Anders Ahnlid: The EU should step forward and launch a rules-based trade coalition

What should the EU do to take the lead in reviving the rules-based trading system? Anders Ahnlid shares his reflections. With long experience from various roles in the trade policy field, he is a strong advocate of evidence-based trade policy.

The Heckscher-Ohlin conference focuses on trade policy for a new era. What should be done to address the erosion of the rules-based trading system?

The best way for the EU to revive a rules-based trading system is to build new supporting structures together with like-minded partners. For this reason, the EU should step forward and launch a rules-based trade coalition.

To be successful, such a coalition would have to generate real commercial benefits. It should be compatible with and supportive of the WTO, but not formally part of it.

We are not alone in advocating this direction for EU trade policy. In June, President Ursula von der Leyen proposed closer cooperation between the EU and the members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Such cooperation would be an important step in the right direction.

How should the EU take the lead?

The EU and CPTPP members should form the core of the rules-based coalition. At the same time, it is important that the initiative remains open to other partners, provided they respect WTO rules and are committed to genuine trade integration.

Ideally, the coalition should consist of EU free trade agreement partners that are at the same time like-minded at the WTO. Such a coalition would represent more than half of world trade in goods.

What do you hope to achieve with this conference?

I hope the conference will help us carve out a more proactive strategy to address current trade challenges, which are among the most demanding our generation has faces. But this is not the first time we face uncertainty and calls for protectionism. The US introduced the Smooth-Hawley tariffs in 1930. Today, the Trump tariffs are creating havoc in the system. History does not repeat itself, but we must learn from it. Therefore, we must continue to make trade policy decisions based on solid evidence rather than overheated macho rhetoric.