Russia invades Ukraine, China threatens Taiwan – these are dangerous times. But geopolitical tensions have breathed new life into trade policy: Many of Bernd Lange‘s colleagues in the European Parliament, who previously drifted along in the trade-critical mainstream, now appreciate stable relations. The long-time chairman of the Trade Committee expects a whole series of new deals in the coming months, as he revealed to Amelie Richter and me in an interview.
The SPD politician also warns Beijing not to act on its threats against Taiwan, or else there would be far-reaching EU sanctions, regardless of economic damage to Germany and Europe. The local industry has apparently not yet realized how great the risks are: According to the Institute of the German Economy, it continues to invest in China at record levels. The consequences of a conflict over Taiwan could “even lead to bankruptcy” for particularly exposed companies, as the economists warn. More on this in the News.
The debate about high gas prices is likely to cut a few more capers, and we consider FDP Vice Chairman Wolfgang Kubicki’s call to open the Nord Stream 2 Baltic Sea pipeline one of them. The discussion about the operating lifetimes of the remaining nuclear power plants is nevertheless hitting the home stretch: Chancellor Scholz expects the results of the network operators’ stress test at the end of August, or beginning of September. Meanwhile, the forced ramp-up of coal-fired power plants has a side effect: The prices of certificates in European emissions trading are reaching old highs – much to the chagrin of the affected industries.
I wish you a great start to the week!
Mr. Lange, the EU has always emphasized that it does not want to side with Washington in the trade dispute between the United States and China. Can this be sustained, given Russia’s attack on Ukraine and Beijing’s threats against Taiwan?
We are not caught in the middle, we are clearly linked to the USA in terms of values. But we have different interests. The position of holding China down by all economic means and thus economically securing the supremacy of the United States is certainly not in our interest. We cannot succeed in isolating China politically or economically. Where we can cooperate and exert influence, we should do so. The time of a bipolar world is over. That is why we are also having these discussions with our American friends.
You were recently in Washington – what was your impression?
Anti-China policy was strongly in the foreground there. The big competitor, the danger, for Washington is China. You can also see it in US national policy: The new climate and social package includes support for EVs. There, the clear announcement is that products that are mainly manufactured in China will not be included in the subsidy program. Only batteries and raw materials produced in the USA are eligible. This means, however, that European cars will not be subsidized either. The interests of the United States are very strongly focused on their own country.
Should the EU take this form of discrimination to the WTO?
There are conflicting interests, and that can’t be wiped off the table. But we should try to clarify the issue through dialog.
Despite these differences of opinion, should the EU seek a trade agreement with Washington, given the tensions with Russia and China?
In the US, it is currently impossible to get a congressional mandate for a trade agreement with the EU. The administration does not want to try either, that is the clear announcement of Trade Representative Katherine Tai. In this respect, there is currently this rather low-threshold cooperation within the framework of the Trade and Technology Council, which I think makes sense.
Could the differentiated EU policy toward China that you describe be sustained if aggression against Taiwan actually occurred?
No, not at all. That was clearly stated at the economic dialogue with Beijing in July. If there will be aggressive actions against Taiwan, then there will be a reaction with sanctions and tough policies.
This would mean considerable losses of prosperity in Europe.
Certainly, but there’s no getting around it at all. Then there will be no more cooperation.
Should the EU develop relations with Taiwan via an investment agreement? Or do you fear an aggressive reaction from Beijing?
The political assessment of the EU Commission is that, firstly, this is not economically necessary and, secondly, it would cause additional problems with regard to the One China policy. I don’t see it that way at all. If we were to conclude an agreement with Taiwan similar to the one we negotiated with the People’s Republic through the CAI, then there is no rational reason for such a reaction. Only if an agreement with Taiwan were to go beyond the CAI, then that would certainly lead to an escalation. (Read more passages of the interview at China.Table).
Is the geopolitical situation giving new impetus to trade policy as a whole?
Absolutely. In the European Parliament, too, I have observed among colleagues who have recently been part of the trade-critical mainstream that the issue of stable, resilient relations with countries has taken on greater significance.
Chancellor Scholz and Economic Affairs Minister Habeck traveled to Canada yesterday to deepen cooperation on energy supplies and raw materials. Do you have any hope that the situation will also bring movement to the stalled ratification of the CETA agreement?
