A new Agenda for Trade and Investment...autonomy: priorities for action” that runs throughout 2020...

June2020

ExecutivesummaryWithaviewtogrowingprotectionismandgeo-economiccompetition,compoundedbyeconomicrecessionandgeopoliticaltensionsfollowingtheCOVID-19crisis,theEUshouldfosteritscapacitytoactmorestrategicallyandmoreautonomously.FosteringstrategicautonomyisessentialtoadvancingEurope’sinterestsandreinforcingEuropeansovereignty.Aspartofthiseffort,theEUshouldmakemoreactiveuseofitstradeandinvestmentpolicies.Thatrequiresbracingfortradeshocksandunfairtradepractices,empoweringEuropebyleveragingitsSingleMarket,andengaginginternationallytoupholdrules-basedtradeandastableinternationalorder.ThispaperarguesthatinfosteringstrategicautonomytheEUshould,first,strengthenandmoderniseitstradedefenceinstrumentswhileensuringtheviabilityofthetemporaryappealarrangementsetuptocopewiththeblockageoftheWTOAppellateBody.Second,theEUshouldensurealevelplayingfieldforallcompanieswithintheSingleMarket,ensurereciprocityinmarketaccess,screenFDIsmorestrategicallyattheEUlevel,andbetterenforceitsfreetradeagreements–includingsustainability.Finally,theEUshouldcontinuetoengageinternationally,moderniseitsnetworksofFTAs,andre-centreitstradepolicyaroundfewertoppriorities.Inshort,strategicautonomyshouldnotleadtodisengagementandisolation,ratheritshouldbeaboutbuildingastrongerpositionforcooperationandpartnership.TradeandinvestmentpoliciesareonlyoneoftheseveraltoolsthatshouldbemobilisedattheEUleveltofacecompetitionandpromotecooperationinapost-COVIDworld.Ultimately,Europe’sstrategicautonomyagendacallsforamuchbroaderapproach,includingindustrialpolicies,technologyandinnovation,andsecurityanddefence.ThesearethemainbuildingblocksofasovereignEurope–onethatcanshapeitsfuture.

FosteringEurope’sStrategicAutonomy

AnewAgendaforTradeandInvestmentJohanBjerkem

FosteringEurope’sStrategicAutonomyTRADE&INVESTMENT June2020 2 2IntroductionOpentradeandglobalisationareincreasinglyperceivedasmakingcountriesmorevulnerabletoglobalchallengesandcrises.TheCOVID-19pandemichasreinforcedpre-existingscepticismonthecostsandrisksofinterdependence.Whenfacedwithacrisis,statestendtoturninward.Unfortunately,thisisalltoovisiblewiththeimpactofCOVID-19:intimesofhardship,thenation-statebecomesapolitical,economicandemotionalfallbackformany.1Inthefirststagesofthehealthcrisis,severalcountriesaroundtheworldtookunilateralmeasurestolimittradeingoodsandservices.Somecountriesadoptedexportbans–includingtemporarybansonmedicalequipmentbyEUmemberstates–whileothersarecallingforvaluechainstomovebackhome.Still,thecurrentpandemichasmadethedependenceofnationaleconomiesonglobalvaluechainspainfullyclear,withkeyindustriesaffectedbyshortagesordisruptionsofsupplies.Heightenedawarenessoftheseriskswilllikelyleadtoeffortstoreducevulnerabilities,howeverensuringthatmeasurestoenhancenationalresiliencedonotunnecessarilyundercutthebenefitsthateconomicinterdependencecanbringisanimportantconsideration.Thisfitsabroadertrendwhichreflectsmultipleconcernswithtradeandinvestmentflows.Forone,evenifexpertswidelyrecognisethemeritsoffreetradeinboostingaggregategrowth,thebenefitshavenotbeendistributedequallyacrossregions,countriesandsocialgroups.For

1Rachman,Gideon(2020),Nationalismisasideeffectofcoronavirus,FinancialTimeshttps://www.ft.com/content/644fd920-6cea-11ea-9bca-bf503995cd6f2EuropeanCentralBank(2018),ECBEconomicBulletin,Issue3,Frankfurt,p.21-25.https://www.ecb.europa.eu/pub/pdf/ecbu/eb201803.en.pdf3Gunnella,VanessaandLuciaQuaglietti(2019),“Theeconomicimplicationsofrisingprotectionism:aeuroareaandglobalperspective”,ECBEconomicBulletin,Issue3,p.40-62.https://www.ecb.europa.eu/pub/pdf/ecbu/eb201903.en.pdf4Ibid.

another,tradeandinvestmenthaveincreasinglybecometoolsofthefirstresortwithingeo-economiccompetition.Countriesmobiliseeconomicmeansforpoliticalendsthrough,forexample,unilateraltariffs,exportbans,subsidiesandmeasureslimitingmarketaccess.Tradebarriershavesteadilyincreasedinrecentyears,evenbeforetheCOVID-19crisis.2AccordingtotheEuropeanCentralBank(ECB),thenumberofnewtraderestrictionsannouncedbyG20economieshasrisensharplysince2012andpeakedin2018and2019.3Thishasbeenthecasefornotonlyimporttariffsandanti-dumpingmeasures,butalsoindirectmeasureslikestateloanstoexportingcompanies.4Inits2019annualreport,theWorldTradeOrganization(WTO)concludedthattraderestrictionsbyitsmemberscontinueatanall-timehigh.5Theserestrictionsareestimatedtohavecostthetradeingoods$747billionin2019–themostsignificantsince2012–andincreased27%fromthepreviousyear.6InarecentTradeandInvestmentBarriersReport,theEuropeanCommissionpointsoutthatEuropefacesarecordnumber(i.e.425)ofactivetradeandinvestmentbarriersin59countries.7Forthefirsttime,Chinatopsthelistofrecordedbarriers,followedbyRussia,India,IndonesiaandtheUS.8Allinall,thisleadstogreatertradeuncertaintyandaweakeningofglobalgrowth.9ThemultilateraltradingsystemandtheWTO,whichwassetuptocombattariffsandtraderestrictions,iscurrentlyincrisis.TheUShastakenanothersteptodisengagefromtrademultilateralismbyblockingthe

