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61. How the rest of the world responds to the US-China split

Author:
Hung Tran
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The election of Joe Biden as the forty-sixth US president is not expected to change the list of substantive issues dividing the United States and China, such as trade, investment, technology, geopolitical competition, national security, and human rights—except that the priority among them may change, with human rights concerns moving more to the forefront. However, the tone and modality of the unfolding of the US-China competition will change from Donald Trump’s unilateralism to Biden’s efforts to build alliances with “likeminded” countries in Europe, Asia, and elsewhere to deal with the challenges China has posed. In a way, Biden’s alliance-building approach may intensify pressure on the rest of the world to take sides. How countries respond to this challenge, unwelcome by most, depends on whether they see themselves as competitors to China, or as “price takers” in the international economic system.
Topic:
Global Markets, Regulation, Finance, Economy, Trade, and Digital Policy
Political Geography:
China, Europe, Asia, North America, United States of America, and Indo-Pacific

62. Transatlantic tools: Harmonizing US and EU approaches to China

Author:
David Barkin and Agatha Kratz
Publication Date:
11-2021
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
Close cooperation between the United States and the European Union is essential if advanced economies are to develop effective responses to the array of challenges presented by China. Washington and Brussels share concerns regarding competitive distortions arising through the state’s role in the Chinese economy, the use of advanced technologies to repress ethnic minorities and fuel its military, and the spread of authoritarian influence through the Belt and Road Initiative (BRI). However, there has been a lack of coordination and cooperation in recent years between the US and EU when it comes to responding to China’s policies and behaviors. Washington’s focus on risks to US economic and national security contrasts with an emphasis in Brussels on ensuring reciprocity and leveling the economic playing field. But, with the transatlantic relationship back on a better footing under the Biden administration, new structures for transatlantic dialogue being put in place, and a greater focus on the Indo-Pacific in both Washington and Brussels, this paper argues there is now an opportunity for the United States and Europe to learn from each other and harmonize some of their China-related efforts.
Topic:
Human Rights, Markets, Sanctions, European Union, Regulation, Trade, and Transatlantic Relations
Political Geography:
China, Europe, and United States of America

63. Ups and Downs in Finance, Ups without Downs in Inequality

Author:
Olivier Godechot, Nils Neumann, Paula Apascaritei, István Boza, and Martin Hällsten
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The upswing in finance over the past several decades has led to rising inequality, but do downswings in finance lead to a symmetric decline in inequality? In this paper, we analyze the asymmetry of the effect of ups and downs in financial markets, as well as the effect of increased capital requirements and the bonus cap on national earnings inequality. We use administrative employer–employee linked data on earnings from 1990 to 2017 for twelve countries. Additionally, we use data on earnings from bank reports, from 2009 to 2017 in thirteen European countries. We find a strong asymmetry in the effects of financial ups and downs on earnings inequality, a mitigating effect of rising capital requirements on the contribution of finance to inequality, and a restructuring effect of the bonus cap for the earnings of financiers, while neither policy affects absolute levels of earnings inequality.
Topic:
Financial Crisis, Regulation, Inequality, and Finance
Political Geography:
Europe