In a few weeks, CETA will have been provisionally in force for five years. Canada is a close ally – if you can’t get it right with Canada, who can you get it right with? The realization has also grown in the parties around the traffic light coalition – I’m sure Germany will ratify soon. Then we would have 17 of 27 member states. I’m also confident about France. Things will get a bit tricky again in Belgium with the five regional parliaments, but there, too, I see an increasing sense of reality.
How can such hang-ups be avoided in the future?
The lesson to be learned from CETA and also from the ECJ ruling on the Singapore Agreement is that we must clearly separate the trade part from the investment part. Then the trade agreement can finally enter into force with ratification in the European Parliament. This is what we did with Japan and Vietnam, and this is why we will also split the modernized agreement with Mexico. We should also proceed in this way with Mercosur.
The agreement with the four Mercosur countries has been on hold since 2019. Will there be a new attempt after the presidential election in Brazil at the beginning of October?
If Lula wins the election, we are ready. There is still room for discussion on the sustainability criteria in the agreement, i.e., the protection of the rainforest in the Amazon region, but also on workers’ rights. In the meantime, there is a separate EU legislative project against deforestation, which should make the discussion a bit more objective.
Could a supplemental declaration to the trade agreement address lingering concerns?
It would make sense to set out a kind of roadmap for implementing the sustainability standards in a supplementary declaration. These commitments would have to be legally binding, as we also expect from future contractual partners.
The agreement with Chile has largely been negotiated but was put on hold out of consideration for the elections in France. Has the time now come?
I assume that a political agreement and signature can be reached by the end of the year. The agreement with Chile is a very modern one: We have a separate subchapter on gender issues, and the sustainability chapters are also very good.
Chile has valuable raw materials. What significance would this agreement have for the EU?
Chile is the world’s largest producer of lithium, and 40 percent of copper comes from there. We want access to these raw materials, but in a fair way – that was not always the case with previous EU supply contracts. The Chilean government wants part of the value creation to take place in the country. We support this, even if it may not be a battery factory. Chile could also be an important supplier of green hydrogen – the conditions there are very favorable. So it’s in our interest to regulate the conditions for exporting hydrogen to Europe in the agreement.
The Commission is also negotiating a trade agreement with Australia – another resource-rich country. How do you assess the time horizon?
There are still a few quibbles in the negotiations, for example, regarding geographical designations of origin for wine, but also the Australian import tax for premium cars. However, the new government in Canberra will make things easier: It has a completely different approach to climate protection and accepts that trade policy must also serve to reduce CO2 emissions. I assume that an agreement could be possible by the beginning of next year.
A new attempt is being made by the Commission for a trade agreement with India. How confident are you that these talks will produce anything?
I am not too optimistic. The impetus for this came from the geopolitical situation, the Russian attack on Ukraine, and you can also see that India is repositioning itself in the Pacific region. But there are so many issues: on tariffs, on patent protection in agriculture, on production conditions, on services from India in Europe.
The EU Commission plans to present its proposal for an import ban on products from forced labor in mid-September. What do you expect from this?
There will be a marketing ban on products from forced labor. Thus, it is also possible that forced labor will be sanctioned within the European Union, and these products will not be allowed on the market. In matters of evidence, there should be close cooperation with the International Labor Organization (ILO).
What else is on your agenda after the summer break?
Active consultations on the supply chain law are now starting. However, responsibility within the European Parliament has not yet been fully clarified. There is a proposal that the Justice Committee has the lead, but this is not yet confirmed. In addition, there is the legislation against economic coercion, the “anti-coercion instrument”. Here, the scope and definition still need to be clarified. We would like to pass it in the EU Parliament in October and then hopefully still have the trilogue under the Czech Council Presidency. Lithuania, in particular, is exerting internal pressure here.
She is the woman for digital in the Brussels office of the Federation of German Consumer Organisations (vzbv): Isabelle Buscke. Even during her political studies, the German-French citizen was bothered by the fact that there were practically only three operating systems for computers on the market: Apple, Windows, and Linux. That was one of the reasons why she finally decided to work in the “fantastic political field of consumer protection” instead of becoming a teacher, as she had planned.