5WTO(2019),ReportsReportshowstraderestrictionsbyWTOmembersathistoricallyhighlevelshttps://www.wto.org/english/news_e/news19_e/dgra_12dec19_e.htm6Ibid.7EuropeanCommission(2019a),ReportfromtheCommissiontotheParliamentandtheCouncilonTradeandInvestmentBarriers,1January2018–31December2018,Brussels,p.58Op.cit.p.6.9OrganisationforEconomicCo-operationandDevelopment(2019a),“OECDEconomicOutlook,Volume2019Issue1”,Paris.https://www.oecd-ilibrary.org/economics/oecd-economic-outlook-volume-2019-issue-1_b2e897b0-en

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appointmentsofmemberstotheWTOAppellateBody,defactoparalysingit.10Asaresult,themultilateraltradingsystemdoesnothaveafunctioningdisputesettlementsystem,whichcouldtemptmorecountriestoimposenewtariffsorrestrictions.Inaddition,theCOVID-19crisishasacceleratedtheprocessofeconomicdecouplingbetweentheUSandChina,inparticularinthetradeandinvestmentfields,amidrisingpoliticaltensions.ThiscontextchallengestheEUinmultipleways.TheEUhastraditionallyaimedtopromotetradeliberalisationandguaranteefaircompetition,withapreferenceformultilateralarrangements.However,giventhechallengestothemultilateralsystem,theEUhasalsoincreasinglyoptedfornegotiatingpreferentialbilateralandregionaltradeagreements.Moreover,theEUhastakenaseriesofmeasurestorespondtopracticeswhichdistortfaircompetitionwhileestablishingalevelplayingfieldintradeandinvestment.Givengrowingprotectionismandgeo-economiccompetition,complicatedbyaneconomicrecessionandgeopoliticaltensionsfollowingtheCOVID-19crisis,11theEUshouldfosteritscapacitytoactmorestrategicallyandmoreautonomously,todefendandadvanceitsinterestsandvalues.PursuingstrategicautonomyisultimatelyaboutenablingEuropeanstotakeandimplementdecisionstoadvancetheirprioritiesincooperationwithothers,wherepossible,andontheirown,ifnecessary.Whilethispaperfocusesontradeandinvestmentpolicies,advancingEurope’sstrategicautonomyrequiresamuchbroaderapproachthatincludesindustrialpolicies,technologyandinnovationaswellassecurityanddefence.TradepolicycanalsobeanimportantinstrumentinensuringthesuccessofEUindustrialanddigitalstrategiesandtheEuropeanGreenDealthatdefineEurope’soverarchingprioritiesforfuturegrowthandcompetitiveness.This

10WientzekOlafandGregosz,David(2019),AWTOincrisis–butnotatbreakingpoint,Konrad-Adenauer-Stiftung.11Gregosz,David,Köster,Thomas,Morwinsky,OliverandMartinSchebesta(2020),Coronavirusinfectsthe

paperarguesthatindevelopingamorestrategicapproachtoitstradepolicy,theEUshouldbrace,empowerandengage.12Brace,EmpowerandEngage› BracemeansstrengtheningEurope’scohesionandresiliencetomultidimensionalcompetitionandmoreaggressivetradingpractices.ForEUtradepolicy,thistranslatesintostrongertoolstocopewiththeincreaseinprotectionistmeasureswhichtargetoraffectEurope.Althoughmultilateralismandcooperationshouldremainthepreferredoptionstoaddressdifferencesanddisputes,theEUshouldalsohavethemeanstoactunilaterallyifneeded.Thisincludesreviewingordevelopingnewtradedefenceinstrumentstobothdeterthirdcountriesfromadoptingdistortivemeasuresandrespondtounfairtradingpractices.

› Empowermeansleveragingtheuntappedpotential of the Single Market and jointactionbytheEUanditsmemberstatestoincreasegrowth, expandcapabilitiesandensure fair competition globally. Byempowering Europe, EU trade policyshouldaimtoachievealevelplayingfieldwith partners and competitors. Thisincludes obtaining new instruments totackleunfairsubsidies,expandingmarketaccess, implementing trade agreementsandestablishinganadequatescreeningofforeign direct investment (FDI) in keystrategicsectors.

› EngagemeansstrengtheningEurope’sroleinupholdingrules-basedcooperationandastableinternationalorder.ForEUtradepolicy,internationalengagementandcooperationshouldremainanoverarchingstrategicalgoal.Strategicautonomyshouldnotleadtodisengagementandisolation.Instead,itshouldbeaboutbuildingastrongerpositionforcooperationand

globaleconomy:Theeconomicimpactofanunforeseeablepandemic,Konrad-Adenauer-Stiftung.12Grevi,Giovanni(2020),Europe’spathtostrategicrecovery:Brace,empowerandengage,DiscussionPaper,EuropeanPolicyCentre.

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partnership.13Althoughmultilateralsolutionsareoftenoutofreachinapolarisedinternationalcontext,theEUshouldneverthelesscontinuetoseektopreserveandexpandmultilateralregimesontradeandinvestment.Thisalsorequiresoperatingthroughsmallercoalitionsoflike-mindedactorsthatareopentoothers.

1. BraceTheriseofunilateralism,therevivalofmercantilistapproaches,andtheempowermentofstate-drivencapitalismarehighlyconcerningdevelopmentsforEurope.PivotalEUtradepartnersareincreasinglyusingtradepolicyinstrumentsmoreactivelytoachievetheireconomic,industrialandpoliticalgoals.Thesepracticescantaketheformofeitherbordermeasures(restrictionsthatdirectlyaffectimportsandexports,e.g.tariffs,importlicensing,bans)orbehind-the-bordermeasures(e.g.restrictionsonservices,investments,procurementmarkets;unjustifiedtechnicalbarrierstotrade),tofavournationalindustriesdirectlyorindirectly.14Overall,themostaffectedsectorsinEuropeareICT,chemicals,automotive,textiles,agricultureandfisheries.15Inrecentyears,Chinahasintroducedagrowingrangeoftraderestrictions.Lookingback,Chinaprogressivelyopenedits

