Globalisation without regulation leads to increased inequality, says EESC

Fostering competitiveness, innovation and job creation should be a priority in global regulatory cooperation through a renewed multilateral trading scheme, says the European Economic and Social Committee (EESC) in its opinion, initiated by Georgi Stoev and Thomas Student and adopted by the EESC plenary in July.

Disruptions like coronavirus (COVID-19) threaten to bring the world economy and social life to a standstill. Its impacts include recessions in the USA, the EU, Japan and other regions of the world, extremely slow growth in China and huge losses in terms of output. Governments have to offset economic damage with fiscal and monetary policies and cope with the expected changes to the economic paradigm. The EESC stresses the need for efficient business models and trade defence mechanisms.

 In particular, with regard to Asia, 36 million jobs in the EU depend on the EU's exporting potential, and the share of EU employment supported by sales of goods and services to the rest of the world in relation to total employment increased from 10.1% in 2000 to 15.3% in 2017. The fiscal, economic and social response to the crisis is necessary for preventing a negative impact on these and other sectors.

The fact that the USA decided to introduce additional tariffs on European products, as a countermeasure to the aid granted by the EU to the manufacturer of Airbus, will mainly affect agricultural and agri-food products produced in EU Member States. The US steel tariffs have led to significant trade diversion of steel products from third countries, which are entering the European market in increasing quantities, and are in particular being used in public infrastructure construction contracts.

Industrial development in Europe must not fall victim to unfair economic, social & environmental dumping. This could become a real threat for European industries and for the European social model," said the rapporteur of the opinion Georgi Stoev. We are concerned about the negativity regarding international trade and globalisation and the rise of populism. Protectionism and nationalism cannot provide answers to economic and social problems, he concluded.

The EESC stresses that this crisis has serious long-term implications for the EU.

Europe urgently needs a new project for internal integration; a common economic, social (including public health coordination), fiscal, energy and environmental strategy and a coherent trade policy, said the co-rapporteur Thomas Student.

The EESC believes that the Green Deal should integrate new industrial strategy and trade policy together with economic, regulatory and competition policy in a comprehensive effort to help the environment, without creating a threat to the single market and European companies and jobs, and should set high environmental ambitions for industry as a whole.