Buscke also briefly tried her hand at a political party but decided early on that non-party political work suited her more – specifically at the European level. “I’m driven by European politics, more than national politics.” With her Franco-German background, she says, her path into EU politics was almost preordained. “It shapes you to grow up so closely with two nationalities and points of view,” says the 35-year-old.
In the meantime, she even acquired a third nationality: Belgian. For twelve years now, she has been living in Brussels, “the heart of EU politics”, as she affectionately calls the city. As head of the Brussels office, she has represented consumers from Germany for almost ten years, working on major projects such as the abolition of roaming. Unsurprisingly, the topics of digitization and climate protection are currently at the top of the consumer protection agenda.
In the case of the latter, the main issue is the regulation of designations such as “particularly resource-friendly”, or “produced in a climate-neutral way”, in order to effectively combat greenwashing. “Our wish would have been a central body to review these claims, as EFSA does for claims about food.” Currently, however, there is at least a uniform methodology to make the claims verifiable and, if necessary, to sanction companies if such a claim turned out to be false.
Buscke’s heartfelt topic, however, is and remains the digitization of everyday life. One major problem that the EU has not yet answered satisfactorily from the consumer’s point of view is the question of regulating trading platforms. Here, companies are happy to shirk their responsibility if third-party providers violate consumers’ rights, says Buscke.
Equally relevant, but still in the early stages of negotiations, is the regulation of artificial intelligence. Here, consumer advocates are primarily concerned with the question of whether only high-risk AI systems are really risky for consumers, or whether the focus should not already be lower, at medium risk. “Currently, we are still focusing too much on fundamental rights and the integrity of life and limb. That’s important, of course, but we also want economic aspects to be taken into account,” says Buscke.
Artificial intelligence could, for example, ensure that a consumer doesn’t get the insurance he or she would like to have because the algorithm is subject to its own rules. “So there can be direct consumer harm. It’s an issue that I think will be with us for the next few years.” But for now, without her – starting at the end of August, Buscke will take a few months of parental leave. Lisa-Martina Klein
Russia invades Ukraine, China threatens Taiwan – these are dangerous times. But geopolitical tensions have breathed new life into trade policy: Many of Bernd Lange‘s colleagues in the European Parliament, who previously drifted along in the trade-critical mainstream, now appreciate stable relations. The long-time chairman of the Trade Committee expects a whole series of new deals in the coming months, as he revealed to Amelie Richter and me in an interview.
The SPD politician also warns Beijing not to act on its threats against Taiwan, or else there would be far-reaching EU sanctions, regardless of economic damage to Germany and Europe. The local industry has apparently not yet realized how great the risks are: According to the Institute of the German Economy, it continues to invest in China at record levels. The consequences of a conflict over Taiwan could “even lead to bankruptcy” for particularly exposed companies, as the economists warn. More on this in the News.
The debate about high gas prices is likely to cut a few more capers, and we consider FDP Vice Chairman Wolfgang Kubicki’s call to open the Nord Stream 2 Baltic Sea pipeline one of them. The discussion about the operating lifetimes of the remaining nuclear power plants is nevertheless hitting the home stretch: Chancellor Scholz expects the results of the network operators’ stress test at the end of August, or beginning of September. Meanwhile, the forced ramp-up of coal-fired power plants has a side effect: The prices of certificates in European emissions trading are reaching old highs – much to the chagrin of the affected industries.
I wish you a great start to the week!
Mr. Lange, the EU has always emphasized that it does not want to side with Washington in the trade dispute between the United States and China. Can this be sustained, given Russia’s attack on Ukraine and Beijing’s threats against Taiwan?
We are not caught in the middle, we are clearly linked to the USA in terms of values. But we have different interests. The position of holding China down by all economic means and thus economically securing the supremacy of the United States is certainly not in our interest. We cannot succeed in isolating China politically or economically. Where we can cooperate and exert influence, we should do so. The time of a bipolar world is over. That is why we are also having these discussions with our American friends.
You were recently in Washington – what was your impression?
