Main takeaways from EU Trade Chief's web talk: The deepest economic recession in EU history

EU

Trade Commissioner Hogan at webex held on 6th May 2020 on role of internal trade in EU economic recovery. On 6th May 2020, Commissioner for International Trade Phil Hogan held an exchange with civil society on line.

The main takeaway from the Intervention of Commissioner Hogan on 4th May 2020 are below: In his introduction, Commissioner Hogan reiterated the role of International trade a critical for the EU economic recovery. He also mentions the EU shall learn the lessons for the EU trade policy in the future.


The EU Economy under COVID-19: The deepest economic recession in its history.

  • Commissioner Hogan recalled the recent analysis performed by DG TRADE’s Chief Economist: 9.7% decrease in global trade for 2020.

  • For the EU27, the predicted COVID19-related economic contraction results in a reduction of 9.2% in extra-EU27 exports of goods and services, and an 8.8% decrease in extra-EU27 imports in 2020.

  • In absolute terms, compared to the latest available statistics, this amounts to a reduction of exports by about 285 billion EUR and by 240 billion EUR in extra-EU imports (goods and services combined).

  • It is now quite clear that the EU has entered the deepest economic recession in its history. The EU economy is expected to contract by a record 7.4% this year, 7.7% in the euro area. More than in 2009, where the contraction was around 4.5%. In 2021 we expect a rebound of 6.1% in the EU and 6.3% in the euro area – not enough to fully make up for this year's loss.

  • World economy is in profound chock and rely on global trade to provide critical goods like medical devices and food.

  • Commissioner recalled that international trade is important for SMEs- representing 87% of exports in the EUTrade is also import and essential for the EU; EU single market is in itself an illustration of this.

  • Commissioner recalled that self-sufficiency is not an option and need import while the EU will need to check the need to re-localise in vulnerable sectors in particular in the medical sectors.

  • Roadmap for recovery from the Commission will aim to reduce trade where the EU is vulnerable and build up resilience in the EU.

  • The EU is advocating a model of open-strategy autonomy.


EU and US trade cooperation

  • EU is still committed to greater transatlantic trade relations and has identified areas where the EU and USA can work together.

  • Commissioner Hogan sent a letter recently to the US and wait for answer from USTR - so can reinitiate trade agenda with USA.

  • Reforming WTO to be more efficient is also one of the aim. Commissioner reiterated that the EU need to do more here in terms of implementation and for SMEs.

  • Commissioner Hogan stressed that tariffs do not work to re-launch the economy but on the contrary, they lead to reduction of activity and reduce jobs - “we should be doing the opposite, open the economies to re-launch the EU economy” he said.


EU-UK trade deal

  • On the EU - UK Trade deal, Commissioner stressed that South Korea communicated that they will check first the outcome of the EU-UK FTA before finalising the EU-South Korea FTA. We can expect the same for the US - “in trade, seize matter”, Commissioner Hogan highlighted.

  • He further stated that the EU need to continue with global supply chain and continue to import while some areas we need to check - he specifically mentioned dependence with China and India for medical equipments which shall be readjusted.

  • On Internal trade barriers Commission is talking to member states which have put some barriers, so that they remove trade restrictions - if not, Commission will look at infringement - Commission strong stance on single market

  • On the French and NL non-paper that calls for stricter enforcement of TSD chapter (and therefore tariff reduction Implementation only when TSD implemented, Commission said they will look at the paper - all interesting ideas are welcome.

  • Commissioner Hogan confirmed that the Commission is assessing its work program in view to finalise it end of the year to take account of Covid-19.


Source

See the retransmission on YouTube


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