13Grevi,Giovanni(2019),StrategicautonomyforEuropeanchoices:ThekeytoEurope’sshapingpower,DiscussionPaper,EuropeanPolicyCentre,Brussels,p.3.https://wms.flexious.be/editor/plugins/imagemanager/content/2140/PDF/2019/190719_Strategicautonomy_GG.pdf14EuropeanCommission(2019),Op.cit.,p.8.15EuropeanCommission(2019),Op.cit.p.1116Lardy,NicholasR.(2003),TradeLiberalizationandItsRoleinChineseEconomicGrowth,PetersonInstituteforInternationalEconomics,PreparedforanIMFandNationalCouncilofAppliedEconomicResearchConference,NewDelhi,November14-16,2003;Preen,Mark(2019),EconomicReforminChina:CurrentProgressandFutureProspects,ChinaBriefing,DezanShira&Associates.17Lardy,NicholasR.(2019),StateSectorSupportinChinaIsAccelerating,PetersonInstituteforInternationalEconomics;Preen,Mark(2019),EconomicReforminChina:CurrentProgressandFutureProspects,ChinaBriefing,DezanShira&Associate.

economybothbeforeandafteritsaccessiontotheWTO.Thiswasdonenotablybyreducingimportrestrictions,loweringtariffs,andeasingsomeFDIrestrictions.16However,inthelastfewyears,theChinesestatehasbeenplayingamoreactiveroleinmarkets,withvariousformsofsupporttostate-ownedor-backedcompanies,andnewbehind-the-borderbarriersinkeysectors.17Inparticular,ithasimposednewrestrictionsonforeigncompaniesintheICTsectorandotherhigh-techindustries,manyrestrictionsfallwithinthescopeofitsMadeinChina2025industrialstrategy.18TheCommissionestimatesthatnewtradebarriersrecordedinChinain2018alonewillaffect€25.7billionworthofEUexports–thelargesteffectoftraderestrictionsimposedbyanyEUpartner.19Europeanfirmsarealsofacingbarrierselsewhere.TheTrumpadministrationhasadoptedawiderangeofmeasuresonquestionable“nationalsecurity”grounds,withtariffsonsolarpanels,washingmachines,steel,aluminium,arangeofagri-foodproductsandaircraft.20FurthertariffsonEuropeancars,automotiveparts,wineandagriculturalproductshavealsobeenforeseen.TradebarriersimposedbytheUSareexpectedtoimpactEUexportsworthupto€6.8billion.21Moreover,EuropeanfirmsarefacingsignificantborderrestrictionsinRussiaandIndonesiaandadditionalbehind-the-borderrestrictionsinRussiaandBrazil.Newrestrictionshavealsobeen

18EuropeanCommission(2019),Op.cit.p.14;Zenglein,MaxJ.andAnnaHolzmann(2019),“EvolvingMadeinChina2025:China’sindustrialpolicyinthequestforglobaltechleadership”,Berlin:MercatorInstituteforChinaStudies.19EuropeanCommission(2019),ReportfromtheCommissiontotheParliamentandtheCouncilonTradeandInvestmentBarriers,1January2018–31December2018,Brussels,p.12.https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52019DC0271&from=en20Tankersley,Jim,“Trump’sWashingMachineTariffsStungConsumersWhileLiftingCorporateProfits”,TheNewYorkTimes,21April2019;Fortuna,Gerardo(2020),MEPsurgeexceptionalmeasurestocompensateUStariffsonEUfoodstuffs,Euractiv,https://www.euractiv.com/section/agriculture-food/news/meps-urge-exceptional-measures-to-compensate-us-tariffs-on-eu-foodstuffs/21EuropeanCommission(2019),Op.cit.p.14.

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recordedinIndiaandAlgeria,withgovernmentsintroducingnewimportdutiesinkeysectors,restrictionsonagriculturalproductsandnewtechnicalbarrierstotrade.22GiventhegridlockoftheWTO’sdisputesettlementmechanism,theEUshouldreviewandstrengthenitstradedefenceinstrumentsandpreparetowalkthewalkincombatingunfairtradingpracticesalone,ifneeded.Fromthisstandpoint,themodernisationofEUtradedefencetoolsfrom2017to2018–thefirstmajorreviewsince1995–representedanimportantstepinenhancingtheEU’santi-dumpingandanti-subsidyinstruments.Itmadeinvestigationsfasterandmoretransparent,madeimposinghigherdutylevelspossible,andmadeadditionalsupportforSMEsavailablethroughahelpdesk.Thankstothesearrangements,theCommissionwas,forexample,quicktorespondtotheUSimportdutiesonsteelandaluminiumin2018,withsafeguardmeasures(i.e.anadditional25%dutyonsteelimportstotheEUtoavoidasuddenincreaseofimportsdivertedfromtheUStotheEU)andrebalancingmeasures(additionaldutyonselectedUSproducts,e.g.steel,aluminium,agriculturalandothergoods).RecommendationsforActionTheEUshouldplayanactiveroleinreformingtheWTO(seealsopart3),whilemakingsurethatthetemporaryappealarrangementsetuptocopewiththegridlockoftheWTOAppellateBodyisviable.Thisisevenmorenecessaryforapost-COVID-19world,wheretradebarriersintroducedasemergencymeasuresmaynotberemovedasthecrisisrecedes.AlreadyinDecember2019,theEuropeanCommissionsuggestedamendmentstotheEU’sEnforcementRegulationforinternationaltraderules.TheseamendmentswouldallowforEUeconomiccountermeasureswhen

22EuropeanCommission(2019),Op.cit.p.17-19.23EuropeanCommission(2019),EU-China–Astrategicoutlook,JointCommunicationtotheEuropeanParliament,theEuropeanCouncilandtheCouncil,JOIN(2019)5final,Strasbourg,p.8.https://ec.europa.eu/commission/sites/beta-political/files/communication-eu-china-a-strategic-outlook.pdf

tradepartnersdistorttradeandsimultaneouslyblockorpreventtheproperfunctioningoftheWTOAppellateBodyorthedisputesettlementmechanismsincludedinEUtradeagreements.ThisisanecessaryfirststeptocopewiththeblockageoftheWTOAppellateBody,whichtheEuropeanParliamentandCouncilshouldadoptassoonaspossible.TheEUshouldalsogofurtherinmodernisingitstradedefenceinstruments.EUinstrumentscurrentlyfocusmostlyonanti-dumping(pricingexportedgoodsbelowthedomesticprice)andanti-subsidy(statesupportthatconfersabenefittoacompanyorsector,e.g.agrant,loanortaxcredit).Assuch,EUtradedefencegenerallyconcentratesonissuesofpricingandpublicfinancinganddoesnotcoverallpotentialeffectsofdistortedsubsidiesorsupportbythirdcountries.23First,EUtradedefenceinstrumentsshouldalsobeusedtotackleotherformsofdistortions,suchasstateownership,thesubsidisationofstrategicsectors,andotherformsforindirectstatebacking.Moreover,theEUshouldalsoconsiderthepossibilityofapplyingtradedefencetoolstocertainserviceswhichcurrentlylackthetoolstotackledistortionseffectivelyandsufferfromdumpingandillegalsubsidies(e.g.shipping).Second,forEuropeanbusinessestoinitiateananti-dumpingcasewiththeCommission,theyusuallymustprovethattheyhavesufferedaserious‘materialinjury’–evenifa‘threatofinjury’wouldsufficetostartacaseunderthecurrentlegislation.Insomecases,however,affectedbusinessesmaybecompelledtochangeproductionpatternsorotherwiseadapttoavoidapotential‘materialinjury’.24Havingtoprovea‘materialinjury’mightthereforesometimescometoolatetoavoiddamagetoeconomicactivities.