Anti-China policy was strongly in the foreground there. The big competitor, the danger, for Washington is China. You can also see it in US national policy: The new climate and social package includes support for EVs. There, the clear announcement is that products that are mainly manufactured in China will not be included in the subsidy program. Only batteries and raw materials produced in the USA are eligible. This means, however, that European cars will not be subsidized either. The interests of the United States are very strongly focused on their own country.
Should the EU take this form of discrimination to the WTO?
There are conflicting interests, and that can’t be wiped off the table. But we should try to clarify the issue through dialog.
Despite these differences of opinion, should the EU seek a trade agreement with Washington, given the tensions with Russia and China?
In the US, it is currently impossible to get a congressional mandate for a trade agreement with the EU. The administration does not want to try either, that is the clear announcement of Trade Representative Katherine Tai. In this respect, there is currently this rather low-threshold cooperation within the framework of the Trade and Technology Council, which I think makes sense.
Could the differentiated EU policy toward China that you describe be sustained if aggression against Taiwan actually occurred?
No, not at all. That was clearly stated at the economic dialogue with Beijing in July. If there will be aggressive actions against Taiwan, then there will be a reaction with sanctions and tough policies.
This would mean considerable losses of prosperity in Europe.
Certainly, but there’s no getting around it at all. Then there will be no more cooperation.
Should the EU develop relations with Taiwan via an investment agreement? Or do you fear an aggressive reaction from Beijing?
The political assessment of the EU Commission is that, firstly, this is not economically necessary and, secondly, it would cause additional problems with regard to the One China policy. I don’t see it that way at all. If we were to conclude an agreement with Taiwan similar to the one we negotiated with the People’s Republic through the CAI, then there is no rational reason for such a reaction. Only if an agreement with Taiwan were to go beyond the CAI, then that would certainly lead to an escalation. (Read more passages of the interview at China.Table).
Is the geopolitical situation giving new impetus to trade policy as a whole?
Absolutely. In the European Parliament, too, I have observed among colleagues who have recently been part of the trade-critical mainstream that the issue of stable, resilient relations with countries has taken on greater significance.
Chancellor Scholz and Economic Affairs Minister Habeck traveled to Canada yesterday to deepen cooperation on energy supplies and raw materials. Do you have any hope that the situation will also bring movement to the stalled ratification of the CETA agreement?
In a few weeks, CETA will have been provisionally in force for five years. Canada is a close ally – if you can’t get it right with Canada, who can you get it right with? The realization has also grown in the parties around the traffic light coalition – I’m sure Germany will ratify soon. Then we would have 17 of 27 member states. I’m also confident about France. Things will get a bit tricky again in Belgium with the five regional parliaments, but there, too, I see an increasing sense of reality.
How can such hang-ups be avoided in the future?
The lesson to be learned from CETA and also from the ECJ ruling on the Singapore Agreement is that we must clearly separate the trade part from the investment part. Then the trade agreement can finally enter into force with ratification in the European Parliament. This is what we did with Japan and Vietnam, and this is why we will also split the modernized agreement with Mexico. We should also proceed in this way with Mercosur.
The agreement with the four Mercosur countries has been on hold since 2019. Will there be a new attempt after the presidential election in Brazil at the beginning of October?
If Lula wins the election, we are ready. There is still room for discussion on the sustainability criteria in the agreement, i.e., the protection of the rainforest in the Amazon region, but also on workers’ rights. In the meantime, there is a separate EU legislative project against deforestation, which should make the discussion a bit more objective.
Could a supplemental declaration to the trade agreement address lingering concerns?
It would make sense to set out a kind of roadmap for implementing the sustainability standards in a supplementary declaration. These commitments would have to be legally binding, as we also expect from future contractual partners.
The agreement with Chile has largely been negotiated but was put on hold out of consideration for the elections in France. Has the time now come?
I assume that a political agreement and signature can be reached by the end of the year. The agreement with Chile is a very modern one: We have a separate subchapter on gender issues, and the sustainability chapters are also very good.
Chile has valuable raw materials. What significance would this agreement have for the EU?
Chile is the world’s largest producer of lithium, and 40 percent of copper comes from there. We want access to these raw materials, but in a fair way – that was not always the case with previous EU supply contracts. The Chilean government wants part of the value creation to take place in the country. We support this, even if it may not be a battery factory. Chile could also be an important supplier of green hydrogen – the conditions there are very favorable. So it’s in our interest to regulate the conditions for exporting hydrogen to Europe in the agreement.
