European Commission Speech [Check against delivery] Poland: Free and Open Traders Katowice, 14 May 2018 EU Trade Commissioner Cecilia Malmström European Economic Congress Ladies and gentlemen, Thank you for having me here today. It is always a pleasure to come to Poland. It is a beautiful country with proud traditions and a rich culture. And, despite what some might tell you these days, it has also traditionally been an outwardlooking country. From your unofficial motto "For our freedom and yours", to the entrepreneurial Poles that travelled abroad in search of prosperity and wealth, this openness is something worth celebrating and this year in particular, as it is 100 years since Poland regained independence. JAPAN EPA BENEFITS Poland has a lot to gain from openness these days. Pawel Zwierz knows this. He is the CEO of Manufaktura in the Lower Silesian town of Bolesławiec. They make pottery and ceramics. Just a few years ago they only had 10 people working for them. Since the EU's agreement with South Korea, the company has been growing at lightning speed. Demand has soared and they have expanded their workforce to over 200! Now they stand to grow again. After experiencing the benefits of EU trade agreements, Manufaktura has been eagerly awaiting our agreement with Japan. There are many barriers to this quality Polish product entering the Japanese market: High duties. Large numbers of tests that need to be carried out. Even different colour combinations need paperwork! With these barriers finally removed, they expect their sales to increase again. 1
The gains will be felt across sectors in Poland. Japan's imports from Poland are diverse they include agricultural products, machinery, and much more. Some products like pork, a major Polish export, will see duties either completely cut or sharply reduced. Many of these sectors will see opportunities to grow, and companies will also have the chance to create new business, seize new opportunities. Polish consumers will also benefit from lower prices on Japanese products like cars. The benefits of trade are great, but our trade agreements do so much more. The Japan agreement will protect special Polish products from low quality imitations. When we have a distinctive product, made in a special way, it deserves a special status. More than 200 European agricultural products, including herbal Polish vodka from North Podlasie, will be protected under this agreement. This will protect producers from being undercut by cheap imitations, and ensure consumers know that when they buy this Polish vodka, they are getting the real deal. OPEN VS CLOSED Unfortunately, these days, the openness that allows business to thrive is not guaranteed anymore. In recent years many have observed a new political divide. The 21st century is no longer simply defined as Left Versus Right. In the face of globalisation a new axis on the political compass has been added - it is the Open Versus Closed spectrum. The turn of the century saw: the financial crisis, the Great Recession and the migrant crisis. Some pointed to globalisation as the cause of these challenges. As a result we saw debates and political shifts. Brexit, the US election, even the French presidential election these debates were all fought along the lines of Open Versus Closed. 2
On the Open side we do not fear what is beyond our borders. We are open to prosperity, cooperation and wealth. We believe in free trade, personal freedom, and the duties that come with them. This openness extends beyond simply free trade in goods and services. It is openness to ideas, innovation, people and investment. It comes from the belief that these things make our societies stronger. On the Closed side they are in favour of building walls. They want to separate themselves from the rest of the world. It is an understandable reaction in many ways - we live in a complex world. That can be intimidating. But 90% of global growth in the next 10 to 15 years will take place outside of the EU. It is neither realistic nor wise to ignore that fact. A VISION FOR SHAPING THE WORLD Globalisation is happening. The world is interconnected in an unprecedented way - and Europe in particular. A car can be built with a German design, in a Mexican factory, with an American chassis and a Japanese transmission. These links are not undone easily, and undoing them won't solve anything. We need to make sure that globalisation happens the way we want it to. We want to shape globalisation, not to be shaped by it. And it's not only goods and services that we export through open global trade. It is our values and standards that we offer to the world sharing and enforcing them is a critical part of our response to globalisation. As the EU we have particular power to do this. We are deeply embedded in global value chains everyone does business with us. We are a market of 500 million consumers. And as a community of Member States we have significant political weight to throw around. Today I am going to explain how we use this strength to shape and harness globalisation. First, I will outline our trade negotiation agenda. Then, I will explain Europe s place in the multilateral system and our relationships with other countries. TRADE NEGOTIATING AGENDA So first, our trade negotiating agenda. The provisional application of our deal with Canada is in force and the advantages are clear. 3
