Speech to the members of the Diplomatic Corps on the occasion of 11 July

Excellencies,

Dear guests,

On this eleventh of July 2018, we gather to celebrate the last Flanders Day before the important elections of May 2019. These elections at Flemish, Federal and EU level will come at a time when the world again finds itself at the crossroads of interlinked challenges. Globalisation has created openness and prosperity, but it has also made the world much more complex and complicated to understand as it has become more integrated and interdependent. Policy decisions taken in one country may seriously affect other states, regional blocks and indeed world trade.

Flanders is undeniably an example of a federated state that embraces global trade and depends on global trade to create growth and prosperity. The figures speak for themselves:

• In 2017, for the eighth consecutive year, Flanders exported goods and services for a new record amount of 317 billion euros.
• Today, Flanders ranks as the fifteenth export nation worldwide.
• This means one in three jobs in Flanders are dependent on international trade.

It goes without saying that Flanders, with its competitive, highly skilled, innovative and open economy is attractive to many investors. It is certainly one of the reasons why Flanders also hit a record high in 2017 in attracting over two billion euros in foreign direct investments, spread across 215 projects and creating 5.377 new jobs.

Flanders believes in open markets. A thorough ex-post evaluation of the impact of recently concluded EU trade agreements confirmed that these trade agreements effectively deliver growth and prosperity in Flanders. We are not afraid of competition because it keeps us on our toes. Free trade allows us to see what others are developing, what others getting up to and what they have in the pipeline.

We believe free trade drives innovation and forces us to continue investing in R&D, innovation and first rate education in Flanders. As I often say: alongside trade, our only other drivers for growth in Flanders are “human resources”. These resources sit between 1.5 and 2 metres in height.

For all of these reasons, Flanders remains a strong believer in free trade and a fierce supporter of the multilateral trading system. But, we are not naive free traders. In order to benefit everyone, free trade has to be played by the rules. The World Trade Organisation, with its unique features, such as the Trade Policy Review Mechanism and the Dispute Settlement Body has enabled us to uphold the rule of law and to avoid trade conflicts, which could otherwise only be settled by taking up arms. It goes without saying that the multilateral trading system is not perfect and an overhaul is undeniably needed. This implies that all partners around the table need to adopt a constructive stance. Let us modernise the World Trade Organisation together.

Flanders believes in the added value of the European Union. We have presented our Vision on the future of the European Union in which we speak out in favour of the EU, as the most important lever for Flanders’ Foreign and International Trade Policy.

No EU Member State is big enough to face global challenges on its own. As you will be aware, these challenges include:

• migration,
• climate change,
• financial stability,
• security and defence,
• the promotion of peace, the respect for the rule of law
• and respect for human rights.

The same goes for our international trade issues. This is also the reason why, in 1958, European Member States decided to assign exclusive power over trade-related issues to the European Union. An approach to trade that only looks at national elements is doomed to fail and could cause so much disruption that it could lead to conflict.

Which is why I am happy that the Council of the EU decided to make full use of the Singapore-Opinion of the European Court of Justice and split Free Trade Agreements and Investor Protection Agreements in future EU trade deals.

Not only does Flanders believe that trade should be ‘free’, it should also be ‘fair’. Throughout history, some have always believed trade imbalances can easily be corrected by taking unilateral action. However, unilateralism has invariably sparked counter-reactions and led to a negative spiral of retaliation. I wish to express Flanders’ concern at the unilateral actions taken by the United States of America, one of our best friends and a long-time ally. Not just for backtracking on the Paris Climate Agreement, but also for considering NAFTA and EU partners a threat to American ‘national security’. In the Flemish Parliament as well as in various bilateral meetings, I have consistently advocated a new Trans-Atlantic Partnership that includes ‘free’ and ‘fair’ trade.

Even in the current situation, I will continue to defend such a strong economic partnership with the United States. However, we do understand the concerns of President Trump.

We too note that some still believe that over-subsidising production and dumping goods on foreign markets can continue without having consequences.

Our trade rules therefore need to evolve so that all partners refrain from pursuing such policies.

But to do so, we need to work together and reinforce - not withdraw from - multilateral cooperation.

As such, Flanders supports the EU in its efforts to revitalise the World Trade Organisation (WTO):

• We must equip the World Trade Organisation with the tools to deal with modern trade.
• Developing modern trade rules and standards, and ensuring they are complied with, is essential to create a level playing field for our businesses.

This is why we also stand with the European Union to work with partners in different multilateral fora to deal with the problem of ‘overcapacity’ and the ‘infringements of intellectual property rights’.

We welcome the EU measures adopting modern trade defence instruments and implementing rebalancing measures against all illegal and WTO-inconsistent tariff increases.

Flanders is also actively involved in the initiative to work up a ‘European framework’, in which the EU and its Member States can exchange information to screen foreign investments in strategic sectors, with the aim of guaranteeing national security and public order whilst remaining firmly open for business.

