Speech at the Enterprise Greece Webinar on “World trade and protectionism in the post-COVID era”

“The European Union has set “Open Strategic Autonomy” as the guiding principal to ensure supply diversification and resilience, while continuing to champion multilateral, free and value-based trade.”

Read the speech below.

Ladies and Gentlemen,

I am honoured to have been invited by Enterprise Greek to talk about Trade and Protectionism in the post Covid-19 era today.  

Thank you Mr. Dimitriadis for the invitation and your kind words of introduction.

Since March 2019, the COVID-19 pandemic has forced us to stop and re-evaluate interconnections in the global economy. The political environment has seen the escalation of calls for protectionism, economic nationalism, and the rejection of global multilateral institutions.

It is important to highlight that, international trade has been essential to our response to the pandemic, supplying vital medical equipment, pharmaceutical ingredients and foodstuff across Europe.

70 years ago, Robert Schuman united Europe on a convincing path towards peace and prosperity. The Schuman Declaration of 1950 brought Europeans together around the need to manage critical resources like steel and coal, then the two locomotives of the economy.

Almost three quarters of a century later, his words are more relevant than ever as international trade remains central to Europe’s recovery from COVID-19 and to its future prosperity.

We built our Union on the premise that trade is a joint way forward, that it brings nations closer together. We created a Single Market to stimulate economic growth across Europe, to improve the quality and availability of goods and services, and to reduce prices for consumers.

And so, with the Single Market we became a major trade power in the international arena, committed to international cooperation and multilateralism through our engagement in the GATT and in the WTO.

 International trade is an exclusive EU competence and a driving force of development for the European economy.

Too often, people perceive trade as something “abstract”, rather than a positive force for prosperity which supports 1 in 7 jobs in the EU. EU exports to the world support 36 million jobs across Europe and generate €2.3 trillion of value added in the EU.

I am pleased to see that Enterprise Greece is a leader in promoting the benefits of international trade and European initiatives, such as “market access days” and is encouraging vigorous participation in the Trade Policy Review currently underway with the deadline extended by VP Dombrovskis to November 15. I hope that we will soon be able to hold a discussion on this in the Hellenic Parliament’s Committee on European Affairs with the Commissioner and his staff.

The Commission has announced the launch of a new “Access2Market portal” to facilitate the usage by SMEs of the EU’s trade agreements. SMEs represent 99% of all European businesses yet only 25% export to another country. I think this new portal will be a most useful tool to help with the extensive work that Enterprise Greece is doing to involve SMEs in Greece in taking advantage of our trade agreements.

Ladies and Gentlemen, in a world of increasing instances of unfair trade practices, where multilateral trade rules are being openly questioned, the European Union has set “Open Strategic Autonomy” as the guiding principal to ensure supply diversification and resilience, while continuing to champion multilateral, free and value-based trade.

European Open Strategic Autonomy is the context within which the European Union is reviewing and expanding its international trade policy.

It sets the Union’s priorities: 1) We have to remain open to the world; 2) We need to strengthen our strategic capabilities; and 3) We have to secure autonomy in our decision-making.

Please allow me to focus on these points in turn.

1. “Open”

Open Strategic Autonomy is “Open” to emphasise that the European Union is not closing in on itself or turning to “protectionism”.

Openness is vital for our future economic prospects, especially given that 85% of global growth will take place outside Europe in the next 10 years.

In Jacques Delors’ words, “it would be absurd for the largest exporter in the world [the EU] to close its frontiers to foreign products… Europe would be the first victim of [this] mounting protectionism”.

The European People’s Party, my political family at the European level, is committed to openness. In our view, the multilateral trading system embodied in the WTO remains by far the best framework for achieving free, fair, and rules-based trade on a global basis.

Nevertheless, we remain pragmatic. The current standstill in international trade negotiations at the WTO requires that the European Union seek bilateral trade agreements to foster economic growth.

The European Union is already at the heart of the most comprehensive global network of trade deals comprising of over 40 agreements with more than 71 countries.

These agreements are key to reaping the benefits of global economic growth while also ensuring the diversification of our supply chains to strengthen our strategic autonomy.

In that sense, the current trade negotiations with Australia, New Zealand, Mexico, ASEAN countries, and even Mercosur, fall into this geopolitical objective. Our openness supports strategic autonomy, hence our post COVID-19 recovery.

