Long March to Lisbon

TRADING THOUGHTS - Business Standard Column
D Ravi Kanth / Geneva June 24, 2008, 0:26 IST
Success has many claimants. But failure, it is said, remains an orphan. The expanding ‘United States of Europe' now faces such a denouement following the Irish referendum against the Lisbon treaty. Leaders of the 27-member bloc scrambled to find a way forward from the legal and political mess that the recalcitrant Irish voters chose to create. The much-dubbed Lisbon blueprint — which took almost two years after the French and Dutch voters' rejection of the European Constitution in 2005 — would bring modest changes in the governance.
It envisages, for example, a full-time president to represent the EU governments. A foreign policy chief to articulate the European concerns at the global stage instead of 27 countries echoing their separate concerns. It provides more powers to the European Parliament which is often left behind by its powerful bureaucracy — the Commission — that invariably manages to have its way. The treaty changes members' voting weights but the subtle domination of the two superpowers in the EU — Germany and France — would continue in one form or the other.
The fate of these far-from-radical changes in the Lisbon rulebook is uncertain, even though the remaining eight members will go ahead with their ratification. It is more or less decided that the Irish government will be asked to take a second vote this year to keep the project alive. Given the requirement that all 27 would have to secure the parliament approval, the only exception being Ireland because of its constitutional requirement of a referendum, it remains to be seen whether the treaty can come into force in mid-2009.
Gone are the days when governments are in a position to muster support for initiatives which, they claim, will bring fundamental reforms. Whether it is the Irish voters now against the Lisbon treaty or the French and Dutch voters' rejection of the European Constitution in 2005, it is clear that there is an unbridgeable gap between what people perceive about these new initiatives and what the leaders package them as win-win outcomes for everybody's welfare. As it invariably happens with major failures, the Lisbon fiasco too generated ugly recriminations and finger-pointing.
The French President Nicholas Sarkozy held the controversial EU trade commissioner Peter Mandelson as a factor for the Irish debacle. "A child dies of starvation every 30 seconds and the Commission wanted to reduce European agriculture production by 21 per cent during World Trade Organization (WTO) talks. This was really-counter productive," said Sarkozy. Issues which contributed to the "no" vote included Irish concerns over "euthanasia, abortion and trade talks", he said. Then he mentioned the trade commissioner by name "Mandelson." "It would be highly unrealistic to keep wanting to negotiate a deal where we have not received anything on services, nothing on industry…. And which would cut farm output by 20 per cent while 800 million people are dying of hunger."
Such is the wrath against Mandelson, who is the main driving force behind the Doha trade negotiations at this juncture. Time and time again he is embroiled in one controversy or the other and Mandy-bashing in the British media is a commonplace. But, he ought to have anticipated the growing opposition among the EU member states to his negotiating proposals in the Doha talks. Along with the EU President Jose Manuel Borroso, he campaigned hard for the success of the Lisbon project in Ireland .
It is a different issue that Mandelson's very presence on the Irish soil would have generated massive resentment given the age-old rivalry with Britain. Ireland, like India , has enormous resentment with the Pax Britannica and it still lingers in the national psyche. Surely, it is bound to be a kiss of death if a former British politician has to preach about the strengths of the new European project in Ireland, and more so the trade commissioner, at a time when he is negotiating how much access he will provide for beef, pork and dairy projects to Brazil and others.
Indeed, Mandelson was repeatedly told about the difficulties encountered in the passage of treaty due to mounting opposition from the powerful Irish farmers to the Doha modalities agreement on agriculture, especially over the liberal market access provided to Brazilian frozen beef. Ahead of the referendum on June 12, a senior Irish official in Dublin told Business Standard that "farmers are particularly exercised by the EU's liberal offer on frozen beef to Brazil". The Irish agriculture rests on huge beef, meat and dairy industries which benefited over the years from the liberal farm subsidies running into tens of billion of dollars.
In a nutshell, the Irish vote did not just hamper the onward march of the Lisbon treaty. It has also made life difficult for Mandelson to pursue his passionate Doha project. He is under the microscope on what his team would do in Geneva in the coming weeks. With the French presidency of the European Union from July 1, the trade commissioner has few options and one of them is to go slow on Doha . If Europe can live without the Lisbon treaty for sometime to come, surely, heavens won't fall if Doha too is delayed!