Battle over unfair trade practices ends, its champion rejoices
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On Tuesday (12 March), the European Parliament approved long-awaited legislation on unfair trade practices (UTPs). MEPs backed it with 589 votes in favour, 72 against and nine abstentions. EURACTIV.com spoke with the lawmaker who shepherded the new rules over the line.
The lack of anti-UTPs rules was one of the major backlogs of the entire EU legal framework on foodstuffs, as 20 member states had in the meantime already adopted their own legislation on the topic.
The new directive aims to redress the imbalances in the EU food supply chain created by large operators against trading partners with weak bargaining power – which is why many lawmakers compared the and result to the biblical story of David and Goliath.
And it was rapporteur Paolo De Castro (S&D) who fired the slingshot.
The socialist MEP made no attempt to hide his satisfaction for having completed in eight months a political file going on since the first resolution of the Parliament called for measures to tackle UTPs in 2010.
“The immediate benefits of the UTPs directive in the food sector concern, first of all, the extension at the EU level of a minimum basis of protection from these practices,” De Castro said.
But it also has a multiplier effect on the effectiveness of the rules for member states like France, Spain and the UK, which have already implemented forms of anti-UTPs law in their national legislation.
“A French farmer who exported to Germany and who suffered an unfair practice had no protection. Today, however, the directive gives him the same protection he has in France,” he said.
The directive also eliminates the interpretation risks about what is and what is not considered an unfair practice, by setting up a fixed list of 16 UTPs.
“There is a substantial legal difference than in the past because now the national authority called upon to rule on a potential UTPs case must no longer find out if the alleged practice is unfair, but just if the supplier who had suffered that practice has a trade relationship with those who committed it,” the MEP explained.
De Castro sees no risk regarding implementation of the directive in the member states.
“The directive is written and must be applied exactly as it is written, so there are no major challenges in this regard. National laws that go beyond directives will not have any problem continuing to go beyond them,” he said.
For instance, France now has a much broader list of unfair practices than the one set out in the directive, but both national and European rules will be integrated easily, according to De Castro.
“But it was important to make a qualitative leap in those countries where national rules were not working, like in Italy, or in the eight countries that had no legislation at all,” he said.
The true challenge for the implementation is more time-related, but De Castro expected national parliaments to transpose the directive within two years.
De Castro has already dealt with thorny legislative dossiers, as he was the negotiator for the last Common Agricultural Policy (CAP) but also the so-called Omnibus regulation, a set of technical improvements to the CAP.
However, it was the first time he confronted the retail and wholesale sectors in Europe, represented by EuroCommerce.
“The large retailers lobby was very tough and effective,” De Castro admitted, adding that the whole experience was challenging because he had to deal with interlocutors other than the farmer associations and cooperatives to which he was accustomed.
“I noticed some ministers for agriculture, particularly in the Council’s Special Committee on Agriculture (SCA), having troubles in getting down to business,” he said.
Spaniards and Italians were braver, according to De Castro, but also the British, who remained committed to the procedure, despite Brexit.
“What aroused my curiosity was seeing the French government, in principle strongly in favour of the UTPs, barely getting the floor during the meeting,” he said.
But the retail lobby was able to land a few punches as well, even in the Parliament, as they sent a letter to the presidents of the parliamentary groups asking for a postponement of the vote on entering into negotiations with EU ministers in October.
“I was impressed that 170 MEPs voted against – mark well: they did not abstain – entering into negotiations. We reached all the same an overwhelming majority with 428 votes, but it was significant,” he admitted.