Let us not confine global trade

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Coronavirus calls for a sustainable recovery effort. [Photo: Shutterstock]

COVID-19 has stalled economies in the EU and the world, revealing vulnerabilities and shortcomings in global value chains. We need a resilient and sustainable European recovery by fostering sustainable and digital industrial ecosystems that diversify trade, stimulate sustainable growth and create jobs, write Reyes Maroto and Simon Kollerup.

Reyes Maroto is Spain’s minister for industry, trade and tourism. Simon Kollerup is the minister for industry, business and financial affairs of Denmark.

The COVID-19 crisis has raised fundamental questions about Europe’s dependence on third countries in certain key value chains and rightfully the need to foster industrial ecosystems of strategic importance for Europe’s resilience in crisis.

To this end, we support a sustainable and digital industrial policy that enables European companies to become world leaders in clean, low-emission and digital technologies stimulating long-term competitiveness and creating jobs both now and in the future.

At the same time, we should remind ourselves that global value chains and global trade are important for value generation by European companies and the prosperity they produce. In focusing our European efforts in the times ahead, global value chains should not be dismantled but rather further diversified in order to become more robust – also in times of crisis.

The single market was a response to long-standing slow growth after the oil crisis, which created inflation and, as a result, unemployment. A common response was needed then and is needed again after the COVID-19 crisis.

The Single Market makes the EU the most important legislator in the world, as it provides an incentive to achieve the same standards globally in order to trade with the world’s largest trading block. We have seen European standards and hence values spreading globally within areas such as chemicals and data protection.

As such, the Single Market is the cornerstone of the European project and we should now accelerate the development of a true, barrier-free, open and fair Single Market that will allow companies to scale across borders and innovate in a large home market, regardless of sector.

This should be based on sound economic principles and values that have served European citizens well. Ensuring the effective functioning of a true, barrier-free, open and fair Single Market, avoiding its fragmentation in times of crisis, is a prerequisite for the European Union to contribute to the maintenance of open, fair and sustainable global supply chains.

The latter will only be achieved if the EU’s single market is deepened and preserved in future crises.

It is evident that major crises in Europe have always called for changes, and the COVID-19 crisis is no different. But we cannot ignore that the pandemic has shown us that the world is intimately connected.

We believe that breaking with world trade is not the answer to ensuring European competitiveness or resilience. Instead, Europe should use its economic and regulatory muscles to make trade fairer, sustainable and digital, both within and outside the EU.

The European industry is working around the clock to ensure supply to our health sector and economy in general.

We owe it to our companies to continue coordinating efforts by the EU and the member states to ensure open, fair and sustainable trade and efficient while resilient supply chains in the EU and beyond.

We should foster security for companies all over Europe, notably SMEs, by creating more and fairer opportunities for them to sell their products to the European market and to global markets.

Therefore, let us not confine trade but instead do it differently by focusing more on enabling trade with green and sustainable solutions and unleash the potential of digital and sustainable trade to support the European industry. In this respect, the EU must support its companies through facilitating comprehensive, inclusive and sustainable trade agreements.

This implies increasing efforts to concluding ongoing trade negotiations with third countries such as New Zealand and Australia as well as finalise procedures for the signing and ratification of concluded trade accords, such as the agreements with Mercosur and Mexico.

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