In an interview with Borderlex, the European Parliament’s international trade committee chief Bernd Lange explains what he hopes to achieve before the European elections next year.
“I worked for this,” Bernd Lange said, referring to the German Social Democratic Party’s decision in January to enter into formal coalition negotiations with Chancellor Angela Merkel’s Christian Democrats.
Many observers believe the left-of-centre’s party’s participation in the previous German government enhanced the influence of the SPD in the European Parliament and was crucial in tipping the EU towards making crucial changes in its commercial policy, including shifting away from international investment arbitration in trade agreements.
The SPD faced a bruising defeat in the general elections last September after four years of being Merkel’s junior coalition partner. Martin Schulz, who had quit his post as president of the parliament to fight the German election, vowed to remain in opposition this time around.
Fending off the right-wing populists
Merkel failed to clinch a deal with the liberal Free Democratic Party and the Greens. And in the face of the surge of the far-right party AfD in the polls, the SPD leadership had to think again, lest Germany be forced to call new elections.
After difficult internal consultations on the basis of a 28-page scoping paper with Merkel’s CDU that stood out for the concession the centre-right party gave to the SPD on eurozone issues, the SPD grassroots gave its green light to formal coalition talks. The 56% majority that the party’s leadership obtained during a convention held in Bonn indicates how divided Germany’s centre-left is.
“It was a very tough party convention,” Lange told Borderlex. “From a European perspective I think [the coalition] is really necessary. The result on the European part of the talks we had with the CDU was really good.”
Lange is also pleased with the language included in the scoping paper that calls for “free and fair trade” and reiterates Germany’s commitment to the EU’s plans to establish formal courts to resolve disputes between international investors and host governments.
Lange played a pivotal role in ensuring the EU ditches international arbitration – also known as ISDS – in its commercial policy. During the height of the German and European popular and NGO uproar against the trans-Atlantic TTIP negotiations, a statement often heard from Lange was: “ISDS is dead.”
Lange moved on to play an important role in brokering a new model investment chapter that was included in the trade deal with Canada, the CETA.
The German MEP doesn’t want to stop there.
There’s another major change in the EU’s trade policy that Lange wants to see through this year: make breaches of labour and environmental commitments in trade agreements subject to sanctions.
“We need an enforcement [mechanism] for the CETA agreement,” he said. “The Canadian side is ready. Member states are ready to go towards a sanctions-based approach. I am convinced that we will get an enforcement [mechanism] in this chapter.”
Lange wants it “not the American way with trade sanctions after quite a complicated procedure. It has to be more focused on the concrete violation and more in the direction of a compensation”. He sees possible payments to worker or trade unions, or remedial action for the environment as a possible solution.
“When you have a society where there are fears about globalisation which leading to right-wing populist parties and so on, business should have an interest in fair trade relations due to the fact that trade is influenced by security of workers, is influenced by proper taxes, is influenced by anti-corruption,” the former student of divinity believes.
In the months ahead, Lange will be seeking to consolidate recent gains to increase transparency in trade policy.
Calls for transparency in negotiations increased during the TTIP and CETA negotiations. The European Commission has significantly increased transparency. It went as far as to decide to publish draft free trade agreement negotiating mandates. Lange was very involved in the setup of the TTIP ‘reading room’ in the European Parliament. But he isn’t quite happy yet. “We got a lot. There is no doubt about that,” he said. “Now I am in negotiations with the Council and the commission to try to give this [level] of transparency to all committees.”
China focus
The trade committee chairman is also preoccupied by two main questions: How to deal with China and the future of the World Trade Organization.
Lange is squarely supporting nascent EU legislation on investment screening at union level in response to fears about Chinese control of strategic assets in the EU.
An initial compromise text tabled by the commission late last year is still in the early stages of drafting. The focus is on cooperation and an exchange of information between member states. The commission would look into EU-level projects its finances via entities such as the European Investment Bank.
The legislation is about sending a message to Beijing, according to Lange. “It’s part of the game,” he says. “We wanted to have reciprocity for investment with China. We have been in 19 rounds of negotiations with China about an investment agreement. If this agreement doesn’t happen, then of course we have to set up a stronger version of such an investment screening legislation. But for the moment, it’s a political signal.”
China is front and centre in the minds of the German automotive industry and especially Volkswagen. Lange represents the constituency of Wolfsburg, where VW is headquartered. The carrmaker is still grappling with the aftermath of revelations about CO2 emissions cheating – and is now facing new recriminations about its animal-testing practices. A debate in Germany has emerged over the cosy relationship between the auto industry and the political class.
“Volkswagen has a big responsibility due to ‘Dieselgate’. There is a big mistrust towards the car industry,” Lange said. “They should give more to their customers and the authorities and try to offer some more compensation for this manipulation.”
The next big challenge for the German auto industry is to make the leap towards electric cars. China plays a major role in enabling this – or not. “Competition with China is very high,” said Lange. “But the growth of the automotive sector is in Asia, especially in China. Half of the cars sold by Volkswagen are sold in China.” Chinese measures such as a quota on imports of e-cars preoccupy Lange.
Trade policy for the German MEP is thus also about securing the future of automotive related jobs in Lower Saxony. “We have to promote jobs in this sector. With the populist movement, we have to stabilise workplaces and the perspective for the people.” What Lange terms “fair trade agreements” are among the policies required to do so.
Lange was clearly disappointed with the World Trade Organization’s Buenos Aires ministerial conference. “I was disappointed that the Parliamentary Conference on the WTO was not able to give input to MC11. I think that should be the role of parliaments.”
The parliament’s trade grandee is gearing up activity on WTO issues, and promises “concrete proposals on the way forward to the system” in the coming months. “We need to try to phase in [new] items and create agreements which are linked to the capacity of the partner,” he believes.
Another go?
The career politician clearly enjoys his job. Chairing the international trade committee, which involves intensive international contacts, has opened new perspectives, Lange confesses. The veteran MEP also confesses to not enjoying the internal political wrangling he needs to steer as chairman and compromise broker.
“The more boring and disappointing parts of the game is the internal bit. You are responsible for the different internal negotiations. There are contacts with the other committees. [One needs to] negotiate with Council and commission on procedural questions, on information and access to documents, sometimes with little improvement.”
That doesn’t stop Lange from considering giving another go at INTA chairmanship, if the political conditions permit it next year. “My job is a wonderful job. In the European Parliament there are chairs who stayed on as a chair,” he said, adding that he believes he will be re-elected. His SPD party is leading in the polls in Lower Saxony.
Lange more generally exudes confidence. Asked if he expects to meet his goal of making trade and sustainable provisions in FTAs subject to sanctionable enforcement procedures, the answer is a short and emphatic “yes.”
The German social democrat is ranked 11th in Vote Watch’s list of most influential MEPs. Lange studied theology and politics is a former teacher. He has been an MEP since 1994.
