Trade opportunities in the European Union
Free Trade Europa will be adopting their EU Manifesto in September. This will set our ideas for the policy direction the European Union should take during the 2019-24 legislative cycle. This manifesto will cover five main themes:
- Environmental Stewardship
- Free Trade
- Democracy & Openness
- EU Single Market
- Embracing Technology & Innovation
As the new European Parliament has been elected—and the new European Commission are set to take their seats in November—it is an ideal time to look at where the trade opportunities exist in Europe and where more needs to be done. The European Union (EU) represents the largest economy in the world at USD 20 trillion, and its rules and regulations set precedents internationally.
Within the EU there is a need to sharpen industry’s competitive edge, particularly in light of an uncertain economic climate. Services represent one key area where great strides could be taken. EU legislation exists on services markets, but this needs updating and is currently too weak and too restricted. Studies show that by creating a true EU Single Market for Services (including professional services and public service procurement) we could add USD 430 billion to the EU economy. This represents 2.3% of the overall EU GDP.
Similarly, the EU Single Market needs to fully encompass the digital reality of the economy. Facilitating, while protecting, the flow of data is the lifeblood of the new economy in the technology age. Removing barriers to a functioning EU Digital Single Market is crucial and should be top of the agenda for incoming EU politicians and policy-makers. The reform of the eCommerce Directive and further regulation facilitating the transfer and treatment of data will be required in addition to the General Data Protection Regulation.
The EU is also planning a new industrial policy, ostensibly to raise the competitiveness of EU companies against the background of a tariff-wielding U.S. and a more commercially aggressive China. This approach raises serious concerns. There is a tendency for EU countries (led by France and Germany) to pick winners and try and create national/European champions. This approach must be resisted. Creating European (or national) champions wastes resources and ensures that consumers and other businesses lose out. The lack of competition often leads to higher prices, less choice, and poorer products due to a lack of innovation.
Similarly, new EU foreign investment screening legislation will come into force in October 2020. There is a risk that this may allow for political meddling and arbitrary bans on certain forms of trade and investment. The EU needs to show that it is open for business, and not take a too restrictive stance here.
Company contact details:
Phone: 0046 708 935037