EU warns Trump: Trade barriers and building walls ‘doomed to fail’

President Donald Trump

The European trade commissioner has said US president Donald Trump’s trade policies are “doomed to fail”, and that the EU remains committed to open borders and economies.

Cecilia Malmstrom said most countries still share the same vision of open trade and investments.

She said that “building a wall is not the answer”, adding: “The success of the EU relies on our open societies.”

Ms Malmstrom said: “Those who in the 21st century think that we can become great again by rebuilding borders, re-imposing trade barriers, restricting people’s freedom to move – they are doomed to fail.”

Mr Trump’s decision to pull out of the Trans-Pacific Partnership on Monday has been widely regarded as an indicator of a more enclosed US trade policy.

Ms Malmstrom’s speech at the Bruegel think tank was the most comprehensive and scathing EU reaction since Mr Trump was sworn in on Friday.

The US president has argued he is protecting domestic jobs by pulling out of the TPP agreement, which would have lowered barriers to trade between the Pacific countries.

Ms Malmstrom insisted the problem is an inability of economies to deal with evolution – in this case “automation, with machines and computers replacing manual work”.

She added: “Against this reality, trade deals are a handy scapegoat.”

The EU had wanted to seal a free trade deal with the US before ex-president Barack Obama left office.

Proponents said it would have added about €100 bn per year in output to each side.

“The election of Donald Trump seems likely to put our EU-US negotiations firmly in the freezer,” said Ms Malmstrom.

Instead, she said that the EU would now focus its efforts on deals with some other nations and trading blocs, including Japan, Mexico and the Mercosur South American trade group.

As Mr Trump has been talking about undoing Nafta, the North America free trade deal, the EU is on the verge of clinching an agreement with Canada. Both sides have already signed and the European Parliament is set to ratify it next month.

Ms Malmstrom said the alternative to such far-reaching agreements “is little short of catastrophic”.

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