#1 Has the EU finally found its connectivity strategy?
The European Commission will propose (or rebrand) its connectivity strategy, to be called Global Gateway. Connectivity is a hot topic around the world partly due to China’s Belt and Road Initiative (BRI), which has drawn criticism from Western stakeholders. It took while for the West to find its voice. The EU previously launched a strategy called Connecting Europe and Asia back in 2018, but there were not many tangible outcomes from this initiative. The COVID-19 pandemic gave it a new political push. During the most recent G7 Summit, developed countries agreed to create a new infrastructure plan for low and middle-income countries branded as Build Back Better World. Global Gateway is not only the EU’s way to deliver on this strategy, but the way it was announced also shows that the EU increasingly sees China as systemic rival. Commission President Ursula von der Leyen particularly mentioned that this new strategy is “transparent and values-based” – two points that Western stakeholders often lack in the BRI.
#2 Time to actually do something about strategic autonomy
The geopolitical arena is hypercompetitive. This is why the EU wants to strengthen its strategic autonomy. Enter the European Chips Act (no, not to strengthen potato sovereignty). This will be a strategy to “create a state-of-the-art European chip ecosystem, including production”, so that the EU will not depend on Asian countries, especially those whom it has labelled a systemic rival. The COVID-19 confirmed the EU’s worries. A European Central Bank’s report shows that imports of semiconductors from China have grown fast in recent years, prompting concerns in Brussels. This project will be a good testing ground, as it could also show how feasible it is to reshore production from abroad while reinforcing the trend of deglobalisation.
#3 Where was trade?
Trade did not merit its own paragraph. No mention of new trade deals, which could be interpreted that the political will to conclude new agreements is dwindling. Von der Leyen only mentioned trade in the context of transatlantic cooperation, pursuing trade links with partners in the Indo-Pacific or protecting human rights. On the latter, the Commission will put forward a ban on products in the EU market that have been made by forced labour. Details of the plan are to be seen, but it will be closely linked to the EU’s mandatory due diligence legislation, something which will come before the end of the year. It is likely to be a two-step approach. First, through mandatory due diligence, companies will be liable for possible human rights violations in their supply chains. Then they will be banned from selling any products in the EU market that could have made with forced labour, a violation of human rights. The proposal could also act as an incentive for business to move out of countries with weaker standards than those of the EU.
#4 Green deal on track
No new proposal in sustainability. In the last few months, the Commission has pushed ahead strongly with its green strategy, which has caused a few burnouts in the Brussels bubble. Indeed, the President was very proud that the EU was the first major economy to put forward a concrete plan to achieve climate neutrality by 2050. Now it is time to work on the international stage. She has already called on Japan, the US and China to present concrete climate plans. The COP26 Summit will be a key milestone to look at how ambitious countries are, not necessarily about their plans for 2050, but to what extent will they reduce emissions by 2030.
#5 Sorry Boris, we have moved on.
EU-UK relations did not even make it to the speech. This is in spite of Lord David Frost’s most recent speech in which he is calling for revisiting the Northern Ireland Protocol of the EU-UK deal. He might be worried about the lack of sausages on the UK dining table. But his comments are not making any waves in Brussels, showing that while the EU was sad to see the UK leaving, it has clearly moved on.
By Adam, Consultant at Cambre Associates