Eu Redesigns Trade Policy Towards China
2021-02-18 | by CusiGO
Yes, but as much as possible. Brussels has developed its trade policy strategy to cope with fierce competition from the US and China, and to deploy its climate and digital agenda. After the geopolitical tensions of the past few years, the European Commission intends to be more “decisive” in drawing up a road map, the draft of which has been approved by all countries, including further measures to be taken when retaliation against “coercive action” is necessary.
The EU wants to maintain its position as a global trading power in order to formulate international trade rules in the next few years. In particular, after Donald Trump’s protectionist actions and the geopolitical tensions that Brussels has been complaining about Beijing’s bad art, especially as the EU sees how it is covered up by other countries, including the two giants, who are stepping on the gas out of the epidemic. “By 2024, 85% of global economic growth is expected to come from outside the EU,” the EU document said.
Joe Biden’s arrival at the White House was a big relief in Brussels. But in recent years, “growing unilateralism” has enabled Brussels to seek tools and ultimately act on its own. “In order to defend itself when other parties do not comply with the rules, the EU will take more tough and decisive measures. “We will strengthen our existing tools to defend our rights and values and prevent unfair trade practices,” Valdis dombrovskis, vice president for trade of the European Commission, told the Wall Street Journal.
The new strategy also tries to calm the mood of some EU partners, who are increasingly skeptical of trade agreements. These reluctance comes not only from France or Belgium, but also from Austria or the Netherlands, the natural heirs of the United Kingdom, flying the banner of free trade.
Last summer, the Dutch government pressed Brussels to close the Mercosur treaty, which the Dutch Parliament rejected. The Hague then signed a document with Paris asking EU Member States to fulfill their climate and labor commitments to avoid any unfair competition.
The epidemic will only exacerbate these fears. However, the Commission’s strategy did not meet the requirements of France, which has been advocating the resettlement of some activities in Europe. Brussels acknowledged that the epidemic had exposed some “vulnerabilities”, but said the supply chain had shown “significant resilience”.
The Commission’s strategy is based on a dual approach, cooperation and defense. According to the document, Biden’s arrival must help restore transatlantic relations, reform the World Trade Organization (WTO), which was blocked in the trump era, seek a global regulatory framework for digital trade, or establish a joint technical council between the United States and the European Union.
However, the trade wars of the 1960s and the obstacles faced by European companies in Asia called for a shield. Brussels wants tools to enable it to retaliate in the event of a partner breaking a promise or having to defend its company abroad.
Among other measures, the EU intends to conduct an in-depth audit of the supply chain, for example, to ensure that “forced labor” against China does not occur at any link. It also wants to use the mechanism it is deploying to analyse all foreign strategic asset investments and freeze them if necessary. It urged countries to establish a mechanism to ban companies from third countries from entering competitive bids from European companies. In addition, the document points out that export credit will be reviewed and two new “legal instruments” will be announced, one to protect the EU from coercive actions and the other to stop distortions caused by European subsidy companies.