24BusinessEurope(2019),TheEUandChina:AddressingtheSystemicChallenge–AcomprehensiveEUstrategytorebalancetherelationshipwithChina,Brussels,p.60.https://www.businesseurope.eu/sites/buseur/files/media/reports_and_studies/the_eu_and_china_full_february_2020_version_for_screen.pdf

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Inaddition,theCommissionusuallyopensanti-dumpingandanti-subsidycasesbasedoncomplaintsfrombusinesses.25However,itisnotalwayseasyforSMEstogatheralltheevidencenecessaryforsuchcomplaints,giventhelackoftransparencyofsomestate-backedcompaniesorthedifficultyincalculatingwhatwouldbe‘equivalentconditions’(i.e.pricing)indomesticmarketslikeChina.Astrongerfocuscould,therefore,beputonthe‘threatofinjury’intradedefencecases.Furthermore,theCommissionandmemberstatesshouldaimtodevelopmoreaccurateandrobustmarketintelligenceforcountriesthatlacktransparentmarkets.Third,althoughthemodernisationoftradedefenceinstrumentshassignificantlyincreasedtheworkloadoftheCommissioninassessinganti-subsidyandanti-dumpingcases,thebudgetandstaffallocatedtothesetaskshavemostlyremainedstatic.Itisessentialtoscaleupbothtoprocesscasesandtoacquiremoreexpertiseonforeignmarkets.Inturn,thiscouldalsoallowtheCommissiontoopencasesonitsowninitiativemoreoften.26StrengtheningtradedefenceshouldstrictlyaimatreinstatingalevelplayingfieldandfaircompetitionandshouldnotleadtofavouringEuropeanbusinesses.Assuch,EUtrademeasuresshouldcontinuetobenotifiedtotheWTO,aswasthecasewithCOVID-19-relatedmeasures.27Wheretemporarymeasuresareneeded,whiletheblockageoftheWTOAppellateBodypersists,theyshouldalsoceasetoexistorbeincorporatedintotheWTOsystemthemomenttheBodycanresumeitsactivity.2. EmpowerEvenwhilebracingforgeo-economiccompetition,EUactioncannotbeguidedbyadefensiveagendaonly.TheEUshouldalsodevelopamoreproactiveagendawhich

25BusinessEurope(2019),Op.cit,p.60.26BusinessEurope(2019),Op.cit,p.60.27EuropeanCommission(2020),EUensurestransparencytowardsitstradepartnersoncoronavirus-relatedactions,https://trade.ec.europa.eu/doclib/press/index.cfm?id=2131,lastaccessed16April2020.

leveragesitsassets,expandsitscapabilities,andenforcesitsrulesmoreeffectively.InempoweringEurope,EUtradeandinvestmentpoliciesshouldbedirectedtowardsachievingalevelplayingfieldwithtradepartners,whichcoversissuesofsubsidiesandmarketaccess.TheseprioritiesshouldbetakenforwardwhileconsideringtheimpactoftheCOVID-19crisisonEurope’sownrulesandarrangements.EUgovernmentsandpublicauthoritiesareplayingamoreactiveroleintheirrespectivenationaleconomies,providingfinancialsupporttofirmsandpreventingcompanieswhosemarketvaluehasbeenslashedbythecrisisfrombeingboughtbyforeigninvestors.TheCommissionhastemporarilyloosenedtightfiscalcriteriawithintheStabilityGrowthPactandcompetitionrulesconcerningstateaidtoallowmemberstatesmorefinancialroomtomanoeuvreandreactforcefullytothecrisis.Thesemeasures,however,areexplicitlyrelatedtotheeconomicimpactofthecrisisandnotintendedtoalterfiscalorcompetitionregimespermanently.TheSingleMarketisEurope’scoreassetinmeasuringuptoglobaleconomiccompetitionandadvancingarules-basedagenda.Ithasevolvedintotheworld’slargestsinglemarketandmostintegratedtransnationalmarket.28ItprovidesEuropeanbusinesseswithalargedomesticmarketandthushelpsthemgrowandscaleup.Globally,itprovidesEuropewithimportantleverageintradenegotiations,andenablestheEUtoremainoneofthemainprovidersandatopglobaldestinationofFDIs.29Additionally,theSingleMarketisarguablyacorecomponentofEurope’ssoftpower,whichincludesinternationalreputationandattractiveness.ByleveragingtheSingleMarket,theEUacquiresregulatorycloutandcansuccessfullyexportitsmarketrules,normsorstandardsglobally.Keyareasincludethe

28Bjerkem,JohanandHarbour,Malcolm(2019),MakingtheSingleMarketwork:Launchinga2022masterplanforEurope,DiscussionPaper,EuropeanPolicyCentre.29UNCTAD(2019),WorldInvestmentReport2019,UnitedNations.

