EU competitiveness goes through free trade agreements

Brussels – The single market is a resource to enhance and improve, but on its own, it is not enough. In the name of competitiveness, the European Union must work to increase its capabilities. At the same time, it should continue to work on trade. The 2024 Annual Single Market and Competitiveness Report highlights the need for trade agreements, such as with Mercosur, against which a part of the agricultural world has been protesting.

“Trade is key to the EU’s long-term competitiveness,” according to the document produced by the EU executive. Amid so many unknowns, there is one sure thing: “The EU draws economic and political strength
from its position as the largest trader and investor.” Data in hand, the EU is now “the world’s largest exporter, accounting for 16 percent of global exports” among goods, services, and agri-food products, benefitting the agricultural supply chain, not least the ‘Made in Italy’.

If the European Union wants to maintain economic weight on the international stage, trade cannot be abandoned, it can be revised, but not shelved. So much so that the recommendation in the EU executive’s report states that “The EU should build a more modern network of trade agreements, partnerships, and alliances
while continuing to work on reinforcing multilateral cooperation and open trade.” But without forgetting the single market, for which renewed resolve is needed.

Contrasting with openness to foreign countries, “the EU should deploy trade defense to protect the Single Market when necessary and continuously work to assess and address economic security risks in a complex
environment.” This second part of the trade recommendation is primarily aimed at China, which has been accused of unfair competition and makes alarm bells go off ahead of the U.S. presidential election. A possible return of Donald Trump to the White House could make the United States a new adversary.

That is why, at the same time, there is a need to build industrial capacity that is all-European, to avoid being too much at the mercy of other players. “The single market and industrial policy go hand in hand to sustain the EU’s competitiveness,” stresses Thierry Breton, commissioner responsible for Internal Market and Industry. Reforms to create the enabling environment for investment will be needed in this drive to strengthen the EU from within.

Especially from the perspective of the Green Deal, and thus the translation of the twin green and digital transition into practice, there is a need for the EU and individual member states to “increase the availability of venture capital and venture capital financing and expand innovative companies.” With this in mind, for the Commission’s report, it is imperative to “deepen the Capital Markets Union.”