This week’s think tank publication highlights include another set of new pieces by the European Council on Foreign Relations and a think piece from the Peterson Economics for International Trade.
ECFR: The EU’s missing strategic technology control instrument
“To breathe life into its economic security strategy, the EU should adopt a strategic technology control instrument” argue Tobias Gehrke and Julian Ringhof in a new piece responding to the new EU initiative unveiled this week.
“Such a tool would allow the bloc to impose union-wide technology export restrictions in cases where European economic security interests are under threat and cannot be adequately addressed through existing tools” the authors write.
Such an instrument would help the EU in not simply having to respond to the actions of other major powers but to act as a first mover.
The strategic technology control instrument – which is not quite the same as the fairly modest export control list update the commission announced this week – would allow the trading bloc to intervene in cases where where critical technology exports contribute to a strategic dependency or could compromise the EU’s technology advantage.
The EU must act now to secure its position in the global technological landscape, the authors say. It should also work toward strengthening its competitiveness in this field to buttress its geo-economic strength.
ECFR: EU-GCC green trade liberalisation for resilient supply chains
To build resilient green supply chains, the EU should start talks with the Gulf States to discuss a preferential trade agreement for decarbonisation and the circular economy argues Cinzia Bianco a visiting fellow at the European Council on Foreign Relations.
Bianco’s policy paper argues that “a specific agreement to liberalise trade on products and services linked to the green transition would have multiple economic benefits and should face fewer political obstacles.”
Additionally, “it could increase the advantage of “Made in the EU” technologies for desalination, hydrogen, CCUS, or even energy-efficient household appliances. It could also encourage European investment in mining, which GCC policymakers” writes Bianco.
The EU would also be wise to look towards the Gulf States as a source of raw materials while remaining vigilant about safeguarding and forced labour.
PIIE: Fear not decoupling, fear dismissal of the rule of law
The turbulent relations between China and the United States, are not resulting in a broad decoupling nor is it causing a trend toward a divided world with two trading blocs. China and the United States’ lack of support and adherence to the multilateral trading regime is the real danger.
This is the gist of a new paper published by the Peterson Institute for International Economics’s Alan Wolff, entitled Discarding a Utopian Vision for a World Divided: The Effect of Geopolitical Rivalry on the World Trading System
Over the last three-quarters global economic prosperity has largely been the result of the rule of law and ignoring the current structure could result in lower economic growth and fragmented trade.
The WTO must “be restored as the place where trade disputes are settled with finality, which means binding upon the parties to the litigation” writes Wolff.
WTO members also need to find a way legitimise open plurilateral agreements while providing transparency.
According to Wolff this depends on the WTO’s largest trading partners and would require the EU to prioritise WTO reform and focus less on its bilateral trade agenda.
The US would have to return to its leadership role in international economic policy and China would need to fulfill its commitment to assuring that market forces will be the main determinant of competitive outcomes.
Wolff finds no evidence to suggest that the two rival powers have a conscious plan to ignore the current trading system and it is possible that they are unaware of the spreading damaged caused by acting at cross purposes.
Ultimately, “multilateralism will be back because it makes the most economic sense” says Wolff.
