On 3rd September, the Malta Business Bureau and the European Commission Representation Office in Malta organised a 1-hour webinar session on the EU’s trade and investment policy, as it is currently being reviewed, also to take into account the post COVID-19 recovery.
Peter Sandler, Director for Policy Coordination and Information in DG Trade, presented the Commission’s trade policy review, followed by the reactions of local authorities and business representatives.
The meeting was also attended by Malta Business, which enthusiastically welcomed the invitation to participate in a detailed consultation on some guidelines to pursue at European level for the economic recovery of Member States and our companies.
The consultation document outlining the European strategy is divided into the following key points.
Building more resilience: internal and external dimensions
The EU must pursue a model of “Open Strategic Autonomy”. This simply means strengthening the ability to pursue its interests independently and decisively, but continuing to work with partners around the world to provide the best solutions to global challenges. Europe must be strong and at the same time dialoguing, aware of its political and decision-making weight on the international scene, but also of the importance of working with other major players to address climate and environmental challenges, optimising opportunities arising from international trade but staying out of unfair competition and protecting our citizens, our businesses and our quality standards. Resilience, in short, means understanding our external dependencies while reducing our vulnerabilities through the right mix of international policies. In this sense it will be important to understand how to develop relations with China, a key partner but also a major trade rival, and how to support multilateral, plurilateral and rule-based bilateral trade through building mutually beneficial partnerships.
Supporting socio-economic recovery and growth
The Covid-19 crisis is expected to lead to a deep global recession with high levels of unemployment, increase in public debt, lower private investment (at least -30% decrease in global FDI) and the need for more extensive state intervention in the management of the economy. The risk is that all this will be translated into protectionist policies by the more advanced states, to the detriment of a global recovery and the hopes of developing countries. For this reason, some crisis response measures, which are justified in the short term, cannot become the “new normality” in terms of permanent state intervention. This requires international economic governance based on clear rules, reforming the World Trade Organization (WTO) and developing new and appropriate trade rules. Building on a network of trade agreements with 76 countries around the world, the EU must do more to help businesses, especially SMEs, to export and invest. Particular attention should be paid to partners closer to Europe, Asia and Africa. In addition to their geographical and geopolitical importance, these countries can offer a significant surplus in terms of growth and new opportunities.
SMEs, which are the backbone of the European economy, tend to face higher costs to enter into international trade, mainly due to the difficulties in accessing information on potential suppliers and business partners in third countries, as well as access to finance. The EU must adopt specific instruments and measures to support companies in exports by creating support desks and spaces for contact with the world. It is therefore necessary to strengthen trade policy at the service of SMEs and to promote awareness of opportunities and public procurement at international level.
Supporting the green transition and making trade more sustainable and responsible
The EU is a world leader in supporting sustainable development and combating climate change. Europe’s growth strategy should serve as a roadmap as part of the global recovery effort to facilitate the transition to an economy more compatible with the protection of the environment in which we live, both within our single market and worldwide, in particular by using instruments (multilateral, bilateral or unilateral) to promote a sustainable approach to development policies. For example, by facilitating green trade and investment to support the implementation of international standards, or by involving our trading partners on the need to address common challenges, such as sustainable fisheries or sustainable agricultural practices, human and labour rights, and gender equality. The Commission’s intention to make compliance with the Paris Agreement an essential element for all future global trade agreements.
Supporting the digital transition and technological development
The crisis at Covid-19 has accelerated the digital revolution: e-commerce, e-learning, teleworking, and electronic services have become fundamental elements of our society. Although we can go back in time in some areas, many changes will remain so forever. The EU recognizes the importance of digital commerce and its role in facilitating global trade, value chains, and the development of innovative products and services, while reaffirming the need for an effective framework for data privacy. These developments have led to the acceleration of the development of international standards for e-commerce, including for data flows. In addition, new technologies and changes in business models, particularly in the areas of artificial intelligence, blockchain and 3D printing – are affecting both what we trade and how we trade. The EU will continue to support these processes.