Online Extra: A Talk With Europe's Trade Czar

Peter Mandelson says his mission is to open up markets, to liberalize trade, particularly between the EU and the U.S.

When the new European Commision President Jose Manuel Barroso chose his team last fall, he handed a key job, Trade Commissioner, to Peter Mandelson. It's not hard to figure out why. As a well-placed Brit, Mandelson had a head start on establishing good working relations with Washington. He also had considerable trade experience under his belt, having held the Trade & Industry portfolio in Tony Blair's Cabinet.

So far it looks like Barroso's choice is paying off. Mandelson has earned plaudits on both sides of the Atlantic for negotiating at least a temporary truce in the air war between Boeing (BA ) and Airbus. After returning from Brussels on Jan. 18 from the launch of the new Airbus A380 superjumbo passenger jet in Toulouse, France, Mandelson talked to BusinessWeek London Bureau Chief Stanley Reed. Edited excerpts from their conversation follow:

Q: Why is the Airbus A380 launch so important?


It has been an extraordinary day in two senses. The 380 is a very practical example of what European nations can do when they combine their strength. No single European nation would ever have had the capacity to invest in and produce such a large-scale aircraft.

[The A380] also sends a message to the rest of the world that we are not just a continent with a great past but with a 21st century future in manufacturing as well as services.

Q: What is your agenda as Trade Commissioner?


I don't believe that there is any further grand project like creating a single market for Europe or currency enlargement of the EU on the radar. Our job is to make what exists work better. That's a big project in itself.

In part what we have to contribute to is Europe's ability to raise its game to boost its competitiveness. To see off huge challenges posed to Europe not only by the U.S. but by the emerging economic powers, notably China and India, and as a result turn the corner on growth and jobs and stem or reverse relative economic decline.

My contribution as Trade Commissioner is to open up markets, to liberalize trade so as to create business opportunities for European enterprises in both manufacturing and services. My main priority is the Doha trade round -- the multilateral talks which offer the greatest chance all around for creating the market opening and trade liberalization which is essential for Europe to grow.

Q: What about the transatlantic relationship?


It's the world's biggest trading relationship. It's also almost 98% dispute-free. I don't think people necessarily realize that. In my view there's even greater potential through better regulatory convergence and removal of many nontariff barriers to trade. I'm eager to take that agenda forward and [work on] a menu of measures and actions that the U.S. and EU can take together to pull down those barriers.

Q: What about the Airbus/Boeing situation?


You need to see our agreement to negotiate on aircraft in the context of our relationship as a whole. We have enough to worry about without fueling an unnecessary trade war. It would have cast a pall over our relations.

Q: Are you optimistic about a solution?


It won't be easy. We face some very difficult negotiations. Our goal is to eliminate all subsidies -- short of that we must have the basis for fair competition between Boeing and Airbus with mutually agreed allowable nonmarket investment. I'm optimistic because I'm an optimist. I'm also determined not to underestimate the difficulties. I see a real chance to do some good both on this issue and as a contribution to wider transatlantic relations which I take very seriously.

Q: As a Brit do you see yourself as an agent for reform of the EU?


I was one of the architects of New Labour's view of Europe. We called it at the time Pro-Europe and in Europe, Pro-Reform. Britain's national interest leads us to the heart of Europe and to play a leading role in Europe's development. I am a strong believer in the European Union and European integration.

This is something the U.S. has supprted, and I hope it will do so again. I think the axis of right-wing anti-Europeans on the British right and some neo-con thinkers is a baleful influence operating against the interests of both America and Britain.

I'm a strong supporter of Barroso, and what he is doing with his presidency. I am not alone. I would say the EU Commision is overwhelmingly reformist in outlook. You'll see that in the policy direction and statements that will emerge from the commision at the end of this month.

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