EU trade chief quells business fears of heightened economic protectionism

2 months ago 14

The European Union’s growing emphasis on economic security will not undermine the fundamental openness of Europe’s economy, the EU’s top trade official said on Tuesday (2 July) to reassure the business community.

Speaking at an event organised by Brussels-based lobby group BusinessEurope, Trade Commissioner Valdis Dombrovskis said that the EU executive’s recent push to coordinate export controls and enhance screenings of inbound foreign direct investment, among other “protective” measures, does not mean that Europe is sliding towards full-blown economic protectionism.

“Europe is traditionally a trading continent and is going to stay so,” Dombrovskis said, adding that the free exchange of goods is crucial to preserve the bloc’s access to critical raw materials and to allow European firms to “attain economies of scale”.

The Commissioner also said that he “fully” supported the lobby group’s recent call for policymakers to strike a “balance” between the three pillars of the EU’s Economic Security Strategy – which aims to promote competitiveness and partner with “like-minded” countries while protecting economic security.

Dombrovskis said it was “very important… to ensure that any actions we take will safeguard the equilibrium between the three pillars.”

The remarks came as BusinessEurope’s Director General Markus Beyrer reiterated that EU efforts to shore up security should not impact the bloc’s faltering competitiveness, saying, “We must be very careful that this doesn’t lead to disguised protectionism.”

“There’s a very clear red line to be drawn in between these two points,” Beyrer said.

Dombrovkis, who also serves as the Commission’s executive vice president, expressed similar support for the industry association’s proposal for a “dedicated structural exchange platform” on economic security. This platform would group together EU officials, academic researchers, public authorities, and members of the private sector.

“I would personally support the creation of such a platform,” the top EU official said, adding that the decision would ultimately be up to his successor.

A former Latvian prime minister recently nominated by his home country for a third term as commissioner, Dombrovskis is widely rumoured to desire an economics-only portfolio in the next mandate.

Dombrovkis also stressed that economic security would always be tied to “ensuring a level playing field” in matters of international trade, saying the recent spate of EU investigations targeting China’s subsidisation of green technologies was conducted solely for this reason.

“When we discuss trade protection, it’s important to distinguish between ensuring a level playing field and economic security implications,” he said.

Provisional tariffs on electric vehicles produced in China announced last month by the EU will take effect this Thursday if no deal is reached.

A Commission trade spokesperson confirmed to Euractiv that “the two sides will continue to engage at all levels in the coming weeks” to reach an agreement.

[Edited by Anna Brunetti/Alice Taylor]