Portrayed by his opponent Marine le Pen as the arch-globalist, Emmanuel Macron will enter the Élysée as the advocate of a long-standing protectionist idea, a Buy European Act. First advocated in 1993 by the then minister for European affairs, the Socialist Elisabeth Guigou, it was taken up by Nicolas Sarkozy in his presidential campaign of 2012 and has been promoted in the European Parliament by another centre-right French politician, Frank Proust. The preponderance of French people proposing a buy European policy reflects the protectionist tradition in that country’s post-war politics. That Macron should advocate it is in that sense unsurprising, but it also points to the limits of his liberalism. And with it comes a warning: an EU without the UK could move away from an open trading policy to a protectionist one.
The idea of a Buy European Act was partly a reaction to Buy American provisions in the US. The oldest dates from 1933 and was part of the protectionist measures that helped to turn the Wall Street Crash into the Great Depression. It is still in force and requires the federal government and its agencies to buy US-made goods; similar laws exist in many US states. The law was extended in 1982 so that 100% of any iron and steel used in transport projects is US-made – a reaction by Congress to the decline of the US steel industry. But the notion that the 400,000 jobs lost in that industry since the 1960s is due to competition from overseas is false. The major cause of the decline of the sector is changes in steel production methods.
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For critics of globalisation, the facts don’t matter. President Trump announced an executive order in March requiring US-made steel to be used in infrastructure projects – in effect an extension of the 1982 provision concerning transport projects.
Macron’s policy has similarities to Trump’s; he wants to restrict public procurement contracts to companies that have at least half their production within the EU. The British media has seen this as an anti-British gesture that will punish the UK for Brexit, but it is really companies from Asia that are Macron’s target because he thinks that they are unfairly dumping goods in the EU.
The proposal is already under fire from critics in the EU like Commission Vice-President for Trade Jyrki Katainen, who has said that EU companies do not need this kind of protection. He could have added that Macron’s proposal would probably be illegal under the World Trade Organisation’s Global Procurement Agreement (GPA), to which the EU acceded in 2014.
The GPA, then, ought to protect UK companies in the unlikely event that Macron were to get his way, but the bigger issue is the loss of British influence over EU trade policy. The UK has long been a force within the EU pushing for an open, outward-facing Europe that promotes free trade and competition. The UK’s departure from the EU will strengthen the hand of the protectionists and weaken that of the liberals; another bad Brexit outcome which will lower growth and reduce jobs.
Edited by Alan Wheatley
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