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1841. The EU as a Maritime Security Provider

Author:
Eva Pejsova
Publication Date:
12-2019
Content Type:
Policy Brief
Institution:
European Union Institute for Security Studies
Abstract:
Maritime security is one of the fundamental strategic interests of the European Union. Then HR/VP Federica Mogherini reiterated this fact at the conclusion of the informal meeting of EU defence ministers in Helsinki at the end of August 2019, adding that there was a ‘growing demand for an EU role as a maritime security provider not only in our region, but also further away’ – especially in Asia and the Indian Ocean. As a global trading power, the EU is vitally dependent on free, open and safe maritime shipping: 90% of its external and 40% of its internal trade is seaborne. The value of goods transported by sea is 1.8 times higher than that of goods transported by air and almost three times higher than that of goods transported overland.1 In 2018 alone, the value of trade between the EU and Asia, home to its main economic partners, reached €1.4 trillion, with 50% of it transiting through the Indian Ocean. As a result, the EU has a vested interest in a secure maritime domain and it is only natural that it should contribute to its preservation, especially in waters connecting it to its main economic partners in Asia. It is also natural that Asian countries want to see Europe becoming more proactively involved in addressing the many maritime security challenges – both traditional and non-traditional – in the Indo-Pacific, especially given its aspiration to play a greater security role in the region. The question is: can the EU perform such a role? How realistic is its ambition to become a maritime security provider in the region and how might it go about accomplishing this? The purpose of this Brief is to look into why, where and how Europe could contribute to improving the maritime security environment in the Indo-Pacific. A closer look at the current situation and the multitude of maritime security challenges facing littoral states in the region reveals several niches that the EU could fill. Analysing the Union’s key attributes and achievements in the maritime security field, the Brief identifies features and capacities that can effectively add value to regional security and stability.
Topic:
Security, Governance, European Union, Navy, and Maritime
Political Geography:
Europe and Indo-Pacific

1842. How Do Technical Barriers to Trade Affect Foreign Direct Investment?

Author:
Mahdi Ghodsi
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Trade liberalisation and the EU enlargement in the past two decades allowed European multinational enterprises (MNEs) to benefit from production fragmentation in Central, East and Southeast Europe (CESEE). Recent studies show that market regulations and standards that are embedded within Technical Barriers to Trade (TBTs) might not necessarily hamper trade but improve the quality of products, production procedures, and market efficiencies. However, complying with the regulations embedded in the TBTs imposed by a host country might be costly enough to discourage MNEs from investing there. Furthermore, MNEs from countries that impose more regulations and standards might be more capable of investing abroad. This article analyses how TBTs imposed by both home and host countries affect inward FDI stocks in the CESEE countries during the period 1996-2016. The results suggest that Specific Trade Concerns (STCs) raised on trade-restrictive TBTs imposed by CESEE countries induce ‘tariff jumping’ motives of investment to these countries, while regular TBTs as indications of positive externalities and efficiency gains at home discourage outward FDI. Besides, FDI stocks by non-EU28 countries are found to be stimulated by regular quality TBTs imposed by the host economies.
Topic:
International Trade and Finance, Foreign Direct Investment, European Union, Regulation, and Tariffs
Political Geography:
Europe

1843. Testing the Smile Curve: Functional Specialisation in GVCs and Value Creation

Author:
Roman Stöllinger
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
According to the ‘smile curve hypothesis’ the potential for generating value added varies significantly across the various functions along a firm’s value chain. It suggests in particular that the production stage is the least promising value chain function in the entire manufacturing process. This logic implies that countries specialising as ‘factory economies’ are likely to generate comparatively little value added. To shed light on the relationship between functional specialisation along the value chain and value creation, this paper develops measures for functional specialisation derived from project-level data on greenfield FDI for a global sample of countries. These measures keep the industry and the functional dimension of specialisation strictly apart. They are used to test econometrically the negative relationship between value added creation and functional specialisation in production as predicted by the smile curve hypothesis.
Topic:
International Trade and Finance, European Union, Economy, NAFTA, Manufacturing, and Global Value Chains
Political Geography:
Europe and East Asia

1844. Financial Cycles in Europe: Dynamics, Synchronicity and Implications for Business Cycles and Macroeconomic Imbalances

Author:
Amat Adarov
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Using dynamic factor models and state-space techniques we quantify financial cycles for twenty European countries over the period 1960Q1–2015Q4 capturing imbalances across credit, housing, bond and equity markets. The paper documents the existence of slow-moving and persistent financial cycles for all countries in the sample, many of which also exhibit high cross-country synchronicity. Spillover analysis points at the significant role the global financial cycle and a common latent region-specific factor, the European financial cycle, play in shaping national financial market dynamics. Estimations using Bayesian panel VAR models to assess interactions between external and internal macroeconomic imbalances suggest that financial cycles are an important driver of business cycles and public debt dynamics, with much stronger shock transmission observed in the euro area and systemic European economies.
Topic:
European Union, Finance, Business, Economic Growth, Macroeconomics, and Financial Stability
Political Geography:
Europe