In the European Parliament’s committee on International Trade, where I am Vice-Chair, we started our work in this legislative term by ratifying the EU-Vietnam Trade Agreements and now we have just supported the EU-US lobster deal.

Open Strategic Autonomy also acknowledges that we must be more assertive in enforcing our rights and defending ourselves against unfair trade practices by third countries.

Again, the European Parliament’s committee on International Trade is at the forefront of this. We are currently revising the EU’s Enforcement Regulation since in its current form it is not equipped to deal with the WTO Appellate Body crisis, which ceased to function because the United States blocked the appointment of new adjudicators.

 In the Enforcement Regulation review, we are pushing for the adoption of instruments to allow the European Union to react swiftly in the event of a unilateral, illegal trade measure taken against it.

We are directly negotiating strengthening our enforcement toolbox with the newly appointed Chief Trade Enforcement Officer. There are already 350,000 jobs protected by EU trade defence measures and we are hoping to increase this number with our new tools.

And so, the European Union also looks at the issues of level-playing field, including with the United Kingdom which is a particularly difficult negotiation, and that means notably introducing rules on foreign subsidies in the Single Market.

Again, this is about “protection” not “protectionism”, a necessary safeguard against our “systemic rival” China, which engages in unfair trade practices with its state-owned enterprises and massive subsidies to strategic sectors such as steel and aluminium.

2. “Strategic”

Open Strategic Autonomy is “Strategic” as it focuses on defending our industrial leadership.

If we want to achieve the green and digital transitions, the European Union will need a solid industrial base, and resilient and sustainable supply chains.

The COVID-19 pandemic has demonstrated that the European Union is reliant on third countries for raw materials and it has also expedited our digital transition.

For example, China provides 98% and 93% of the EU’s supply for rare earth elements and magnesium, which are key to climate neutrality and digital leadership.

The EU has the means to build its strategic autonomy in the raw materials sector. For instance, with the necessary investment, Greece, which already supplies 12% of the EU’s Bauxite, could increase Europe’s overall supply of Bauxite by 1/3.

The European Union is taking important steps with its Action Plan on Critical Raw Materials towards an EU industrial strategy that reinforces our open strategic autonomy. Nonetheless, Strategic Autonomy goes far beyond raw materials sourcing: it is also required throughout value chains, from upstream to downstream.

We also have to develop a more coherent European approach to digital infrastructure deployment and developing new technologies. This is about Europe’s digital sovereignty, a crucial aspect of Open Strategic Autonomy.

5G wireless networks represent a strategic pillar of socio-economic development. The timely and secure rollout of 5G will create significant demand from our industry and will amplify European innovation and competitiveness.

The European Commission’s investment of 8 billion euros in supercomputers and microprocessors is also a key factor for our digital transition and international competitiveness.

Greece has made “leaps and bounds” in its digital transition during the pandemic and is now in a position to attract substantial foreign investment in the digital sector, as demonstrated by Microsoft’s plan to invest up to $1bn to build data centres in Greece, an important “vote of confidence” in the Greek economy.

3. “Autonomy”

Open Strategic Autonomy is about the “autonomy” to focus on pursuing our geopolitical objectives.

Autonomy, or «αυτονομία» in Greek, comes from the words αὐτός (autós, “self”) and νόμος (nómos, “law”). It literally means being free to make your own rules. In fact, it is your right to be able to make your own rules. These rules in Europe are based on commonly shared values: democracy, the rule of law, and respect for human rights.

Now more than ever, it is clear that we must be particularly vigilant in order to safeguard these rules.

Autonomy becomes a strength when built upon the resilience and diversification of our strategic value chains and on our global network of trade partners.

Without autonomy, we are at risk of becoming a ‘playground’ for “systemic rivals” in a world dominated by geo-economics and power politics.

We have no time to waste in pursuing these objectives.

In conclusion, trade has been at the heart of the European project and today’s crisis is an opportunity to unite European nations once again, this time around the goal of Open Strategic Autonomy.

Jacques Delors knew that in “in the midst of an ever-changing world order, uncertainty and insecurity take over, but it would be a grave error to sacrifice [trade] development for a temporary sense of stability”.

Open Strategic Autonomy, which builds on our strengths, is the European Union’s response to this global uncertainty. It is our collective way forward.

Full press release here.