European Commission vice president Jyrki Katainen: There is untapped trade potential between GCC and Europe

Key EC official says investment is a critical issue for boosting regional economies and the global economy.

European Commission vice president Jyrki Katainen arrives in the UAE on Sunday. Emmanuel Dunand / AFP

European Commission vice president Jyrki Katainen spoke to The National ahead of his visit to the UAE this week as the EC and GCC prepare to launch a new trade and investment dialogue.

What potential role do Arabian Gulf states have in your investment plan for Europe?

The Investment Plan for Europe brings together several elements to boost investment in key areas for Europe’s future. This targets priorities such as renewable energy, research and development, and enabling our smaller companies to scale up and engage on the global scale. We are keen to ensure that Gulf companies are able to invest in Europe, through these projects or others, and also that European companies are able to invest in this part of the world. The GCC is our fourth largest export market, and we believe there is huge untapped potential for further trade links. This is why I am very pleased that in May this year, we are launching together the EU-GCC trade and investment dialogue.

You were recently quoted saying there must be a “balanced solution which maximises the benefits and minimises the unwanted consequences” of free movement rules. Has Brexit demonstrated that the free movement of people threatens the cohesion of Europe and may need to be addressed?

Negotiations about the UK’s exit from the EU have not yet started so we cannot speculate about the outcome. As soon as Article 50 has been triggered, we will launch negotiations regarding the terms and conditions of its withdrawal, in line with the European Council guidelines. The “four freedoms”, as we call them – free movement of goods, of people, of capital and of services – are indivisible as fundamental principles of the EU and our Single Market.

Does Britain outside the EU underscore the need to accelerate defence spending and do you expect the British defence sector to be part of post-Brexit negotiations – ie that Britain could participate in EU defence in return for more favourable access to EU markets?

Within the EU, we are currently discussing how to take forwards a new European Defence Action Plan to boost the security and competitiveness of our defence sector. The proposed measures include a “research window” to take our defence research forwards with dedicated EU funds, and a “capability window” to support joint initiatives within Europe. We are also looking at strengthening the European Single Market for defence by making procurement more open and competitive. The changing security context means we need to accelerate this collaboration.

Does the election of Donald Trump in the US and the vote to leave Europe by Britain represent any kind of lesson for the EU?

The future of Europe cannot be judged by looking at the USA or the UK. While we need to understand what is going in other parts of the world, I think we need to focus less on comments from outside Europe and more on what Europe is actually doing. We are delivering an ambitious agenda of reform, and that is our current focus. The EU is a collaboration based on shared values – democracy, human rights and the rule of law. The challenges we face as Europe have changed over the 60 years of our existence, and will no doubt change again.

Is establishing a new trade deal with the US a priority?

The EU wants to have a good working relationship with the president [Trump] and his team to see how we can take forward the work done so far. We can build on a lot of the work already done through the TTIP talks. We are currently engaged in the negotiation of almost 20 regional and bilateral trade agreements with different partners across the globe.

Why should Arabian Gulf investors put their money in such a low growth region?

We are the largest Single Market in the world, with consistent and transparent rules and regulation, and we are continually working to strengthen this further. We are the biggest export market for around 80 countries. What we can offer investors is a stable and predictable environment for investment. We are the largest inward and outward investor and this will not change even after Brexit. We are determined to make the EU an even better place to invest. I am here to understand from our Gulf partners what they are looking for.

What is the biggest current threat to European competitiveness?

The traditional world of work is changing. Preparing our young people currently at school for this dynamic world is, I think, the greatest challenge we currently face. We are committed to investing in the skills of our young people to prepare them for the world around the corner. This means not only hard, technical skills, but the softer skills to help them adapt to changing environment — in a word, resilience.

What should your response be to the rise of populism in Europe?

I see in the rise of populism not just in Europe but globally as a call for national governments and European institutions to pay more attention to globalisation. Globalisation has been a huge gain to European and many other societies, but we must acknowledge that some people have seen the costs but not the benefits.

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