Can Globalisation be a level playing field?

Can Globalisation be a level playing field
Speech by Peter Mandelson at the MEDEF Summer University
Paris, 30 August 2007
I only have a few minutes and I want to make a few very general points as a way of marking
out some ground for our debate. The leitmotif of the University this year is jouer le jeu:
playing the game.
One of the defining things about a game is that it has rules. There may be winners and
losers, but the players know they are competing on the same terms.
Plenty of people don't see economic globalisation this way. They talk about globalisation as if
it doesn't have any rules. Or at least they argue that big new players like China simply don’t
respect the rules the way we in Europe do. Many of the same people think that Europe is
losing as a result.
We are not losing. In the last ten years, European exports have grown by an average of
almost 8% a year. The output of EU industry has increased by 40% over the last two
decades and the EU's position on world markets remains almost unchanged. Our service
industries are world leaders in a wide range of fields. We still have the largest number of
international brands. Our design and know-how in many areas is second to none.
Globalisation is not something beyond our control, bigger than our governments. It is not
something imposed on us. We can shape globalisation so that its huge positive economic
benefits are shared and its negative effects are minimized. This does not happen
automatically. It is a matter of public policy. It's up to us - combining economic change with
social justice - the political challenge to which I have devoted most of my adult life.
In trade, of course we want to operate on a level playing field when we compete. I accept – I
think we all accept – that globalization has fundamentally changed the shape and the size of
the playing field. But this means rules are more important than ever, and we do have the
means to strengthen them, and enforce them.
How First, by defending the WTO and its rules within the open multilateral trading system.
This system provides the most important instrument we have at international level for making
globalisation equitable and promoting global growth. It is the most effective, inclusive and just
way of expanding and managing trade. It is, uniquely, a form of international governance with
teeth.
It is true that the days when the developed world called the shots in the GATT system and
the WTO are over. But as Europeans, we have no reason to regret this. Coming into the
WTO drove China's average tariff down to 8% - one of the lowest in the developing world.
Doha can drive it down further. Through the WTO, we were able this year to remove India's
discriminatory duties on French wines and spirits. It is much more in our interests to see big
new players like China, Brazil and India brought into the system. Locked into the system.
Accepting the responsibilities of membership along with the rights. Then we can play our
hand strongly in this more balanced environment.
That is why the Doha Round is so fundamentally important. If successfully concluded, it will
anchor the emerging economies more firmly with the WTO and its system of international
trade rules. Doha will push others to match us where we have reformed. A Doha agreement

will open the markets of the emerging economies further and lock in the access we already
have to global markets. This is the best insurance policy against a global resurgence of
protectionism or trade politicking – not just in the US, but in growing middle income
economies too. In doing so it would emphatically say that the emerging economies are
playing in the same system, by the same rule book. A failed Doha Round will badly damage
confidence and weaken the emerging economies attachment to the rules-based international
trading system.
Second, we need to push for open trade, but insist on fair trade. The EU has a range of tools
at our disposal to defend against genuinely unfair trade – and we use them. Every time I'm
accused of turning a blind eye to unfair trade as EU Trade Commissioner I just recall that last
year the Commission proposed 36 anti-dumping measures - the highest number of any
economy globally.
We are reviewing the EU's Trade Defence system. We live in a increasingly complex world of
internationalizing supply and production chains, in China and elsewhere. But I believe it is
possible to strengthen the political support for the system among EU Member States, to
improve the transparency of the system, and to increase the accessibility of the system for
small and medium sized businesses. When I come forward with proposals in the Autumn I
hope MEDEF will be there with constructive engagement and support. This is not about
unilateral disarmament. Far from it. It is an attempt to ensure our tools stay sharp – and
widely supported - in a changing world.
When it comes to the barriers to fair trade we are face, our biggest problems now are not
tariffs, but non-tariff obstacles behind the border. I know EU business is deeply frustrated by
regulatory discrimination in the emerging economies. Barriers to investment and unfair
conditions for operating in those markets. And of course the chronic problem of intellectual
property theft.
In the last year, through the Commission’s Global Europe strategy, we have stepped up our
work on all these problems. We have new market access teams drawing on business
expertise now operating in all the emerging markets to identify and remove market access
problems. We are taking a tougher line on IPR, especially in China, where I have refused to
rule out the option of taking Beijing to the WTO – as we have already done over the issue of
car parts tariffs.
Let me finish by saying that France, notably, is playing the globalization game better than
your pessimists think. In fact France is doing better in a globalised world than it ever did in an
'unglobalised' one. It is Europe's second biggest exporter. 20% of employment is tied to
export industries. Before the Second World War France suffered from the economic
nationalism of others – British mercantilism, German protectionism. It has been one of the
biggest beneficiaries of the post Second World War global economic order, opening markets
for France's goods and investment.
When President Sarkozy was running for office in the spring he said: "the question is not
whether globalisation is good or bad, but if France is ready to shape it". My fundamental
point today is simply that it is wrong to believe that the only way to be political about
globalization is to oppose it.
There is another politics of globalization that is positive, that argues for the gains and
addresses the costs. Through the WTO and our trade policy we have the means to defend a
vision of globalization that does have rules; that does require everyone to compete by the
same rule book. And what, uniquely, the combined weight of the European Union gives us is
the strength both to shape that rule book and enforce it.