Europe Urged to Adopt a More Assertive Stance in Global Trade
France’s Minister for European Affairs, Benjamin Haddad, has issued a strong call for the European Union to employ every available resource to safeguard its economic interests against aggressive foreign trade practices. His remarks come at a critical juncture as the EU grapples with a significant influx of Chinese imports that threaten to undermine European industries.
Speaking on Euronews’ interview program, 12 Minutes With, Haddad emphasised the importance of international trade law but stressed that adherence must be coupled with strength and the ability to command respect. “You have to be able to defend your interest and use all the tools that you can leverage, especially to impose the very basic principles of fairness and reciprocity,” he stated.
When questioned about the EU’s perceived slowness in responding to the erosion of international trade rules, Haddad conceded, “Yes, I think so, because I think that we (Europeans) are still sometimes the last evangelists of a religion that no one is practising anymore.” He specifically referenced the “religion of unfettered free trade of the WTO (World Trade Organization), which clearly China and the US have abandoned a long time ago.”
The European Commission, under President Ursula von der Leyen, is reportedly set to deliberate on more stringent measures to counter Chinese trade practices. These practices are seen as posing a substantial risk to Europe’s industrial base and market share. Discussions on this pressing issue are expected to continue when EU leaders convene for a summit in Brussels in mid-June.
Ahead of these high-level discussions, a coalition of five EU member states, including France, Italy, and Spain, has formally requested the EU’s executive body to explore the use of tariffs and other protective measures. While not explicitly naming China, the directive signals a growing concern over foreign trade policies impacting the bloc.
Mounting Concerns Over China’s Trade Dominance
The concerns voiced by these member states stem from a range of issues, including China’s significant industrial over-capacity, its extensive use of state subsidies, and its control over crucial raw materials. China’s increasing dominance in strategic sectors, from essential raw materials to advanced technology, is seen as a means to consolidate political influence over its global competitors.
However, the EU has struggled to forge a unified front on this matter. Some member states, notably Germany, have historically been hesitant to adopt a confrontational approach towards Beijing, fearing potential repercussions for their vital trading relationship.
Acknowledging the Need for a Shift in Strategy
Minister Haddad expressed optimism that a broader realisation is dawning across Europe regarding the need for a more robust trade strategy. “There’s a realisation that’s coming across everywhere in Europe, that for a long time we thought it was safe to export to China. And now we see, on the contrary, that (…) technological know-how is increasing in China with the support of the state,” he observed.
He underscored the strength of the EU’s single market, asserting that its true potential can only be unlocked if the bloc is prepared to leverage it effectively. “We have a strong single EU market; there’s every reason to be optimistic about the power that a single market can represent, but only if we’re able to leverage it. And we have all the tools at our disposal (…) So now the key is not to be naive, look at what others are doing and protect ourselves as well.”
Recent studies have highlighted the detrimental impact of foreign competition, coupled with sluggish demand and escalating energy costs, on European industries. One report indicated that German industry could have lost as many as 124,000 jobs by 2025, with the automotive sector being particularly hard-hit.
Rethinking EU Economic Doctrine: Joint Borrowing and Strategic Investment
In February, French President Emmanuel Macron advocated for a fundamental reset of the EU’s economic doctrine by June, proposing increased joint borrowing at the EU level as a cornerstone of this new approach. However, geopolitical events, such as the conflict in Iran and the potential closure of the Strait of Hormuz, have introduced global economic instability, potentially hindering Europe’s competitiveness agenda.
Traditionally, a group of EU member states, often referred to as the “frugal” nations, have opposed increasing common debt, especially given current fiscal constraints and rising national debt levels.
Despite these reservations, Haddad championed joint borrowing as an essential mechanism for Europe to regain its competitive edge. He pointed to strong market demand for assets from the European Union, characterising it as a “reliable, trusted financial partner.”
“And I think when you look at areas like defence, like space or like AI, where we’re under-investing, we’re under-leveraged compared to the US, this is where it would make sense indeed to once again borrow on the markets and inject investment massively to support our own innovators, our own companies,” he argued.
Haddad also acknowledged that a coalition of like-minded countries could advance collective borrowing initiatives without necessarily requiring the unanimous approval of all 27 member states. “I think when you have a core group of member states that want to move forward, and that want to deepen their integration and cooperation on these issues, then, at some point, we should be able to move forward and create momentum for others to join.” This suggests a potential pathway for a more agile and integrated approach to strategic EU investments.
