As highlighted in the reports by Mario Draghi and Enrico Letta on the future of Europe’s economy and the Single Market, Europe’s trade policy needs to adapt to an ever-more complex geopolitical landscape to maintain EU’s long-term competitiveness. Following the Antwerp Declaration, Cefic published a position paper which calls for a carefully balanced EU trade policy resting on four principles: free, fair, sustainable, and resilient.
The EU chemical sector is a net exporter, with a trade surplus of 35 billion euros in 2023. In a global chemicals markets growing primarily outside the EU, this opportunity needs to be seized. At the same time, the sector faces challenges from increasing imports of lower-cost products from non-EU countries, a trend that needs to be addressed to maintain EU’s competitiveness. Europe’s trade policy should be closely aligned with the broader industrial strategy to sustain the competitiveness of the chemical industry during its transformation. This will be ever more important as the global order evolves.
Five actions are needed for a free, fair, sustainable, and resilient EU Trade Policy:
- The EU should prioritise opening and deepening access to third-country markets. This involves reducing tariffs and non-tariff barriers, enhancing regulatory cooperation, and fostering mutual trade liberalisation on the bi-, pluri- and multilateral level. promote growth and diversification. By doing so, the EU can promote growth and diversification.
- Addressing market distortions is also essential. The EU must tackle unfair trade practices and market distortions that harm its industries by strategically using its trade instruments. This will help protect EU industries from unfair competition and ensure a level playing field.
- Enhancing economic security and resilience. The EU should focus on improving its economic resilience against trade weaponisation by implementing precise and proportionate measures. The emphasis should be on ‘de-risking’ rather than ‘decoupling,’ using data-driven and risk-based approaches to mitigate risks without severing important trade relationships.
- Improving regulatory cooperation. By facilitating smoother trade relations and reducing non-tariff barriers, the EU can ensure non-discriminatory, transparent, and predictable trade conditions. This will help EU industries compete fairly in global markets.
- Acting in unity is vital for the EU’s trade policy. Strengthening the EU’s ability to act as a bloc by pursuing a trade policy that is not hindered by internal competence struggles between the Member States and the Commission will ensure a more cohesive and effective approach to implement EU trade policy.
By following these recommendations, the EU can create a robust and adaptable trade policy that supports the competitiveness of Europe’s industries and the highly trade-intensive chemical industry in particular in a rapidly changing global landscape.
You may access the Cefic Position Paper here.