On February 18th 2021, the European Commission published its European Trade Strategy which aims at strengthening the EU’s trade policy to prepare for the world of 2030. The Strategy is built around the principle of achieving an “open strategic autonomy” which will allow the EU to make its own choices and shape the world around it in line with its values and interests. Three main objectives are entailed: 1) resilience and competitiveness to strengthen the EU’s economy; 2) sustainability and fairness, reflecting the need for responsible and fair EU action and; 3) assertiveness and rules-based cooperation to showcase the EU’s preference for international cooperation and dialogue.
Resilience and competitiveness
Trade openness was identified as key in expanding the range of alternative sources of supply when faced with an unprecedented rise in demand, and the EU intends to reinforce its cooperation with other countries and with the private sector to expand production and to support equitable access to vaccines. However, the combination of an exponential increase in demand for certain health-related critical products and supply shortages (due to lockdown or restrictive measures) has exposed some vulnerabilities in the health sector. The Commission’s work on identifying strategic dependencies will provide the basis for defining the necessary policy responses and for engagement with the industry, which has an essential role to play in assessing risks and solutions. To strengthen resilience and support the competitiveness of its various economic sectors, the EU will need to ensure open and undistorted access to international markets.
Sustainability and fairness
One key element of the EU’s Trade Strategy will be to ensure that global institutions support global economic recovery, decent jobs, sustainable development and the green transition. To that end, it will pursue the reform of the World Trade Organization to modernize its rules and functioning and restore the dispute settlement system. It will also seek to reinforce its engagement with neighbouring countries and Africa by notably pursuing sustainable investment agreements with them. Finally, it will also look at supporting the Trade and Healthcare Initiative at WTO-level, in line with the proposal included in the Pharmaceutical Strategy.
Assertiveness and rules-based cooperation
To keep its status as a global norm-setter, the EU will seek to strengthen its regulatory impact by identifying strategic areas on which international regulatory cooperation should focus. It identifies the United States as a key partner for this objective and reiterates its willingness to create an EU-US Trade and Technology Council.
Finally, a critical element of the EU’s “Open Strategic Autonomy” will be its trade agreements, with the Commission looking to unlock the benefits of these agreements while countering protectionist tendencies and distortions to EU exports through the recently appointed Chief Trade Enforcement Office.