Our first #CambreTalksTrade virtual debate looked at trade after COVID-19. In the discussion moderated by MLex senior trade correspondent Joanna Sopinska, Anna-Michelle Asimakopoulou, Vice-Chair of the European Parliament’s Committee on International Trade, Peter Sandler, Director for Policy Coordination at the European Commission’s DG TRADE, Shada Islam, Director of Policy, Friends of Europe and Luisa Santos, Deputy Director General at BusinessEurope gave their views on the future of trade.
Stay on course in stormy waters
The outlook is gloom and doom for global trade, with protectionist measures around the world, enormous problems in logistics, even inside the EU, and the acceleration of dangerous trends like the ineffectiveness of the WTO, increasing decoupling and polarisation between the US and China, and acts of trade war increasing, fuelled by revamped nationalisms.
Responses have however been strong and faster than in the past. Recovery plans are kicking off worldwide, and there seems to be an ambitious momentum to revive cooperation, notably by the EU. Digitisation has shown its potential, with countless businesses staying afloat thanks to e-commerce, and an unprecedented perspective for sectors like e-health, e-learning and remote services ahead. The lesson should be that we need more international cooperation, despite protectionist instincts and knee-jerk reactions. We need to stay our course and transition into a greener and digital industrial revolution, by reviewing and harnessing synergies with competition and industrial policies, as well as remaining geopolitically the champions of multilateralism, notably to make the WTO fit for this new world.
Better rules, healthier global supply chains
For all the talk about reshoring, near-shoring, subsidies and a renewed role of the state, the truth is that we need to adapt our rules to all of this. Digitisation and the green economy can be the pillars of the recovery, but we need effective rules to take decisions about what is strategic, where the money goes and how to make sure it goes where it is needed.
- The EU is committed to its FTAs, as the recovery – wherever it will be happening – needs to be interconnected. The EU can be at the centre of this global network, with market access but also strong standards for socio-economic and environmental objectives.
- Supply chains can be shortened, diversified or made more resilient, companies can be guided with investment and financing, but all this needs to happen in the market, based on economically led choices. We don’t need to up-end all global supply chains if some sensitivities appeared, when we can work on production levels. The key here is a clear snapshot of integrated supply chains, to allow for tailored solutions for diverse sectors and business models.
- This will work only if it works across the board, for the whole economy. This means that if SMEs need special attention, then we need to earmark money, simplify procedures to get it and work with the banking sector to ensure it is spent well. And if we are digitising the economy, we need trade-savvy rules for the digital world, from privacy and cybersecurity, to AI and free flows of data.
The egg of Columbus: cooperation and communication
Complexity needs to be dealt with constructively, rather than confronted with zero-sum games. We need to maintain what we have in Europe, which is a lot, instead of trying to take back from others. The message must be clear: we need trade for this global recovery. And it cannot come in only from the EU. Leaders at WTO and national level should say globalisation is not dead. Regionalism is not a taboo, but needs to happen in a framework of cooperation, between regional organisations, not in competition between states. An organisation like the EU should have the ambition to lead this effort. The first opportunity is at the WTO, where we should agree with partners on a new Director General who can harness this momentum.
This opportunity to see the commonalities and really take global leaps is a great one but it will only materialise if we can tell the new story of Europe and trade. The EU needs to speak to everyone, be bold in the world – for instance, with stronger trade defences – but use its power wisely. We need to show that the Green Deal is not an excuse to be protectionist. Trade needs to be made more concrete for countries, companies and consumers because the message around its benefits is not trickling down. Business need to raise awareness of how what they do, the jobs they give to their employees depend on trade. Community mobilisation should happen at all levels. Otherwise, loud minorities will keep setting the tone and the agenda.
The EU is about to consult on its next trade strategy. This is the chance to all talk the same trade language.