64. Will industrial and agricultural subsidies ever be reformed?

Author:
Gary Clyde Hufbauer
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Open Sub-navigation BackOpen Sub-navigation Publications Back Policy Briefs Working Papers Books PIIE Briefings Open Sub-navigation Commentary Back Op-Eds Testimonies Speeches and Papers Topics & Regions PIIE Charts What Is Globalization? Educational Resources Open Sub-navigation Back Senior Research Staff Research Analysts Trade Talks Open Sub-navigation Back RealTime Economic Issues Watch Trade & Investment Policy Watch China Economic Watch North Korea: Witness to Transformation 中文 Open Sub-navigation Back All Events Financial Statements Global Connections Global Economic Prospects Stavros Niarchos Foundation Lectures Trade Winds Open Sub-navigation Back News Releases Multimedia Media Center Open Sub-navigation Back Board of Directors Staff Employment Contact Annual Report Transparency Policy POLICY BRIEF VIEW SHARING OPTIONS Will industrial and agricultural subsidies ever be reformed? Gary Clyde Hufbauer (PIIE) Policy Brief21-5 March 2021 Photo Credit: REUTERS/Denis Balibouse One economic argument for government subsidies is that they are necessary to compensate firms and industries for benefits they provide to society at large but cannot capture in the prices they charge for goods or services. For example, subsidies to renewable energy are defended because renewable energy limits carbon emissions. When a major economy subsidizes extensively, however, its trading partners are drawn into the game, with losses all around. As the prisoner’s dilemma suggests, a better outcome would entail mutual restraint. But the goal of mutual restraint is no less difficult in international trade than it is in international arms control. Both the European Union and the US federal system try, in different ways, to regulate industrial subsidies. Hufbauer examines efforts to contain unjustifiable subsidies and proposes modest improvements, bearing in mind that as countries struggle to overcome the global economic downturn resulting from the COVID-19 pandemic, there is little appetite for restoring a free market economy—one in which firms compete with minimum government assistance or regulation. Selective upgrading of the rulebook may nevertheless be possible.
Topic:
Agriculture, Government, Reform, European Union, Regulation, Manufacturing, Industry, COVID-19, and Subsidies
Political Geography:
Europe, North America, and United States of America

65. EU Proposes Artificial Intelligence Regulation

Author:
Oskar Szydłowski and Stefania Kolarz
Publication Date:
06-2021
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
The proposed regulation of artificial intelligence (AI) on the EU market is primarily intended to protect fundamental rights and values. As the first regulation of this type in the world, it may set the standard. However, the new requirements in practice might hinder the access of foreign entities to the internal market and reduce the competitiveness of EU businesses.
Topic:
Markets, European Union, Regulation, Artificial Intelligence, and Strategic Competition
Political Geography:
Europe

66. Russian pipelines and EU energy security: Utilizing the externality elements of the EU’s regulatory framework

Author:
Michalis Mathioulakis
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
Russia and the EU have been entangled in the harsh effects of asymmetrical interdependence and the security threats it generates. Russia’s economy is linked directly to the form and volume of trade directed from the EU towards the Russian economy, while the EU economy is linked to the flow of Russian gas and oil directed towards European businesses and households. Growing concerns on EU’s dependency on energy imports led the European Commission to release its Energy Security Strategy (2014), aiming to secure stability and abundancy of energy supply while simultaneously examining the effects of discrepancies from Russian gas imports to the European energy systems. In contrast, Russia’s primary concern is to secure the necessary energy revenues that could enable Moscow to project and exercise its hard power to areas with strategic interest by striving to gain greater leverage within the European energy markets. Russia’s security objectives in relation to its energy export capacity are expressed primarily through materialisation of two major natural gas pipeline systems, namely the Nord Stream 2 and the TurkStream pipelines. This paper by Michalis Mathioulakis, Research Associate of ELIAMEP; Energy Strategy Analyst and Academic Director of the Greek Energy Forum, examines the strive between the two international actors in redetermining their future relations and the role of Russian gas pipelines and the EU’s regulatory framework in shaping the two actors’ common future.
Topic:
Security, Energy Policy, European Union, and Regulation
Political Geography:
Russia, Europe, and Eurasia

