tion and enforcement of trade and sustainable 
development provisions in our agreements.

EU  agreements  also  explicitly  preserve  the 
right of governments to regulate in the pub-
lic interest – an important principle for all fu-
ture negotiations.(5) This principle underpins 
the EU’s new approach to investment protec-
tion. The Commission is now pursuing a fully 
reformed  approach  to  investment  protection 
in its bilateral agreements, a major departure 
from  the  system  of  investor-to-state  dispute 
settlement,  as  illustrated  by  the  agreement 
with Canada.

Sealing new partnerships

The  Japan  and  Canada  agreements,  and  the 
fast progress made with partners such as Mex-
ico  and  Mercosur,  show  it  is  possible  to  cre-
ate  progressive  and  modern  trade  rules.  To 
build on this momentum the Commission is 
making  recommendations  to  the  Council  to 
negotiate  two  new  trade  agreements:  with 
Australia and with New Zealand, which add 
up to the Commission’s recent recommenda-
tion to open negotiations with Chile. The goal 
of these agreements is to promote sustainable 
growth by expanding trade, providing a solid 
platform  for  deepening  economic  ties  with 
the whole Asia-Pacific region, and expand the 
alliance of partners committed to progressive 
rules for global trade.

(4) Communication COM(2015)497 of 14 October 2015 
“Trade for All: Towards a more responsible trade and investment 
policy”

(5) The Joint Interpretative Instrument on the Comprehensive 
Economic and Trade Agreement between Canada and the EU 
and its Member States explains the commitments in greater 
detail: http://data.consilium.europa.eu/doc/document/ST-
13541-2016-INIT/en/pdf.

5 |

3.  A ROBUST TRADE AND INVESTMENT POLICY 

PROTECTING EU INTERESTS AND  
ENSURING FAIRNESS

Our  trade  policy  strives  to  make  open  trade 
fair:  ensuring  that  European  business,  work-
ers  and  farmers  compete  on  a  level  play-
ing  field  with  those  of  our  trading  partners 
around the world.

Opening  markets  goes  hand-in-hand  with 
making sure that everyone plays by the rules 
and ensuring that essential EU interests are 
being protected. The EU actively uses all the 
tools  at  its  disposal  to  enforce  commitments 
undertaken  by  its  partners,  to  remove  trade 
barriers, and to combat unfair practices. Sev-
eral EU partners, including the world’s biggest 
economies,  are  more  and  more  often  taking 
domestic  policy  action  that  would  damage 
other countries or undermine the rules-based 
multilateral trading system. The Commission 
is also ready, if needed, to take new measures 
to combat this trend.

Trade  Defence  Instruments  also  help  en-
suring  that  EU  firms  face  fair  competition. 
The Commission is working intensively with 
the European Parliament and the Council to 
achieve the proposed overall modernisation of 
trade defence instrument rules and a new an-
ti-dumping  calculation  methodology,  in  line 
with the European Council Conclusions of 23 
June 2017 calling for a swift agreement by the 
co-legislators. The updated rules would main-
tain and enhance the ability of the EU to react 
to significant market distortions in countries 
that export to the EU.

Strengthening  the  anti-subsidy  trade  defence 
instrument  is  a  key  component  in  the  EU’s 
determination to tackle one of the main root 
causes  of  unfair  international  trade:  unfair 
subsidisation  practices,  in  particular  when 
leading  to  overcapacity.  In  addition,  the  EU 
will further push for initiatives at multilateral 
level  concerning  unfair  subsidies.  In  particu-
lar, the EU is making proposals in the World 
Trade  Organisation  that  would  promote 
transparency in industrial subsidies and limit 
the use of harmful subsidies in the agriculture 
and fisheries sectors. The EU also tackles the 
problems of overcapacity through stepping up 
international economic governance, for exam-
ple seeking to address urgent problems in the 
steel sector within the Global Forum on Steel 
Excess  Capacity,  established  by  the  G20  and 
OECD members.