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EU’scompetitionpolicyinantitrustcases,EUenvironmentalandchemicalregulationsuchastheREACHRegulation,orEUdigitalpolicywiththeGeneralDataProtectionRegulation.ThisabilitytoregulateglobalmarketshasledtotheEUbeingdescribedasa“marketpower”30and“regulatorypower”31,whileothershavedescribedthisas“theBrusselsEffect”.32However,althoughEuropehasopenedmuchofitsmarkettotherestoftheworld,Europeanbusinessesrarelyenjoyreciprocalmarketaccesstothird-countries.33Somethird-countriesareincreasinglyclosingmarketsegmentstoboostnationalproductioninkeytechnologies,adoptingdomesticpreferencesinpublicprocurements,oraddingnewrestrictionsonFDIs.34Forprocurementmarkets,forexample,theCommissionunderlinesthatthoughEUpublicprocurementofaround€352billionisopentobiddersfromthird-countries,itonlyamountsto€178billionintheUS,€27billioninJapan,andevenlessinChina.35ThisresultsinadistortedlevelplayingfieldforEuropeanbusinesses.RecommendationsforActionInestablishingafairgloballevelplayingfield,theEUshouldmakemorestrategicuseofitsSingleMarket,leveragingitbettertogainmoreclout.AtatimewhensomeofEurope’sSingleMarketruleshavebeenputonholdtocopewiththeCOVID-19crisis,itisthereforeimportanttoensurethat,oncetheemergencysituationisover,SingleMarketrulesarereinstated.TheEUcouldframeitsroadmapforliftingtemporaryderogationsfromtheSingleMarketregime

30Damro,Chad(2012),MarketpowerEurope,inJournalofEuropeanPublicPolicy,vol.19,issue5,p.682-699,Taylor&FrancisOnline.31Young,AlasdairR.(2015),TheEuropeanUnionasaglobalregulator?Contextandcomparison,inJournalofEuropeanPublicPolicy,vol.22,issue9,p.1233-1252,Taylor&FrancisOnline.32Bradford,Anu(2020),TheBrusselsEffect:HowtheEuropeanUnionRulestheWorld,OxfordUniversityPress.33Bjerkem,JohanandHarbour,Malcolm(2019),op.cit.p.434Bjerkem,JohanandPilati,Marta(2019),AnIndustryActionPlanforamorecompetitive,sustainableandstrategicEuropeanUnion,IssuePaper,EuropeanPolicyCentre,Brussels,p.13.

aspartofarenewedcallforagloballevelplayingfieldthatcanhelppreserveanopeneconomicorder.Indoingso,theEUshouldalsodevelopnewinstrumentsandreviewoldones.First,theEUshouldconsiderintroducinganewlevelplayingfieldinstrumenttobetteraddressthedistortiveeffectsofforeignstateownershipandsubsidiesontheSingleMarket.TheDutchgovernmentpublishedanon-paperinDecember2019arguinginfavourofstrengtheningtheCommission’spowertointervenewhenstate-backedbusinessesaredistortingmarkets.36TheCommissionwouldthenbeabletorequestgreatertransparencyofbusinesses’accountsandpartiallyreversetheburdenofproofaskingcompaniestoprovethattheydonotreceivegovernmentsupportorbenefitfromanunregulateddominantpositioninathirdcountry.TheCommission’sWhitePaperonforeignsubsidiesfromJune2020isawelcomeinitiative,37andaftertheplannedpublicconsultation,itshouldrapidlyleadtoaproposalforstrengtheningtheCommission’spowersintacklingallsubsidieswiththepotentialofdistortingtheSingleMarket.AlthoughthelatestEUindustrialstrategymentionsthepossibilityofintroducingsuchaninstrumentin2021,38arguablythecurrentcrisisshouldspeedupthings,withhopefullyafirstproposalbytheendof2020.isalsoplanningtoworkonaninstrumentforaddressingforeignsubsidieswithintheSingleMarketby2021,accordingtoits

35EuropeanCommission(2016),AmendedproposalforaRegulationoftheEuropeanParliamentandtheCouncilontheaccessofthird-countrygoodsandservicestotheUnion’sinternalmarketinpublicprocurement,COM(2016)34final,Brussels,p.2.36DutchPermanentRepresentation(2019),Non-paper–Strengtheningthelevelplayingfieldontheinternalmarket,https://www.permanentrepresentations.nl/documents/publications/2019/12/09/non-paper-on-level-playing-field37EuropeanCommission(2020),CommissionadoptsWhitePaperonforeignsubsidiesintheSingleMarket,https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1070,lastaccessed18June2020.38EuropeanCommission(2020),ANewIndustrialStrategyforEurope,COM(2020)102final,Brussels.

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latestEUindustrialstrategy.39EstablishingsuchaninstrumentwouldhelpensurethatallcompaniesintheSingleMarketcomplywithEUcompetitionrulesanddonotenjoyunfairadvantages–includingcompaniesbasedinthirdcountries.Second,theEUshouldadoptaninternationalpublicprocurementtooltoachievereciprocityinmarketaccess.Inotherwords,torestrictthirdcountries’accesstoEuropeanprocurementmarketswhenEUcompaniescannotaccesstheformer’spublicmarkets.40TheCommissionalreadypresentedsuchaninstrumentin2012andputforwardarevisedproposalin2016.41However,sofarnoagreementhasbeenfoundintheCouncilandParliament.In-depthdiscussionswillbeneededtodesignsuchaninstrumentwell,ensuringthatitfitsitspurposeandisnotmisusedforprotectionistends.Onthatbasis,theinstrumentshouldbeapprovedassoonaspossiblebythetwoco-legislators.Third,althoughEuropeshouldcontinuetohaveanopenregimeforFDI,itshouldalsoscreenFDIinEuropemorestrategically.Europe’sopenregime,inadditiontothelackofventureandgrowthcapital,hasledtoforeigntakeoversofkeyEuropeantechnologyfirmsorbusinesses.In2018alone,13promisingEuropeancompaniesandstart-upswereacquiredbymajorUStechcompanies.42Chineseinvestmenthasalsotargetedkeyindustrialsectors:suchastheGermanfirmsKUKAinrobotics,EEWEnergyfromWasteinwasterecyclingandKraussMaffeiinmanufacturing,ortheSwedishmicro-electronicsfirmSilexMicrosystems.43

39EuropeanCommission(2020),ANewIndustrialStrategyforEurope,COM(2020)102final,Brussels.40Bjerkem,JohanandPilati,Marta(2019),op.cit.p.50.41EuropeanCommission,Internationalpublicprocurement:https://ec.europa.eu/growth/single-market/public-procurement/international_en,lastaccessed31March2020.42Sawers,Paul(2018),13EuropeancompaniesacquiredbyU.S.techgiantsin2018,Venturebeathttps://venturebeat.com/2018/12/24/13-european-companies-acquired-by-u-s-tech-giants-in-2018/43Seaman,John,Huotari,MikkoandOtero-Iglesias,Miguel(eds)(2017),ChineseInvestmentinEuropeACountry-LevelApproach,ReportbytheEuropean

