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In brief
Trade is one of the main sources of our country's wealth and prosperity. To illustrate, Belgian exports account for more than 90% of our GDP, and one in three jobs in Belgium depend on exports. As a small, open economy, Belgium therefore has every interest in ensuring smooth international trade and investment flows. A dynamic trade policy that eliminates trade barriers, creates a level playing field for our companies, contributes to the green and digital transformation, and promotes universal values such as human rights is essential for Belgium. Some key trade policy objectives are:
- to open up external markets to foster growth and job creation, in Belgium and elsewhere;
- to facilitate the introduction of global trade rules and to enforce those rules;
- to contribute to the green and digital transformation;
- to integrate developing countries into the global trading system;
- to support sustainable growth with respect for environmental and social standards;
- competitiveness and economic security.
Objectives for Belgium
The creation of the EU Trade Policy
The common trade policy is an exclusive competence of the European Union. Before being allowed to negotiate agreements with third countries, the Commission must be authorised by the Council of the EU on the basis of directives, usually in the form of a mandate. The mandate provides the framework for the Commission to conduct its negotiations. This means that it is the Ministers of the Member States who decide to open negotiations and under what conditions. The European Commission then conducts these negotiations in consultation with the Trade Policy Committee (TPC), in which the 27 EU Member States are represented. The Commission keeps the European Parliament, specifically the International Trade Committee, immediately and fully informed, primarily through the Parliament's International Trade Committee.
For Belgium, the Directorate-general European Affairs and Coordination (DGE) is charged with preparing, defining, coordinating, representing, defending and monitoring European policy. The DGE prepares the Belgian decision-making process so that our country can speak with one voice and defend its interests in the EU Council. This is done on a weekly basis through consultation and coordination between the competent federal and federated bodies. In addition, the DGE assists the Minister in charge in clarifying the coordinated Belgian position through responses to parliamentary questions. Furthermore, the DGE is in contact with experts, disseminates information to diplomatic posts, maintains bilateral contacts with the European Commission and builds alliances of interest with other European delegations.
Work tracks
The EU approach to trade policy is multi-faceted. First of all, the EU and Belgium are pursuing a multilateral approach, where global trade rules are negotiated and agreed upon. This approach maximises the trade opportunities of our companies, ensures a level playing field around the world and also promotes the integration of developing countries into international trade, which remains a key concern of both Belgium and the EU.
The EU and Belgium are strongly committed to the smooth functioning of the multilateral trading system based on the World Trade Organization (WTO). For Belgium, it remains vital that the WTO be able to fulfil its three key roles by acting as a forum for trade negotiations, a guardian of international trade rules and an arbiter of trade disputes.
However, a reform of the World Trade Organization is urgently needed. For decades, multilateral trade rules, overseen by the WTO and enforced through an impartial dispute resolution system, have helped reduce trade tensions and prevent trade wars. Yet the WTO is failing to adapt to (r)evolutions in international trade. The WTO is subject to inflexible procedures and conflicting interests among its members, which prevents rules from being modernised. The WTO's role as an oversight body is also threatened by a lack of transparency of many countries. Since December 2019, the Appellate Body of the WTO dispute settlement mechanism has been in paralysis. Although the European Union has since played a key role in the creation of an interim multiparty arbitration arrangement to defend the rights of the parties in ongoing and future disputes, a definitive solution has yet to be found.
The situation is further complicated by recent examples of unilateral measures that are incompatible with WTO rules, some of which have already resulted in countermeasures. These developments represent a major risk for the EU and Belgium, with an economy whose imports and exports both depend heavily on predictable, fair, rules-based international trade. Belgium therefore supports the EU initiatives to reform the WTO to make it ready for the challenges of this century (digitalisation, greening, sustainable development, etc.). Our country is working with the European Commission and the other EU Member States to take another step in this reform at the 14th WTO Ministerial Conference.
In the meantime, as multilateral negotiations have been difficult in recent years, and especially as those in the context of the WTO have stalled, the EU, in its efforts to further promote international trade, is applying a pragmatic approach as a driver for growth and jobs. Thus, it is negotiating plurilateral agreements and is increasingly turning to regional and bilateral free trade agreements, an exception to the Most Favoured Nation (MFN) principle that is explicitly accepted in the WTO rules.
Plurilateral agreements under the WTO are aimed at cooperation between different countries that share common interests and ambitions. In most cases, these are the consequence of a failure to reach a multilateral agreement with all WTO countries. Belgium welcomes the completion of the negotiations on digital trade (E-commerce Joint Statement Initiative) and investment facilitation (Investment Facilitation for Development Joint Statement Initiative). Belgium hopes these agreements can also enter into force soon.
