EU holds cards when negotiating with Trump on tariffs, says ex-WTO chief Lamy

euronews (in English)

There's a range of options for the EU to open trans-Atlantic negotiations to persuade US President Donald Trump not to slap harmful tariffs on EU goods, the former EU trade commissioner and WTO chief told Euronews.

Transcript

00:00Europe is in an existential crisis, with war on the continent, an unpredictable US and

00:13potential trade tariffs along the way. For the Europe Conversation, I catch up with former

00:17head of the WTO Pascal Lamy. He says the EU should negotiate rather than retaliate, but

00:24with a gun in its pocket. Pascal Lamy, thank you very much for joining us on the Europe

00:30Conversation. I'm going to start with you to ask you about, you know, your impression

00:34of the world we're in now. Now that Donald Trump is back in the White House, that there

00:39seems to be a backlash against globalisation, against free trade, against basic policies,

00:46you know, in relation to civil rights and so on. How do you feel the world is right

00:50now? It's in bad shape, and in a much worse shape than the world I've been living with

01:02and working with for many years of my life. So I'm getting old. And I'm worried that let's

01:13say for the last five to 10 years, the system we had, which was far from perfect, but still

01:23had a number of benefits in harnessing globalisation and regulating a number of possible problems.

01:37A lot of that is disappearing, starting, of course, with the invasion of Ukraine, which

01:44is just sitting on any principle of international law. And now the US want to overhaul the system.

01:54To do what? Unclear. But they both say this system is not good for us. And we need to

02:05use the power we have to change it. And this, of course, puts the EU, which is the epitome

02:13of a regulated, disciplined, ordo liberale system in a bind. And I'm worried about the

02:24world. I'm very much worried about whether the EU, as the future of my children and grandchildren

02:33will be able to overcome this challenge, which, in my view, is existential.

02:41And how would you think that the EU needs to respond now? Does it need to just wait

02:44and see what Trump does? And if there are tafts, should the EU respond accordingly?

02:50Now, first thing the EU should do, and has done, is get prepared. They've been thinking

02:59about that for months. The notion that Trump would be president of the US appeared, unfortunately,

03:06in my view, quite some time ago. So then the big question is, retaliate or negotiate? There

03:17are things the US want from us. And there are things we want from the US, such as other

03:24than being shot at. So there is a range of issues where we probably could open an interesting

03:36transatlantic negotiation. So that's the case for wait and see. And say, which EU authorities

03:45have been saying, we're ready to look at a deal.

03:49So what kind of deals? What are you talking about, specifically, that we would negotiate

03:52with, that we have, you know, in our armaments?

03:55I mean, for instance, take the example of cars. He's got a crappy argument, and he's

04:04got a reasonable argument. The crappy argument is, Angela, there are plenty of Mercedes in

04:12New York, zero Chevron in Berlin. This is a problem. As long as there won't be an equal

04:19number of Chevrons in Berlin, this is a problem. Stupid thing. Where he's right is that the

04:28EU has an import tariff of 10%. And the EU and the US have an import tariff for cars

04:33at 3%. Now, is it the reason why there is no Chevron in Berlin? No way. But it exists.

04:44So maybe we could accept 5% or 6% or 7% or 8% tariff in the US, if they accept to lower

04:56their tariff on things which we would like to export more in the US, and which are not

05:02in his mind as a big problem. Or maybe we could negotiate that against something to

05:10be done in NATO that the US don't want to do, but that we want to do. So there are plenty

05:15of things. Now, of course, and that's my experience of negotiating with the US and China and other

05:24big shots. When I was in this business, you should do that with a gun in your pocket.

05:33If you negotiate with the mafia, you may have to, but you need a gun in your pocket.

05:41You need to show your strength and say ready to deal. But if the deal does not work, if

05:49you believe you will debalance a deal just because you're threatening us, we have the

05:54means to retaliate, which is true, because we have a large market and US exporters of

06:01a number of products will have problems if we retaliate.