1845. WILL WITHDRAWING TIES TO VENEZUELA’S REPRESSIVE REGIME PROTECT OR HARM HUMAN RIGHTS?

Author:
Gina Lei Miller, Andrew Vonasch, and Ryan Welch
Publication Date:
01-2019
Content Type:
Commentary and Analysis
Institution:
Political Violence @ A Glance
Abstract:
Food and medicine shortages, hyperinflation, and severe debt all loom large over Venezuelans—those who remain in the country anyway. Over 2 million citizens have fled the country since 2014. Those who cannot or do not wish to leave face yet another challenge to their health and wellbeing: an increasingly authoritarian and repressive government. In 2017, the world responded to the crisis in Venezuela by withdrawing ties to the regime. The Mercosur trade bloc suspended Venezuela, and the country currently faces expulsion from the Organization of American States (OAS). Both organizations cite anti-democratic policies and human rights abuses as grounds for the country’s suspension and possible expulsion.
Topic:
Foreign Policy, Diplomacy, Human Rights, United Nations, European Union, and Repression
Political Geography:
Europe, Iran, North Korea, South America, and Venezuela

1846. Iran Looking East: An Alternative to the EU?

Author:
Annalisa Perteghella
Publication Date:
11-2019
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
In February 2018, anticipating the US withdrawal from the JCPOA, Iran’s Supreme Leader Ayatollah Ali Khamenei declared a policy of “preferring East over West”, thus paving the way for deeper cooperation with Asian powers such as China, Russia, and India. Differently from the “Look East” policy promoted during the presidency of Ahmadinejad (2005-2013), the current Iranian strategy is not only functional to escape the US-led isolation, but it rather seems devoted to the consolidation of a block of power which can commit to security and economic schemes in alternative to the Western-dominated ones. This ISPI report aims to answer few crucial questions: Which are the major initiatives promoted within the Iran’s “Look East 2.0” strategy? To what extent will Tehran succeed in creating a solid Eastern block? What will be the influence of the wider geopolitical context? And finally, what role is left for the EU?
Topic:
Security, Nuclear Weapons, Treaties and Agreements, European Union, Economy, and JCPOA
Political Geography:
Russia, China, Europe, Iran, Middle East, and India

1847. Europe in Identity Crisis: The Future of the EU in the Age of Nationalism

Author:
Carlo Altomonte and Antonio Villafranca
Publication Date:
12-2019
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
Today’s European Union is in an identity crisis as it seems to be losing its points of reference. The principles that upheld its creation are being increasingly questioned around the world and within the EU itself. Its chances to survive hinge upon its ability to deliver at home and abroad, without abandoning its values and principles but rather adapting and re-launching them. This volume offers policy options on key questions for the future of the EU: How to scale-up its role abroad? How to benefit from new partners without severing ties with traditional allies such as the US? How to contain Eurosceptic forces by reducing inequalities? And how to reinforce the euro while aiming at more sustainable and balanced growth?
Topic:
Nationalism, European Union, Economic Growth, Multilateralism, and Identity
Political Geography:
Europe

1848. From Research to Market:What the EU can learn from the USA?

Author:
Jekaterina Novikova
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
The research project “From Research to Market: What the EU can learn from the USA” addresses the gap between the laboratory research and market. I examine how government, universities and private companies facilitate the transition of research results to market in the USA. In the report I present various programs that are available to the researchers and entrepreneurs in the US and invite to consider them for implementation in Europe. I argue that different stages of lab-to-market transfer require different mechanisms that should not be limited to funding but include technology transfer assistance and advice on intellectual property, mentoring by peers and industry mentors and access to the laboratory space and incubators. I conclude that the Bay Area answer to closing the lab-to-market gap is by a combination of support mechanisms that reinforce and complement each other, when implemented simultaneously. I invite to discuss which of the US initiatives and programs described in this report shall be promoted in Europe and at which level.
Topic:
Science and Technology, Governance, European Union, and Research and Development
Political Geography:
Europe, North America, and United States of America

1849. Ten years after EULEX: Key principles for future EU flagship initiatives on the rule of law

Author:
Naim Rashiti
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
With its “credible enlargement perspective for and enhanced EU enlargement with the Western Balkans”, the EU plans to launch several new flagship initiatives for the six aspiring countries. The key initiative envisaged is “to strengthen rule of law” through more detailed assessment of the rule of law and reform implementation by including case-based peer reviews, trial monitoring of serious corruption cases and organised crime, developing indicators for reform implementation and deploying advisory missions. The EU has begun some planning but detailed action plans are yet to come. New programmes and initiatives should be new in content and form. In the case of Kosovo, things are more complex; the clarity of the new plan and drawing the line between the past and future is key for any success of the upcoming initiatives. With EULEX still on the ground, after 10 years of deployment, plagued by low trust and an image of failure, the rule of law has little improved in Kosovo. The EU should carefully consider the conditions upon which new initiatives are established. Equally, local authorities need to be fully in the driving seat. Reluctant to do so until now, the government has recently initiated a Functional Review of the Rule of Law Sector and Justice 2020. Their agendas have not progressed much in the absence of political will, and undefined roles and agendas remain between the local authorities and EU. Any new initiatives should be launched based on certain principles that ensure they have full local ownership, are driven by local demand, are based on in-depth evaluation and verification, build upon broad consultations and inclusion, have a clearly defined role and scope, have realistic expectations and contribute to streamlining the reform agendas.
Topic:
Reform, European Union, Rule of Law, and Regional Politics
Political Geography:
Europe

1850. The EU’s re-engagement with the Western Balkans

Author:
Erwan Fouéré
Publication Date:
01-2019
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
2018 was dominated by deep divisions among the EU member states despite the great expectations set by the European Commission’s February 2018 strategy paper. A major effort will now be required to restore credibility to the EU’s enlargement agenda and ensure a genuine re-engagement with the Western Balkans. It will be up to the new Commission to regain a leadership role and give the integration of the region into the EU the priority it deserves.
Topic:
Foreign Policy, European Union, Regional Integration, European Commission, Regional Politics, and Strategic Engagement
Political Geography:
Europe and Balkans