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An expensive reversal

For the second time in three years and amid violent protests by trade unions in Strasbourg, the European Parliament recently vetoed by four to one the European Union (EU) draft directive to allow competition among the continent's ports. The rejection of the proposal — conceived by the European Commission (EC) as part of the Lisbon Agenda to make Europe the world's most competitive economy by 2010 — reflects yet again the growing opposition to the so-called market-oriented reform of the Union's social model, a movement that has succeeded in blocking many major initiatives, including a Constitution, since the EU's largest-ever enlargement of 2004. While the setback on the ports directive could stall efforts to create a single market in services in the 25 member-states, the Parliament's vote is yet another instance of the Brussels-based EC's remoteness from popular sentiment in different countries on key European issues. This is especially true in the case of resistance to the current directive which envisages an end to the monopoly enjoyed by Europe's mostly state-owned seaports in discharging functions such as cargo-handling, pilotage, and towing of ships. Even though the more controversial move to privatise pilotage services was dropped from the revised version, the proposals nevertheless came under fresh attack from the Committee for Consumer Protection and the Committee for Employment and Social Affairs which questioned the terms of competition for different service providers. The ire of trade unions over the move to facilitate self-handling of cargo by vessel crews, rather than dockworkers, endangering jobs and social safety had forced Parliament to put the original proposal on hold in 2003.

Exhibiting a familiar divergence of perceptions on economic reforms among interest groups, European importers and exporters have welcomed the cost-cutting liberalisation package for the port sector which, according to the EC, handles more than 90 per cent of the bloc's trade with third countries, and around 30 per cent of intra-EU traffic, besides over 200 million passengers every year. Conversely, dockworkers' unions have steadfastly resisted the new measure, calling it a ploy for "social dumping" and a race to the bottom in terms of labour and technical standards, even though they have benefited from increased traffic across ports owing to a surge in European exports. The response within member-states to the emergence of the single market in the EU has been lukewarm when it has threatened to break monopolies and favourable where it has opened access to new markets. To the extent that opposition has already coalesced against a law to liberalise EU markets in the services sector — which is said to account for two-thirds of the Union's GDP — Parliament's vote on the measure in February could prove another costly reversal of the Lisbon Agenda.

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