Another  area  where  the  interest  of  EU  pro-
ducers  are  often  adversely  affected  is  that  of 
public procurement, where many of the EU’s 
major  trading  partners  still  apply  restrictive 
practices which discriminate against EU busi-
nesses and do not ensure reciprocity in terms 
of market access. The Commission therefore 
calls on a swift adoption of its revised propos-
al  for  an  International  Procurement  Instru-
ment - a tool to promote open and reciprocal 
access to public procurement markets around 
the world.

| 6

In  the  same  vein,  the  EU’s  work  on  global 
governance rules must also adapt to the new 
challenges of global competition, such as the 
concerns  related  to  strategic  EU  assets 
being  taken  over  by  foreign  investors  –  in 
particular,  by  subsidised  and/or  state-owned 
enterprises.  The  EU’s  principled  openness  to 
FDI  is  not  going  to  change.  However,  it  has 
to be accompanied by vigorous and appropri-
ate policies to, on the one hand, open up oth-
er  economies  and  ensure  that  everyone  plays 
by the same rules, and, on the other hand, to 
protect assets against takeovers that would be 
detrimental to the vital interests of the EU or 
its Member States. Whilst the EU’s trade and 
investment  policy  remains  the  most  appro-
priate  tool  to  ensure  that  third  countries  of-
fer a level of openness for foreign investment 
equivalent to that of the EU and in promoting 
a  level  playing  field  for  EU  operators,  meas-
ures should also be taken to protect essential 
EU interests.

As  part  of  the  today’s  package  of  trade  poli-
cy  measures,  the  Commission  is  proposing 
to  increase  EU  cooperation  and  establish  a 
framework  to  screen  foreign  direct  invest-
ment coming into the EU. The aim is to pre-
vent  take-overs  of  strategic  assets  that  could 
threaten  security  or  public  order,  thus  pre-
serving Europe’s essential interests, while also 
maintaining  the  openness  of  EU  markets  to 
investment as a whole.

Today’s  Communication  on  welcoming  For-
eign Direct Investment while protecting Es-
sential  Interests  therefore  proposes  further 
concrete steps for Member States and, where 
relevant,  the  Commission  to  screen  certain 
FDI into the EU with the view to safeguarding 
security  and  public  order.  The  Communica-
tion accompanies a proposal for a Regulation 
establishing  a  framework  to  screen  foreign 
direct  investments  in  the  EU  on  grounds  of 
security and public order, together with a co-
operation  mechanism  among  Member  States 
as well as a framework for review at EU level.

7 |

4.  DELIVERING EFFECTIVE AGREEMENTS  

THROUGH A NEGOTIATION PROCESS  
THAT IS TRANSPARENT AND INCLUSIVE

How we conduct trade policy and trade ne-
gotiations  matters.  If  the  EU  is  to  deliver 
effective agreements that benefit all citizens, 
the  crafting  of  these  agreements  must  be  
accountable,  transparent,  and  inclusive. 
This is a joint responsibility of all EU Insti-
tutions,  all  Member  States  and  all  national 
Parliaments.

To  maximise  the  potential  benefits  of  our 
trade policy, the  EU  must  be  a  credible  ne-
gotiating  partner:  our  institutional  deci-
sion-making  must  be  clear,  predictable  and 
fit for purpose. This means ensuring that our 
institutional  set-up  allows  us  to  ratify  and 
implement  our  negotiated  agreements  in  an 
accountable, legitimate and effective manner. 
The  Opinion  of  the  Court  of  Justice  of  the 
European  Union  on  the  EU-Singapore  Free 
Trade Agreement(6) provides welcome clarity 
on  the  division  of  competences  in  trade  and 
investment  agreements  between  the  EU  and 
its Member States.

The  recommendation  to  open  negotiations 
with  Australia  and  New  Zealand  covers  a 
broad  list  of  subjects  fully  covered  by  the 
EU’s common commercial policy, including 
the  liberalisation  of  trade  in  goods,  services 
and  foreign  direct  investment,  public  pro-
curement,  global  rules  aimed  at  ensuring  a 
level playing field and ambitious sustainable 
development  chapters.  This  allows  moving 
forward quickly in view of the political im-
perative  of  strengthening  the  EU’s  trad-

(6) Opinion 2/15 of the Court of Justice of the European Union 
pursuant to Article 218(11) TFEU delivered on 16 May 2017.

ing  position  in  the  world. The Commission 
stands ready to conduct these negotiations at 
an accelerated pace, with a view to conclud-
ing them by March 2019.

The  recommendation  to  open  negotiations 
with  Australia  and  New  Zealand  does  not 
include investment protection and the resolu-
tion of investment disputes: the debate on the 
best  architecture  for  EU  trade  agreements 
and investment protection agreements must 
be  completed  and  the  Commission  stands 
ready  to  discuss  this  further  with  the  Coun-
cil and the European Parliament. At the same 
time,  the  Commission  continues  to  pursue 
ongoing  investment  negotiations;  including 
those with Japan, China, Myanmar and other 
partners to improve the position of EU inves-
tors abroad, whilst promoting sustainable de-
velopment and protecting governments’ right 
to regulate. The Commission also adopted to-
day  a  recommendation  to  open  negotiations 
to  establish  an  investment  court  at  multi-
lateral level. This proposal is yet another step 
towards a more transparent, coherent and fair 
approach to dealing with investor complaints 
under protection agreements.