To Flanders, it is crucial that we ‘protect without protectionism.’ This is why we also want to defend those countries that are less well equipped to reap the benefits of trade. My Government believes free trade agreements should help improve respect for human rights on the ground; supports the negotiation of ambitious sustainable development chapters in Free Trade Agreements and seeks to promote compliance with core international labour and environmental standards. There can be no lowering of standards through trade!

As an example of this sound approach, I am pleased that, just two weeks ago, the legal review of the EU-Vietnam trade deal was able to be finalised, with “clear commitments to respect human rights and International Labour Conventions” now agreed upon.

In addition to the new ‘Trade for All’ approach at EU level, Flanders is keen to serve as a pioneer in unlocking the full potential of the private sector for sustainable development:

• Only recently, Flanders Investment & Trade launched guidelines for businesses to work towards the United Nations Sustainable Development Goals;
• Building on these guidelines, I will organise a high-level conference on business and human rights in December of this year.

The aim of this conference will be to exchange best practices on the use of new technologies for greater transparency and respect for human rights across the entire supply chain. I hope you can also learn from our approach.

The best example so far of a modern trade agreement with an ambitious sustainable development chapter is CETA: the Comprehensive Economic and Trade Agreement between the EU and Canada.

It is for this reason, along with the mutual economic benefits CETA is set to generate, that I am proud the Flemish Parliament has already approved CETA. This is a very positive signal to Canada, our Canadian partners at the Provinces and Territories of Canada, and the 14 EU Member States which still need to finalise their ratification process. In this respect, I salute the Austrian EU Presidency that ratified CETA just one week ago. CETA is a state-of-the-art ‘free’ and ‘fair’ trade agreement and a model for other free trade agreements to come. This is why I am confident that the ratification of CETA is also of a more geostrategic importance. Ultimately, it is about upholding a free, fair and sustainable trade model.

We are hopeful we can now implement the other modern trade agreements with Japan, Singapore, Mexico and Vietnam as soon as possible:

• My encounters with the Vietnamese Prime Minister and the Ministers for Trade and Industry on my recent trade missions in Vietnam showed great willingness on both sides to proceed as soon as possible. As stated, the legal review has now been completed.
• We also hope to conclude the negotiations with MERCOSUR and Chile at the earliest possible time.
• Furthermore, we hope for swift negotiations with Australia and New Zealand, two countries with which Flanders maintains intense economic and historical ties.
• We also look forward to the negotiations between the EU and other ASEAN-parties and other countries.
• Last but not least, I am of course especially pleased that the EU-Japan Trade Agreement will be signed soon.

I would like to take this opportunity to express my sincere condolences and compassion with the Japanese people and the Government of Japan for the deaths and devastation suffered in the Hiroshima area in the wake of the heavy rains.

A recent global survey by one of the big four consultants among 1.300 CEOs shows that 55% percent of these captains of industry believe the threat of increased economic protectionism in the world is the biggest threat to the future growth of their business. In this respect, I would like to draw your attention to one particular issue, which is Brexit.

Historically, Flanders has always thrived when the UK thrived. We have a unique and cherished relationship with the UK. This relationship goes back to the Great War and the Royal Privilege of 1666 which granted fifty Bruges-based fishermen eternal access to British waters and even to the Battle of the Golden Spurs, the event that is the reason why we are celebrating ‘Flanders Day’ today.

Respecting the British vote in the Brexit referendum, we are obliged to redefine our relationship. This is not an easy task. The red lines of the UK Government do not allow for many options.

However, as in 1302, Flanders attaches great importance to its trade with the UK – which we are keen to continue with as little friction as could possibly be.

Flanders wants a trade-friendly Brexit which entails:

• an ambitious, deep and broad Free Trade Agreement
• a plus-treaty with close cooperation in as many policy areas as possible.

However, the clock is ticking and I sincerely hope the next 17 weeks will be used in good stead to arrive at a “smart” Brexit deal. In this respect, I would like to highlight the fact that it was at Flanders’ request that our country persuaded the European Council held on the twenty-eighth of June to clearly recall that “if the UK positions were to evolve, the Union will be prepared to reconsider its offer.”

I therefore welcome the UK Government’s comprehensive proposal of last Friday which moves towards the “trade-friendly” Brexit which the Government of Flanders is in favour of. We will analyse the much-awaited White Paper with great interest and assess whether the proposal is:

• future-proof,
• unambiguous,
• and allows for workable solutions for companies and ports.

Ultimately, Flanders is confident that - even after Brexit - the UK will continue to remain the EU’s most significant partner in defending a modernised multilateral trading system with respect for the rule of law and for international standards of protection, labour and the environment. After all, there is much more that unites us than divides us.

Please allow me to conclude by expressing my hope that we will overcome whatever causes turbulence between us and that we may reaffirm trust and stability between all partners. Flanders is and remains an open economy that wishes to engage constructively with all its partners. Flanders also knows from its own past that only together we can overcome great divides and international challenges.

Thank you very much for your attendance here today to celebrate Flanders Day with us. Please allow me to reach out to you to take my message of confidence in free and fair trade in multilateralism and in a constructive dialogue back to your capitals and organisations.