TheEUrecentlyadoptedanewframeworkforscreeningFDIs,whichisexpectedtobefullyoperationalinthesecondhalfof2020.TheCommissionalsoissuednewguidelinestoprotectcriticalEuropeanassetsandtechnologyduringtheCOVID-19crisisinMarch2020.44Uponnotificationfrommemberstates,theCommissioncanadoptnon-bindingrecommendationstonationalauthoritiesconcerningforeigninvestmentcarryingimplicationsonthegroundsofsecurityorpublicorderformorethanonememberstateorfortheEUatlarge.Thisisagoodfirststep,butnationalinvestmentscreeningarrangementsremainuneven,withseveralmemberstatesnothavingsetupadequateregimes.Tostartwith,itisimportantthatallmemberstatesestablishreliablescreeningregimes.Beyondthat,buildingontheexperienceofthefirststageofimplementationofthenewEUlevelframework,considerationshouldbegiventoreinforcingit.ScreeningcooperationattheEUlevelshouldgobeyondanexchangeofinformation,andtheweightoftheCommission’s‘non-binding’opinionsshouldbestrengthened.Onceadopted,theCommission’sopinionsshouldbediscussedatthehighestlevelwithgovernmentsandnationalauthorities,ifneeded,allowingtheCommissiontofollow-upifitconsidersthatamemberstatehasnottakendueaccountofitsopinion.Fourth,theEUshouldalsolookatwaystobettermonitorandenforceitsfreetradeagreements(FTAs).Giventhecomplicatedrulesandadministrativeburdens,itisnotalwayseasyforEuropeanbusinessestomakemoreactiveuseofEUfreetradeagreements(FTAs).45Forexample,parties

Think-tankNetworkonChina,byFrenchInstituteofInternationalRelations(Ifri),ElcanoRoyalInstitute,MercatorInstituteforChinaStudies.44EuropeanCommission(2020),Coronavirus:CommissionissuesguidelinestoprotectcriticalEuropeanassetsandtechnologyincurrentcrisis.45TheNationalBoardofTrade–Sweden:TheUseoftheEU’sFreeTradeAgreements(2018)https://www.kommerskollegium.se/globalassets/publikationer/rapporter/2018/publ-the-use-of-the-eus-ftas.pdfandWhoUsestheEU’sFreeTradeAgreements?(2019)https://www.kommerskollegium.se/globalassets/publikationer/rapporter/2019/publ-who-uses-the-eus-free-trade-agreements.pdf,Stockholm.

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toanFTAmaystillhavetocomplywithcomplexrequirementstoprovetheoriginofaproduct.46Companiesmay,therefore,beunabletocomplywithsuchrequirementsandenduppayingtariffsapplyingtocountriesnotpartoftheFTA.Ontheonehand,theEUshouldensurebetterimplementationofitsFTAswithinmemberstates.Oneoptionwouldbetodefine,incooperationwithnationalauthorities,actionplansfortheenforcementoflargeFTAs,giventheirsubstantialregulatoryimpactandthebusinessopportunitiestheyrepresent.Ontheotherhand,theEUshouldempowerthesoonto-be-appointedChiefTradeEnforcementOfficertobettermonitorandenforceEUFTAobligationsinthirdcountries.ThisshouldincludetheimplementationofthesustainabledevelopmentchaptersandfortheEUtomoreactivelyrefercasestorelevantdisputesettlementprovisions.GiventhehighenvironmentalstandardstheEUhassetforitselfwithitsGreenDeal,tradepolicyshouldalsobeinstrumentalinavoidingso-calledcarbonleakage–theimportofgoodsproducedunderlowerenvironmentalstandards–whichwouldaffectthecompetitivenessofEUindustry.AcarbonborderadjustmentmeasuretorectifythisimbalancecanbeastepintherightdirectionandcouldfigureinEUFTAs.SuchamechanismwouldhavetobeWTOcompliantandstrictlyinlinewiththeobjectivesofsustainabledevelopmentandpreservingtheenvironmentmentionedbyWTOrules.47TheEUcouldalsogofurtherinassessingandmonitoringpartnercountries’implementationoftheParisAgreementandprioritiseFTAswithcountriesthatareloweringthecarbonintensityoftheireconomiesandmovingtowardsdecarbonisation.Finally,tobeinabetterpositiontotackletraderestrictionsglobally,theEUshouldensureconsistencybymakingsurethatitsownpoliciesdonotundermineitscallsfor

46TheNationalBoardofTrade–Sweden,(2018),op.cit.,p.2.47NotablyinArticleXXofGATTorinthepreambleoftheMarrakeshAgreement48Bjerkem,JohanandPilati,Marta(2019),Op.cit.,p.15.

freeandopentrade.Recentyears–butalsoinrecentweeks,followingtheoutbreakofCOVID-19–haveseentheresurgenceoftradebarrierswithintheSingleMarket.Ithascomeintheformofnationalorregionalmeasuresadopted,forexampleonthegroundsofpublicsafety,environmentalandhealthconcerns(e.g.technicalrequirements,andrequestsforadditionaldocumentationortesting).48SuchbarriersneedtobemoreactivelytackledbytheCommissionandthememberstates.Whenpossible,thememberstatesshouldalsoensurethecoordinatedliftingofthelockdownmeasuresaffectingtradeandbarriersformedicalgoodsrelatedtoCOVID-19.AlthoughmostEUcountrieshaveliftedtheirexportbans,somestillhavede-factoexportbansorlimitsonafewmedicinesandequipmentinplace.49FailingtodosowouldmaketheEUlesscrediblewhenitasksfortraderestrictionstobeliftedelsewhereintheworld.3. EngageAmorestrategicEUapproachtotradeandinvestmentshouldnotbeaboutisolationorretreatingfrominternationalcooperationorpartnerships.Inaworldwherebigpowersaregainingmoreassertiveness–includingininternationaltrade–strategicautonomybecomesnecessarytoenterintopeerpartnershipswithcountrieslikeChinaortheUSandre-centreEUtradepriorities.50EspeciallygiventheimpactofCOVID-19,reinforcingtrendstowardsprotectionismandunilateralism,internationalengagementandmultilateralismshouldremainoverarchingstrategicgoalsforEUtradeandinvestmentpolicies.Thistaskisnoteasy.TheUSisprogressivelyretreatingfrommultilateralism,preferringtoadoptacombinationofunilateralmeasuresandbilateralcooperationtoshakeandnudgeitspartnersaccordingtoitsinterests.Ontheotherside,Chinaisinvestingselectivelyinmultilateralcooperation,openingupitseconomyin

49Evenett,Simon(2020)‘Flawedprescription:Exportcurbsonmedicalgoodswon’ttackleshortages’,inCOVID-19andTradePolicy:WhyTurningInwardWon’tWork,ed.Baldwin,Richard,andEvenett,Simon,VoxEU.org,CEPRPress.50Grevi,Giovanni(2019),op.cit.,p.11.

