Protecting EU firms without protectionism

VIDEO & AUDIO RECORDINGS

EVENT MATERIALS

Presentation by Reinhilde Veugelers

SUMMARY

EU companies are facing a global competitive environment which is rapidly changing, with the danger of turning into a more distorted global level playing field. On the one hand, there is the rapid rise of non-market economies (eg China) with SOEs, state support for private companies & sectors; preferential treatment of national companies in national markets, public support for international expansion of firms. At the same time, there is the rise in market economies of nationalist/protectionist/strategic rhetoric (eg US) to protect their national companies and close their national markets for non-national firms.

What should the reaction of the EU be to these trends? How should it support its companies’ competitiveness on global markets? How open should EU markets be for non-EU firms amidst these trends. A robust innovation and industrial policy is necessary to ensure that Europe, on the back of a better functioning Single Market, can continue to develop its strengths. But do we need more than this? Do we need new policy approaches to prepare for a changing global environment?

The discussion on the policy response is not only politically difficult, but also analytically complex, as it covers a mix of instruments from trade policy, competition policy and industrial policy. Do we need to reform the multilateral trade system, with reciprocity a more prominent component, or do we need to abandon a multilateral trade policy approach altogether and move to bilaterals? Do we need more effective support for EU companies, more targeted to threatened sectors of strategic importance to the EU? Do we need to revise our competition policy rules on state aid to allow for a more strategic industrial policy support? Do we need to revisit our competition guidelines on take-overs, particularly when the acquirer is a non-EU non-market actor in a sector of strategic importance? Is the EU sufficiently coordinating between trade policy, competition policy and industrial policy and between Member States and the EU?