Instruments for a Strategically Autonomous, Open Europe

Commission is planning a combination of existing and new instruments to be used to protect European companies from unfair trade practices.4

In view of the global challenges to open markets and fair international trade, the BDI generally supports the European Commission's concept of open strategic autonomy. In particular, the systemic competition with state-led hybrid economies, which increasingly leads to distortions of competition in the EU internal market as well as in third markets, calls for a comprehensive evaluation and – where necessary – adjustment of the EU's economic defense instruments.

Instruments for a Strategically Autonomous, Open Europe

To ensure a level playing field, German and European industry depend on effective and balanced trade instruments. Multilateral, plurilateral and bilateral trade agreements as well as unilateral measures by the EU must be used to work toward structures that enable a level playing field. Trade policy can only be one part of the toolbox. At the same time, it must be ensured that unilateral EU measures, such as the creation of international instruments against illegal subsidies or economic coercion, are oriented toward the interests of an open market economy. EU trade and industrial policy instruments must create an international level playing field without fostering the international trend of increasing protectionism. Rules-based world trade must remain the cornerstone of European trade policy. The EU cannot undermine the rules of the multilateral system but must work to further develop and strengthen them.

International trade and global competition have fostered innovation, new technologies and the wellbeing of Europe's societies for decades. The founding idea of the EU as we know it today was to create interdependencies between economies in the interest of peace and prosperity and to avoid conflict and nationalism. At a time when the global economy is coming under geopolitical and geo-economic pressure, the EU must fundamentally stand for an open, cooperative and multilateral global economy while also pursuing its own strategic interests. Europe needs a strategic and forward-looking trade and industrial policy: one that ensures the continent's future prosperity and economic resilience while focusing on achieving the EU's strategic goals. Acting on one' s own strength is the best way to achieve a level playing field. At the same time, European companies rely on international trade, but continue to face sometimes unfair competition outside of the EU. For German industry, it is important to take advantage of global opportunities, address challenges and minimize risks. This again requires more global cooperation to overcome the current obstacles. However, it also requires an effective toolbox to be able to act in a self-determined and assertive manner.

To ensure compliance with international trade rules and the enforcement of European trade agreements, the European Union needs a balanced set of instruments that can respond to changing conditions in international trade, such as rising international protectionism or the weakening of international organizations, and ensure a level playing field. To this end, the Commission has adapted existing instruments (for example, the EU Enforcement Regulation) to the changing conditions in international trade and has also announced that it will create new instruments (for example, an anti-coercion instrument). The aim is to protect European economic interests.

Defensive instruments, however, can only be an additional way of ensuring a level playing field. The focus of the EU's economic policy must be on strengthening its own economic competitiveness. Only

4 European Commission, Trade Policy Review - An Open, Sustainable and Assertive Trade Policy, 18 February 2021, <https://trade.ec.europa.eu/doclib/docs/2021/february/tradoc_159438.pdf>.