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somesectorstotradeandinvestment,butkeepingkeyindustrialsectorsclosed.TheChinesestate’slackoftransparencyandthegrowingroleinstrategiceconomicsectorschallengecooperation.51SomeexpertshavebeenreferringtoChina’sopacityconcerningpreciseconditionsformarketaccessandreliablestatisticsasan‘economicblackbox’.52Moreover,beyondtheblockageoftheWTO’sAppellateBody,themultilateraltradenegotiationagendahasrunintothesand.WhiletheDohaDevelopmentRoundisfrozen,currentWTOrulesareindireneedofmodernisation.Forone,theydonotcapturewellthedistortiveeffectsposedbystate-ownedenterprisesandindustrialsubsidies.Foranother,modernisationisalsoneededforbetterregulationandbenefitingoftherapiddevelopmentofnewdigitalmarkets.However,evenifmultilateralsolutionsarenotcurrentlywithinreach,backingdownfrominternationalcooperationwouldbedetrimentaltoEUinterestsandinfluence.EUactionattheunilateralorbilaterallevelcanhelpachieve–butnotfullydeliver–theprioritiestoppingtheagendaofEUTradeCommissionerPhilHogan.Theserangefromtacklingunfairtradepractices,subsidiesandforcedtechnologiestransfers,topromotingfairandsustainabletrade.53Theseprioritiesshould,therefore,continuetobeatthetopoftheEU’smultilateralorplurilateralagenda.Furthermore,astablesystemofinternationaltraderuleswillbeparticularlyimportantifEuropeistotapintoglobaleconomicgrowth.Despitetheuncertaintysurroundingtheimplicationsofthecurrentpandemic,emergingcountriesareexpectedtocontributetoglobalgrowththemostinthelongterm.

51Nakamura,Yu(2017),ChineseenterpriseswriteCommunistParty'sroleintocharters,NikkeiAsianReview,https://web.archive.org/web/20170818133405/https://asia.nikkei.com/print/article/287096;Lardy,NicholasR.(2019),StateSectorSupportinChinaIsAccelerating,PetersonInstituteforInternationalEconomics.52Han,AliceSiqi(2019),China’sEconomicBlackBox,ForeignPolicyhttps://foreignpolicy.com/2019/03/17/chinas-economic-black-box/;Holodny,Elena(2015),Chinaisablackbox,BusinessInsider

RecommendationsforActionFirst,theEUshouldcontinuetoexpanditsnetworkofFTAsandsectoraltradeagreements.Tomakeprogressonthisfront,itwillbeimportanttopromotealargedebateontheobjectivesandinstrumentsofEUtradepolicywithcitizensandpolicymakers,soastostrengthenconvergencearoundacommonagendaacrossmemberstates.TheEUcurrentlyhasoneofthemostextensiveandbroadnetworksofFTAsintheworld,comprising42agreementswith73partners.Despiteongoingchallenges,theEUhasbeenabletoincreasethisnetworkinrecentyears,includingtoCanada,Japan,Singapore,Vietnam,andtheMercosurcountries.54NegotiationswithAustralia,NewZealand,Indonesia,andtheUK–potentiallytheEU’smostsignificantFTA–areongoing.WhiletheEU’sengagementstrategyseemstopayoffatthislevel,strongerprovisionsonenforcementshouldalsobeincludeinEUFTAs,giventheWTO’scurrentlydysfunctionalAppellateBody.Second,thisengagementstrategyshouldincludethebilateralinvestmentagreementtheEUiscurrentlynegotiatingwithChina.Bothpartieshaveagreedtoconcludethedealby2020.However,theimpactoftheCOVID-19crisis,alongsideslowprogressinthenegotiations,mightaffectthisobjective.ThedealaimstosecurebettermarketaccessconditionsforbothEUandChineseinvestors,ensureequaltreatmentandestablishdisputesettlementmechanisms.ThecurrentCOVID-19crisisshouldleadtheEUtoalsostepupnegotiationsonsustainabledevelopment,adequatehealthrequirementsandenvironmentalstandards.Suchconsiderationswillhavetobeincluded

https://www.businessinsider.com/chinas-impenetrable-politics-are-the-real-challenge-2015-11?r=US&IR=T53EuropeanCommission(2019),MissionLettertoPhilHogan,CommissionerforTrade,bythePresidentoftheEuropeanCommissionUrsulavonderLeyenhttps://ec.europa.eu/commission/sites/beta-political/files/mission-letter-phil-hogan-2019_en.pdf.Lastaccessed1April2019.54EUFTAshavebeensignedwithCanadain2016,withJapanin2018,withSingaporein2018,withVietnamin2019andwiththeMercosurcountriesin2019.

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moreactivelyinalltradeandinvestmentagreement,withChinaaswellasotherpartners.Third,EUtradepolicyshouldberecentredaroundfewertop-priorities.IncludingtoomanyissuesinFTAscandriveawaypotentialtradepartnersorcomplicateconcludingnewdealswithlargepartners.Inthecurrentcontext,EUprioritiesshouldinsteadberecentredaroundissuesofmarketaccess,unfairtradepractices,subsidies,forcedtechnologiestransfersandsustainabletrade.ThecurrentCOVID-19crisisshowsthatsustainabletradeshouldbeunderstoodbroadly,includingadequatehealthrequirementsandenvironmentalstandards.Inaddition,theEUwillneedtoadvancepriorityissuesthroughmultilevelengagement,encompassingbilateral,plurilateraland,wherepossible,multilateralfora.TherecentJointStatementmadebytheEU,theUSandJapanonstrengtheningglobalrulesonindustrialsubsidiesisagoodexampleofamobilisedcoalitionoflike-mindedpartiessteppingtowardsestablishingabroadermultilateralregime.55InresponsetotheCOVID-19crisis,somehavealsoproposedaplurilateralagreementonremovingorreducingtariffsonmedicalequipmentandcrucialgoods.56ThegovernmentsofSingaporeandNewZealandhavealreadyproposedsuchanagreement,andCommissionerHoganisinfavourofthisapproach.57Fourth,theEUshouldcontinuetospearheadthereformandstrengtheningoftheWTO.ItiscrucialtosetupandoperatethroughtemporaryalternativearrangementswhileitsAppellateBodyremainsblocked.InMarch2020,theEUplayedapivotalroleinestablishinga

