TRADE : * - TRADE DEFENCE STRATEGY DIVIDES THE 27.

At stake in what promises to be one of the thorniest issues facing the Slovenian EU Presidency - the reform of the Union's trade defence instruments (TDI) - is nothing less than the Union's strategy for coping with the economic challenges of globalisation. The reform of the TDI, to be presented by Trade Commissioner Peter Mandelson in January, deeply divides the 27. Ljubljana will have the difficult task of building a consensus. This seemingly technical matter of TDI reform in fact raises sensitive political questions capitals cannot fail to address.

The debate got under way in December 2006 when Mandelson proposed a modernisation of the EU's trade defence arsenal in a green paper. That was followed by a public consultation last spring to sound out stakeholders. Since then, the commissioner has been postponing the reform, which was supposed to be presented in 2007, and is finally ending up on the table as Slovenia takes up the reins of the EU. The launch window is narrow, because France, which will follow Slovenia in the Presidency seat in July, makes no secret of its misgivings over the commissioner's proposal, as did the previous Portuguese Presidency.

Mandelson, backed by the most liberal states like Britain, Sweden and Denmark, wants the TDI to take account of the new conditions prevailing in the globalised economy, where a growing share of production is being relocated to low-wage countries. To put it plainly, European businesses that keep only their 'noble' activities (research and marketing) on EU territory contribute to the competitiveness of the 'old...