In addition to negotiations at the multilateral level, the European Union conducts various regional and bilateral negotiations. For example, over the past five years, the EU has completed a raft of negotiations, leading to the entry into force of trade agreements with key partners such as Japan (2019), Singapore (2019), Vietnam (2020) and the United Kingdom (2021). Recently, agreements with New Zealand (2024) and Kenya (2024) were added to this list. An agreement with Chile is in the final stages of approval by Chile. Furthermore, negotiations are ongoing with, among others, Australia, Philippines, India, Indonesia, Mercosur, Mexico, Tajikistan and Thailand. With all these agreements concluded in the last five years, almost half of EU trade takes place under preferential trade agreements.
During these regional and bilateral negotiations, Belgium actively advocates and defends its economic and strategic interests, such as significant tariff reductions, ambitious sustainable development provisions with a strong focus on climate and working conditions, as well as compliance with European Sanitary and Phytosanitary Standards (SPS) and protection of sensitive (agricultural) interests.
In its regional and bilateral negotiations with developing countries, the EU adopts an asymmetric approach, meaning that the EU provides benefits that it does not ask in return from these countries. This can be done, among other things, within the framework of negotiating Economic Partnership Agreements (EPA), or within the Generalised Scheme of Preferences (GSP), which lies at the heart of the development dimension of European trade policy, under which the European Union unilaterally offers preferential market access to developing countries (and even a quasi-exclusive tariff exemption to least developed countries under the 'Everything But Arms' initiative).
However, negotiations alone are not enough. The agreements must also be implemented and enforced. That is why the European Union has the necessary trade defence instruments in place, such as anti-dumping, anti-subsidy and safeguard measures. The Commission reports annually on the use of these tools. Our country also supports the strengthening of autonomous legislative instruments aimed at creating a level playing field. These 'traditional' instruments have been further complemented in recent years by new instruments, such as the Enforcement Regulation, the International Public Procurement Instrument and the Anti-Coercion Instrument.
Finally, Belgium's trade policy aims to respond to the shift in free trade agreement negotiations, with increasing economic security needs given the volatile geopolitical context. In other words, the further expansion of the bilateral trade network must be complemented by a stronger focus on economic security. Belgium wants to continue to implement the EU's economic security strategy. This strategy focuses on three pillars: promote, protect and form partnerships. The strategy's main trade-related measures are trade protection measures, notably FDI screening, export controls, trade sanctions, anti-dumping instruments and instruments to address technology leaks. With respect to these measures, Belgium also advocates a pragmatic approach. In particular, a sustainable balance must be struck between the needs of free trade (openness) and those of economic security (assertiveness). Sectors should be divided into critical, strategic and sensitive sectors, with specific policies for each.
Horizontal, thematic priorities of Belgium
The Belgian trade agenda supports open, sustainable and assertive policy that is in line with central EU policy developments, including the Green Deal.
Promoting sustainable development through trade policy is a key principle for Belgium. Ambitious, balanced and binding chapters on sustainable development are an essential part of trade agreements for our country. Belgium seeks to further expand and strengthen these chapters in the negotiation of new agreements and draws particular attention to their effective implementation. Belgium also calls for greater participation of civil society (for example, through domestic advisory groups) in monitoring mechanisms for the implementation of commitments. The aim is not merely to prevent trade from having a negative impact on sustainable development, but also for trade to contribute to positive developments in terms of the environment and the protection of human rights and labour.
Belgium attaches importance not only to the negotiation of new trade agreements but also to the meticulous monitoring of trade agreements that have already entered into force. The European Commission's annual reports on the implementation and enforcement of European trade policy illustrate the concrete benefits of agreements in force. For example, Belgian exports to Canada have increased 55% since CETA, to more than 4 billion euros in 2023. In 2023, thanks to trade agreements, our partners saved more than two billion euros in import tariffs when purchasing Belgian products, which testifies to their fundamental importance for the competitiveness of our companies. In addition, proper monitoring also ensures that commitments in agreements are properly followed, including those in trade and sustainable development as discussed above.
Furthermore, Belgium and the EU are continuing the reform process of international investment protection. For example, the EU has developed a new approach to the resolution of investment disputes called the Investment Court System (ICS). This system is incorporated into bilateral EU trade agreements (e.g. in CETA and the investment protection agreements with Singapore and Vietnam). ICS makes it possible to build a global coalition through trade policy, which could eventually create a multilateral investment court. To achieve this, negotiations are currently underway in the United Nations Commission on International Trade Law (UNCITRAL WG III). The goal of the EU and its Member States is to establish a permanent tribunal, called Multilateral Investment Court (MIC), to settle investment disputes, making a radical break from the current ad hoc arbitration system. As Belgium is still a member of UNCITRAL until 2025, it will continue its efforts to support this multilateral reform project.
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