Multilateralism in Trade is ‘Dead’ Says French Industry Minister

January 10, 2013

Multilateral trade deals are “dead”, France’s industry minister said on Tuesday, professing a preference for bilateral accords as the 27-nation European Union and the United States prepare to begin talks on removing tariffs.

Arnaud Montebourg, an advocate of limited protectionism in trade and industrial policy, said deals involving several nations were impossible to broker today because competing national interests could not be squared.

“Multilateralism is dead,” he told a lunch with foreign journalists in Paris. “We prefer bilateral deals … because it’s not possible to find rules that are suitable to everyone, with each requiring the right to a veto.”

An attempt at a global trade agreement, called the Doha Round, began in 2001 but broke down in 2008 over disagreements on issues including agriculture, services and intellectual property between the West and emerging markets.

The latest call for a broad deal is from British Prime Minister David Cameron, who has urged the European Union and the United States to broker a free trade deal. U.S. and EU officials have told Reuters talks will begin in mid-2013.

The goal of such an agreement would be to stimulate economic growth in the United States and the European Union, which together account for nearly a third of world trade.

Montebourg said France and the United States both wanted to protect their industries against “unfair” competition. But he said he disagreed with the method by which the European Union negotiated on behalf of its member states, without elaborating or saying explicitly that he opposed a deal.

Montebourg also criticized the World Trade Organization (WTO), headed by fellow Frenchman and Socialist Pascal Lamy, saying its decision to admit China had produced negative economic effects.

France is attempting to narrow its trade deficit, which on Tuesday reached its lowest level since late-2010.

To rebalance trade with China, Montebourg said Europe needed a currency that made its exports more attractive, closer to the U.S. dollar than the former German unit, the Deutsche Mark.

Beijing had to be pressed to allow its currency to appreciate, he added.

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