A plebiscite on Chirac

Written by Malcolm Subhan | Updated: May 31 2005, 05:30am hrs
The European Union (EU) is alive and kicking. The clearest proof of this is to be found in the long and heated debate which preceded Sundays referendum in France on a constitution for the 25-nation EU. Although the French rejected the constitution by a clear majority, Frances continued membership of the EU was not called into question. But the referendum was also, and perhaps even primarily, a plebiscite on Frances political leadershipits President, Jacques Chirac, and Prime Minister, Jean-Pierre Raffarin. A leader of the French Socialist Party, which supported the constitution, even claimed on television that Europe was unjustly held responsible for the crisis in France.

The immediate outcome of the French rejection will be a complete overhaul of the government in Paris. President Chirac promised as much, as soon as it was clear that the constitutions opponents had triumphed. But he also made it clear that France will defend its national interests in the EU.

India could well be the first victim of the protectionist wave that swept aside the constitution. The EUs trade supremo, Peter Mandelson, had proposed that Indian textiles and clothing be included in the EUs revised generalised system of preferences (GSP) scheme. But as many as 13 EU countries, led by France, were against the proposal.

With the French already pressing the EU to impose quotas on imports of Chinese textiles and clothing, it was decided to wait until the referendum was over before returning to the issue of GSP treatment for Indian textiles and clothing. Given its outcome, French demands that India be excluded are likely to become even more strident.

The EU will have to decide one way or the other shortly, since the revised GSP scheme must come into operation by July 1, at the latest. This follows a WTO ruling in favour of India, which had challenged the EUs decision to grant Pakistan additional GSP benefits because of its fight against drug trafficking. Pakistan, however, is seen as less of a threat and will enjoy GSP treatment for its exports of textiles and clothing under the revised GSP scheme.

China can also expect a considerable hardening of EU policy. In order to help the French government win Sundays referendum, the EU agreed to take emergency action last week against Chinese exports of T-shirts and flax yarn, even though the EU imported four times as many T-shirts from Turkey than from China last year, while its imports of Chinese flax yarn accounted for well under 1% of the total.

EU trade policy is decided in Brussels, of course, and its chief trade negotiator, as regards the WTO trade negotiations, for example, is Peter Mandelson. Just how successful France is in pushing for a more protectionist trade policy will depend, therefore, on countries like Britain and Germany. Their determined opposition could thwart French efforts.

Much of the French opposition to the constitution was due in fact to the belief that it embodies the free market economics espoused by Britain, Germany and the Scandinavian countries. France can be expected, therefore, to press for policies designed to create a Fortress Europe, aimed at keeping out not only imports but also immigrantsand the baneful influence of Hollywood.

The outcome of the French referendum will be felt in the field of foreign policy, too. Indeed, it can be argued that France cannot block the EUs economic integration indefinitely, given that the key decisions, as regards the creation of a single market and a single currency, the euro, have already been taken. However, failure to adopt the constitution will mean that the EU will not have its own foreign minister.

Frances rejection of the constitution will clearly have an effect on the outcome of the referendum in the Netherlands on Wednesday. Ironically, its Dutch opponents may decide to stay at home, given that the Constitution must be approved by all 25 EU countries if it is to come into force. Supporters of the constitution insist the ratification process must continue. They point out that if 20 EU countries have ratified it by November 2006, all 25 countries must meet to decide on what to do as regards the difficulties facing any of the others.

So far, nine EU countriesthey include Germany, Italy and Spain, and together account for nearly half the EUs total populationhave ratified the constitution. To stop the ratification process now would amount to giving in to minority rule.

The writer, a freelance journalist, is based in Brussels