55EuropeanCommission(2020),EU,U.S.andJapanagreeonnewwaystostrengthenglobalrulesonindustrialsubsidies,https://trade.ec.europa.eu/doclib/press/index.cfm?id=210156Guinea,Oscar(2020),AGlobalAgreementonMedicalEquipmentandSuppliestofightCOVID-19,ECIPE,Blog,https://ecipe.org/blog/global-agreement-medical-supplies57GovernmentofNewZealand(2020)Covid-19response:NewZealandandSingaporelaunch

contingencyappealarrangementfortradeissues,whichincludes15otherWTOmembers(e.g.China,Brazil,CanadaandMexico).58TheEUshouldnowfocusitseffortstoconvinceotherWTOmemberstojoin,especiallyJapan,theUK,Argentina,IndiaandRussia.ConclusionGlobalchallengesintradeandinvestmentaffectEuropebotheconomicallyandpolitically.Inanincreasinglycompetitiveandvolatileinternationalenvironment,Europeneedsastrongerpowerbasetoupholditsinterests,confrontchallenges,engagewithpartnersandsupportrules-basedcooperation.TheEUandtheEuropeanCommissionwillneedastrongmandatefromtheEUmemberstatestoactforcefullyontradeandinvestmentpolicy.Europecanonlybeasstrongasitsmemberstatesallowittobe.Torisetothistask,theEUmustactmorestrategicallyand,whereneedbe,autonomously,viaitstradeandinvestmentpolicies.ThispaperhasoutlinedsomekeystepsthattheEUshouldtaketofosteritsstrategicautonomyinthisdomain,alongthreeprincipalandmutuallyreinforcinglinesofaction:brace,empowerandengage.Ultimately,strengtheningstrategicautonomyisanessentialrequirementtoreinforceEuropeansovereignty,asmanyEUleadershavebeencallingfor.PrioritiesincludestrengtheningandmodernisingtheEU’stradedefenceinstruments,leveragingitsSingleMarkettoestablishalevelplayingfield,andimprovingtheenforcementofitsFTAs.Finally,thepaperhasstressedtheneedfortheEUtocontinuetoengageinternationally,expandingandmodernisingitsFTAsandrecentringEUtradepolicyaroundfewertoppriorities.Inadvancingitsinternationaltradeagenda,theEUshould

initiativetoensurefreeflowofessentialgoods;andEuropeanCommission(2020),IntroductorystatementbyCommissionerPhilHoganatInformalmeetingofEUTradeMinisters58EuropeanCommission(2020),EUand15WorldTradeOrganizationmembersestablishcontingencyappealarrangementfortradedisputes,https://ec.europa.eu/commission/presscorner/detail/en/ip_20_538

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communicateclearlytoitstradepartnersthatitremainsopenforbusinessandaimstomanageeconomiclinksbasedonrules,fairnessandreciprocity.ThecurrentCOVID-19crisiswillforceEuropeandothermajorglobalactorstorethinktheirapproachtoglobalchallengesandinterdependence.Adaptingtradeandinvestmentpolicieswillbeakeypartofthisprocessandthatwillrequire,dependingondifferenteconomicsectors,diversifyingsuppliersandenhancingresilience.Thesemeasures,however,shouldnotbeaimedtoachieveautarkyoracceleratede-globalisation,buttoavertitbytacklingproblemswhilepreservinginternationalcooperationandopen,rules-basedtrade.Anefficientresponsetothecrisisshouldinclude,inthefirstinstance,scrappingtraderestrictionsformedicalequipmentandcriticalgoodsandservices.Inthelongerterm,allcountriesshouldjoinforcestoagreeoncommonmultilateralrulesforsustainabletradeincludingadequatehealthandenvironmentalstandards.Otherwise,weallfacethehighcostsofamore

fragmented,andthusmorevulnerable,globaleconomy.TheEUshouldplayacentralroleinreformingglobalisationandglobaltradegovernancebytakingmorestrategicand,wherenecessary,autonomousaction.JohanBjerkemisaPolicyAnalystwiththeEuropeanPolicyCentre

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TheKonrad-Adenauer-Stiftunge.V.isaGermanpoliticalfoundationwithforeignofficesacross theworld.Through itsactivitiesandprojects, theFoundationaims toactivelyand sustainably contribute to international cooperation and understanding. TheEuropeanOffice inBrussel,which also functions as a regional office for theBeneluxcountries, particularly aims at supporting the European integration process and thedialoguebetweentheMemberStates.TheEuropeanPolicyCentre(EPC)isanindependent,not-for-profitthinktankdedicatedtofosteringEuropeanintegrationthroughanalysisanddebate,supportingandchallengingEuropeandecision-makersatalllevelstomakeinformeddecisionsbasedonevidenceandanalysis,andprovidingaplatformforengagingpartners,stakeholdersandcitizensinEUpolicy-makingandinthedebateaboutthefutureofEurope.

This paper is part of the joint EPC-KAS project on “Fostering Europe’s strategicautonomy: priorities for action” that runs throughout 2020 and aims to outline aconcreteagendatostrengthenEurope’sroleintheworldanditssovereignty.

Inanincreasinglycompetitiveandvolatileinternationalenvironment,Europeneedsastrongerpowerbasetoupholditsvaluesandinterests,confrontchallenges,engagewith partners, and support rules-based cooperation. To attain these goals, theEuropeanUnion needs to become amore strategic and autonomous actor on theglobalstage.

PursuingstrategicautonomyisultimatelyaboutempoweringEuropeanstotakeandimplementdecisionstoadvancetheirpriorities incooperationwithothers,wherepossible, and on their own, if needed. This is essential to reinforce Europeansovereignty–Europe’sabilitytoshapeitsfuture.

Progress towards strategic autonomy requires concerted action across variousdomains,includingEurope’seconomicpowerbase,technologyandinnovationandsecurity and defence. This project encompasses activities targeting each of theseareas,withaviewtodefiningprioritiesforactionforEuropeinachallengingglobalcontext.