The  legal  issue  of  division  of  competences 
should in no way impact the legitimacy and 
inclusiveness  of  the  adoption  process. This 
should be ensured irrespective of whether the 
final decision for adoption takes place at the 
EU level or also at Member States level. The 
Commission therefore welcomes the fact that 
EU Member State governments are now also 
increasingly engaging with their national and 
regional Parliaments on trade negotiations. 
National  Parliaments  indeed  play  a  key  role 

Finally, as part of its emphasis on transparent 
and inclusive trade policy-making, the Com-
mission  has  decided  to  create  an  advisory 
group  on  EU  trade  negotiations.  The  group 
will  consist  of  representatives  of  a  wide  and 
balanced group of stakeholders, ranging from 
trade  unions,  employers’  organisations,  con-
sumer  groups  and  other  non-governmental 
organisations.  They  will  provide  the  Com-
mission’s trade negotiators and policy makers 
with  high  quality  advice  on  areas  subject  to 
trade negotiations, enabling the Commission 
to  rely  on  different  perspectives  and  insights 
on trade.

| 8

in monitoring their government’s positioning 
towards EU trade negotiations. The Commis-
sion  therefore  encourages  Member  States  to 
continue  and,  whenever  possible,  ensure  the 
involvement of national Parliaments in trade 
talks at the earliest possible stage.

This is one of the key reasons why the Com-
mission  has  decided  to  publish  its  recom-
mendations  for  negotiating  directives  for 
trade  agreements,  starting  with  the  recom-
mendations  it  has  made  today  on  Australia, 
New Zealand and the Multilateral Investment 
Court,  and  in  line  with  the  practice  estab-
lished  for  Article  50  negotiations  with  the 
United Kingdom.

This also means that in line with normal prac-
tice for other types of Commission proposals, 
these recommendations will be automatical-
ly transmitted to all EU national Parliaments 
and the European Parliament at the same time 
as  being  transmitted  to  the  Council,  togeth-
er with the accompanying impact assessment 
report.  This  will  make  it  easier  for  national 
Parliaments  as  well  as  a  variety  of  stakehold-
ers to express their views to their governments 
that represent them in Council discussions at 
the  earliest  possible  stage.  The  Commission 
stands  ready  to  assist  Member  States  as  they 
involve  their  own  national  and  regional  Par-
liaments,  and  to  further  discuss  how  best  to 
facilitate parliamentary involvement.

5.  CONCLUSION

The  European  Union  must  uphold  an  open 
and  rules-based  multilateral  trading  system 
and  conduct  a  robust  and  pro-active  trade 
policy  based  on  openness,  not  protection-
ism, safeguards our continued prosperity and 
the sustainable development of the European 
economy.

To  this  end,  the  European  Union  must  pro-
mote an ambitious and progressive open, val-
ues- and rules-based trade agenda on the glob-
al  scene.  This  means  a  trade  policy  that  not 
only creates new economic opportunities for 
our  businesses  and  citizens,  but  also  reflects 
and promotes the universal values the Union 
adheres to and preserves the right of govern-
ments to regulate in the public interest.

This Commission will dedicate the rest of its 
mandate  to  building  on  previous  successful 
agreements, to deliver concrete benefits to all 
citizens. To do so, the EU needs a solid policy 
approach with consensus from all institution-
al actors. This debate must take place – yet, at 
the same time, we should not hold back from 
our task of further promoting Europe’s inter-
ests.  Therefore,  the  Commission  intends  to 
speed up all ongoing negotiations, and invites 
all institutions to swiftly engage in the debate 
on the broader architecture of EU trade agree-
ments  and  EU  investment  protection  agree-
ments.

Recent  agreements  with  Canada  and  Japan 
show  that  an  ambition  for  an  open,  rules-
based and progressive trade policy is not only 
possible.  It  also  delivers,  creating  mutually 
beneficial outcomes and strengthening global 
governance with the EU’s partners. The pack-
age  of  trade  policy  measures  unveiled  today 
furthers a modern EU trade policy that con-
tributes  to  this  Commission’s  resolve  to  har-
ness globalisation.

| 4

Print 

ISBN 978-92-79-73281-2 

doi:10.10.2781/59829 

NG-01-17-969-EN-C

PDF 

ISBN 978-92-79-73274-4 

doi:10.10.2781/947156   NG-01-17-969-EN-N