06:04Where did it all go wrong? I mean, do you understand the backlash against globalisation?

06:11I've always said, and you and others always heard me saying, that a globalisation is here

06:19to stay. Not least because three quarters, at least, of the people of this planet like

06:28globalisation, because they see it as a better future for them, because they are poor. And

06:37second, it's here to stay, but in a different shape. But the world will not de-globalise.

06:47Now, what I've always said is, globalisation is efficient and painful. And it is efficient

06:56because it is painful, and it is painful because it is efficient. If I do something

07:00better than you do, and you do something better than I do, it's a win-win.

07:06And speaking of shocks from outside, you have Elon Musk, who's basically in the White House

07:12now, saying that he's interfering in UK politics, but also German politics. Do you think European

07:19politics can stay the course to protect itself?

07:22I mean, we have to. At the end of the day, we've mentioned the environment, we've mentioned

07:29trade, we've mentioned... At the end of the day, what matters is values.

07:35And are those values being diminished?

07:37They are European values.

07:39But are they being diminished by the rise to the rise?

07:42Of course they have been diminished. I mean, democracy has receded by, let's say, 15 or

07:4820% for the last 20 years.

07:52The biggest danger, when I discuss with my American friends, who don't like Trump, and

07:59I have more of that in my sample, understandably, European Social Democrats are flabbergasted

08:07at Trump, although we try to understand.

08:11What they tell me is that the real danger is if the roots of American democracy are

08:19rotten. Corruption, I've been working with Transparency International, who's the main

08:26international organization fighting corruption for 35 years now. Corruption is a terrible

08:38destruction of democracy.

08:41Just before I let you go, the Mercosur trade deal, which has been sort of on the table

08:45for decades, pretty much. Your own country, France, is really dead against it. So are

08:50other countries, but France is really leading the charge. What do you think France should

08:54do in relation to Mercosur? Can you understand the French farmers and agricultural industry?

09:01I can understand part of why French farmers are unhappy. And I do understand why they

09:10are unhappy. What I know is that the reasons they have to be unhappy has nothing to do

09:17with Europe or Mercosur. They have to do with the way the French have handled the common

09:22agricultural policy within France. So for the French farmers who are angry, and I can

09:29understand why some of them are angry, not all. Some of them are doing pretty well,

09:34but the smaller farmers are angry. Smaller farmers have good reason to be angry. But

09:38it's not because of Europe. Europe has always had them. It's not because of Mercosur. It's

09:45because of the way the French have interpreted, translated, implemented a number of, for instance,

09:54precautionary regulation coming from Brussels. So Mercosur plays the role of a scapegoat.

10:03But I mean, it's not just the French farmers. Farmers across Europe would say that they

10:07are producing to a particularly high standard, but then what they'll have to endure is beef

10:15and agricultural products coming into their market that is produced at a much lower standard.

10:20This is wrong. There is no chicken that enters the EU market if this chicken does not follow

10:33the same regulatory phytosanitary standards as the one which are implemented in Europe.

10:39So this notion that importing food is displacing nationally produced food because it's lower

10:48quality, sanitary and phytosanitary. I'm not talking about the quality of the food

10:54itself. Yeah, of course, you're talking about the production standards. This argument that

10:58we are the victims of low standard imports is wrong. Simply wrong. It just doesn't, it's

11:07not the fact. That's the way they paint it. That's the way some of them feel it. They

11:13also feel that the checks aren't there. So even if they have to apply the standards in

11:19Mercosur countries, they won't be applied properly and therefore there will be a loophole.

11:24That's another story. The checks are for everybody and we do import quite a lot from Mercosur

11:30today. So if we have a check problem, let's solve the check problem. But it's not in importing

11:37a bit more from Mercosur in order to export quite more to Mercosur that the check problem

11:43will be changed. I do agree that we may have a check problem. But if we have it, let's

11:48solve it. Nothing to do with Mercosur.

11:50OK, Pascal Lamy, thank you very much for joining us on the European conversation.

11:53My pleasure.

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