Even as I speak car parts from Poznan, strawberries from Gdynia, and washing detergents from Bialystok are leaving EU ports and crossing the Atlantic Ocean. And they will be passing ships carrying maple syrup and other Canadian products. Lower tariffs mean lower prices for consumers here in Poland and the EU. And we are not just talking about products and savings. 59 000 jobs here in Poland are supported by EU exports to Canada. In total across the EU, that number rises to 865 000 jobs. If we consider EU trade at large, that's 31 million jobs dependent on exports. Think about the impact of that: 31 million people with a way to support themselves. It is no small achievement. And as we saw with Manufaktura in Bolesławiec, these jobs aren't only at big companies. 78% of Polish companies exporting to Canada are small and medium enterprises, or SMEs. SMEs are the backbone of the European economy. They represent 99% of all businesses in the EU. They have created around 85% of new jobs in the past 5 years. Months after the Canada agreement we concluded negotiations with Japan. I have already told you some of the ways Japan will benefit Polish companies, but the implications of this deal are even greater than that. They share our values and standards. They are a partner committed to open, fair and well-regulated markets. The conclusion of negotiations sent a message to the world. It said that the EU and Japan are ready to stand together. To stand against both uncontrolled liberalisation and the temptation of protectionism. The economic impact of this deal will be massive. Together the EU and Japan account for about a quarter of the world's GDP. Japan is the EU's second biggest trading partner in Asia after China. Most recently, we updated our agreement with Mexico. Our deal with Mexico in 2000 was a good one. But, almost 20 years on, it needed an upgrade. Now it includes topics like intellectual property, services, and for the first time a chapter on anti-corruption. It is important to remember that these agreements are about more than just the economy. They are strategic alliances as well. The EU and its partners are coming together to: shape globalisation, 4
stand up for open trade, and to agree on a rule book that's fair and works for everyone. We are building a circle of likeminded friends in pursuit of this. Soon our list of agreements will include Singapore and Vietnam. We are making progress with Mercosur a highly protected market where EU business stands to gain a lot! And we want to open negotiations with Australia and New Zealand. This circle of friends is growing. And it is with these partners we will shape the future of trade. So this is a snapshot of where we are with our trade negotiations. We are busy, but we continue work in other areas. We still believe that the fairest system for global trade is multilateral. So we continue to work through the World Trade Organisation. MULTILATERALISM The WTO is the fairest and best system for trade. A strong, rules-based approach to global trade: stands against protectionism, ensures a fair environment for all businesses to operate in, and creates prosperity by opening up markets worldwide. But the system is currently threatened and we need to stand up for it. Last year I was in Buenos Aires for the WTO's ministerial. I saw a failure of WTO's functions. Two of its main pillars were brought into question: the negotiation function and the dispute settlement system. These challenges are highly complex. They are compounded by longstanding transparency problems. And made worse again by members not respecting the rules. More and more the global trading community looks to the EU for leadership, and to fix the WTO: On the negotiating side, We need more flexibility in the system. We have seen narrow interests to block discussions this must be stopped. We will continue to pursue multilateral negotiations where possible, but also negotiate with groups and individual countries to keep up progress and momentum. We will do this all within the rules of the WTO. When others see the benefits that can be gained, we hope that they will follow. Where I am from in Sweden we value openness and transparency. We consider them vital to democracy and freedom. 5
They provide governments with legitimacy and help people trust them. For these same reasons, we need to improve transparency at the WTO. We have already taken up the role of lead reformer in some areas. The Multilateral Investment Court initiative is moving forward. We want to create a fairer and more transparent dispute settlement system. The US is an important, longstanding partner of ours. It simply doesn't make sense that our steel exports are a threat to US national security. Recently the US decided to prolong the EU's temporary exemptions. The extension is only until 1 st June this year. This decision creates market uncertainty, which is already affecting business. Overcapacity in steel and aluminium sectors is not a problem the EU is responsible for. It is an issue we are also deeply impacted by. Indeed, it's quite the opposite the EU has been working with partners around the world, including the US, to address this issue. The EU should be fully and permanently exempted from these US measures. We continue to speak with our US partners to avoid confrontation. But direct conflict is not the only threat. We have opened a formal safeguard investigation concerning the imports of steel. This is to counteract trade diversion. We don't want to see the EU flooded with steel that would have gone to the US. We are free traders, but we are not naïve and we follow multilateral rules every step of the way APPEAL TO POLISH ENTREPRENUERS Open global trade is one of our fundamental economic freedoms. And economic freedom is a cornerstone of a free society. In Poland, you have not always had that freedom. In the past, entrepreneurs from Poland had to go abroad to realise their visions. This resulted in the growth of major corporations like: The Warner Brothers in the United States, Patek Philippe in Switzerland, and Helena Rubinstein Incorporated which would grow to make Ms Rubenstein one of the world's most successful woman entrepreneurs. These days Polish entrepreneurs do not have to leave their homeland. Poland has profited from the EU's Single Market like few other countries. And the stronger connections we build with external markets through trade policy, the more opportunities there will be. 6
However, these opportunities do not come without responsibilities. Openness, economic or otherwise, cannot be taken for granted. This must be argued for, and supported, relentlessly! I call on you, as leaders of Polish business, to do so now and always! So that future generations can continue to benefit from the advantages of trade and of a free and open society here in Poland, in the European Union, and Worldwide. Dziękuję. Thank you for your kind attention. 7