The Commission is also negotiating a trade agreement with Australia – another resource-rich country. How do you assess the time horizon?
There are still a few quibbles in the negotiations, for example, regarding geographical designations of origin for wine, but also the Australian import tax for premium cars. However, the new government in Canberra will make things easier: It has a completely different approach to climate protection and accepts that trade policy must also serve to reduce CO2 emissions. I assume that an agreement could be possible by the beginning of next year.
A new attempt is being made by the Commission for a trade agreement with India. How confident are you that these talks will produce anything?
I am not too optimistic. The impetus for this came from the geopolitical situation, the Russian attack on Ukraine, and you can also see that India is repositioning itself in the Pacific region. But there are so many issues: on tariffs, on patent protection in agriculture, on production conditions, on services from India in Europe.
The EU Commission plans to present its proposal for an import ban on products from forced labor in mid-September. What do you expect from this?
There will be a marketing ban on products from forced labor. Thus, it is also possible that forced labor will be sanctioned within the European Union, and these products will not be allowed on the market. In matters of evidence, there should be close cooperation with the International Labor Organization (ILO).
What else is on your agenda after the summer break?
Active consultations on the supply chain law are now starting. However, responsibility within the European Parliament has not yet been fully clarified. There is a proposal that the Justice Committee has the lead, but this is not yet confirmed. In addition, there is the legislation against economic coercion, the “anti-coercion instrument”. Here, the scope and definition still need to be clarified. We would like to pass it in the EU Parliament in October and then hopefully still have the trilogue under the Czech Council Presidency. Lithuania, in particular, is exerting internal pressure here.
She is the woman for digital in the Brussels office of the Federation of German Consumer Organisations (vzbv): Isabelle Buscke. Even during her political studies, the German-French citizen was bothered by the fact that there were practically only three operating systems for computers on the market: Apple, Windows, and Linux. That was one of the reasons why she finally decided to work in the “fantastic political field of consumer protection” instead of becoming a teacher, as she had planned.
Buscke also briefly tried her hand at a political party but decided early on that non-party political work suited her more – specifically at the European level. “I’m driven by European politics, more than national politics.” With her Franco-German background, she says, her path into EU politics was almost preordained. “It shapes you to grow up so closely with two nationalities and points of view,” says the 35-year-old.
In the meantime, she even acquired a third nationality: Belgian. For twelve years now, she has been living in Brussels, “the heart of EU politics”, as she affectionately calls the city. As head of the Brussels office, she has represented consumers from Germany for almost ten years, working on major projects such as the abolition of roaming. Unsurprisingly, the topics of digitization and climate protection are currently at the top of the consumer protection agenda.
In the case of the latter, the main issue is the regulation of designations such as “particularly resource-friendly”, or “produced in a climate-neutral way”, in order to effectively combat greenwashing. “Our wish would have been a central body to review these claims, as EFSA does for claims about food.” Currently, however, there is at least a uniform methodology to make the claims verifiable and, if necessary, to sanction companies if such a claim turned out to be false.
Buscke’s heartfelt topic, however, is and remains the digitization of everyday life. One major problem that the EU has not yet answered satisfactorily from the consumer’s point of view is the question of regulating trading platforms. Here, companies are happy to shirk their responsibility if third-party providers violate consumers’ rights, says Buscke.
Equally relevant, but still in the early stages of negotiations, is the regulation of artificial intelligence. Here, consumer advocates are primarily concerned with the question of whether only high-risk AI systems are really risky for consumers, or whether the focus should not already be lower, at medium risk. “Currently, we are still focusing too much on fundamental rights and the integrity of life and limb. That’s important, of course, but we also want economic aspects to be taken into account,” says Buscke.
Artificial intelligence could, for example, ensure that a consumer doesn’t get the insurance he or she would like to have because the algorithm is subject to its own rules. “So there can be direct consumer harm. It’s an issue that I think will be with us for the next few years.” But for now, without her – starting at the end of August, Buscke will take a few months of parental leave. Lisa-Martina Klein