67. Protecting data, ruling over the algorithm: The Regulation Challenge for the European Union

Author:
George Pagoulatos and Vasiliki Poula
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The European Union has managed to reposition data protection laws from the periphery of legal consciousness to the centre of intensive legal and media publicity. And it has done so, primarily, through the enactment of the General Data Protection Regulation Act (GDPR) and its related case law. In particular, the legal saga of Schrems ΙΙ has recently confirmed the regulatory capacity of the EU. However, while the European legal order has led the way in codifying the unknown territory of new technologies, there is still the concern that the EU is handling the new challenges in a “legalistic” way. In particular, we explore the persistent challenge of the exploitation of data in the commercial and political context through microtargeting. We also explain why algorithmic regulation should become a priority in the EU’s regulatory agenda, so that the EU adopts a pre-emptive rather than a firefighting role. Ultimately, we have to also be aware of the limits of regulation in an era of constantly evolving technology: finding ways to live with technological evolution should also be an EU priority.
Topic:
Science and Technology, European Union, Regulation, and Data
Political Geography:
Europe

68. Emerging Europe and the capital markets union

Author:
Alexander Lehmann
Publication Date:
09-2020
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The European Union’s capital markets union (CMU) plan is in urgent need of a revamp. Because of Brexit, EU capital markets and supervision need to become more integrated. The ongoing deep recession increases the need for equity finance mobilised by capital markets. The eleven EU countries in central and south-eastern Europe which joined the EU in 2004 and after (EU11) are particularly affected by the ongoing consolidation of exchanges, which has diminished liquidity in smaller markets and in the traded securities of mid-sized companies. Corporate funding remains even more bank-dependent in the EU11 than in the rest of the EU. Equity capital, whether in the form of listed shares or directly supplied by investment funds, is particularly underdeveloped. Even though the sustained and superior growth record in the region compared to the rest of the EU should be a magnet for investors, cross-border exposure to traded equity in the region remains very limited. To gain broader acceptance in all EU countries, CMU will need to support more forcefully funding for small and medium enterprises (SMEs), and foster market integration throughout the single market, including outside the euro area. The immediate priorities for the EU should be to revise market regulation and facilitate capital market access by smaller firms. Lighter standards in dedicated SME markets should be widened for newly-listed companies, but should not be available to more mature listed companies. In this way, high standards of transparency and integrity, which have been bolstered by post-financial crisis regulation, will be preserved. The EU11 countries need to embrace corporate governance rules and greater transparency of company financial data, which would facilitate equity finance. They must also attract investors who will seek disclosure of environmental, social and governance performance of issuers. Much could be done to foster liquidity on national exchanges, including by embracing the inevitable further consolidation of exchanges and other infrastructure.
Topic:
Markets, European Union, Regulation, Finance, Business, Capital, Corporate Governance, and Private Equity
Political Geography:
Europe

69. Do We Need an EU Ethical Food Label?

Author:
Giorgia Ceccarelli and Daniele Fattibene
Publication Date:
09-2020
Content Type:
Special Report
Institution:
Open Society Foundations
Abstract:
Eradicating the exploitation of agri-food workers, promoting fairer food supply chains, and offering consumers effective tools to make truly informed food choices remain huge challenges in Europe. This report highlights the limitations of relying solely on food labelling schemes to meet these goals, and finds that voluntary certification schemes do not adequately enforce regulations or protect human rights. The report also argues, however, that the EU can use a number of tools to foster more just food supply chains, with ethical labels playing a role in that process as part of a “smart mix” of measures. The case studies in this report show that it is possible to have increased transparency in food labelling and supply chains, as well as better protections of workers in Europe and throughout the world. Additionally, the report explains how the EU can play an important role in providing food businesses with clear regulatory frameworks to ensure their operations do not harm workers or the environment.
Topic:
Environment, Health, Human Rights, Labor Issues, Food, Regulation, and Business
Political Geography:
Europe

70. Innovation and Less Harmful Alternatives to Tobacco: The Case of Nicotine Pouches Regulation

Author:
Christofer Fjellner
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
For some years now, tobacco-free nicotine pouches – a tobacco-free version of pre-portioned snus – have been available on the Swedish market. Although the use of the product is increasing and is marketed outside Europe, nicotine pouches are not subject to any specific product regulation – neither in Europe nor elsewhere, but we will most certainly see new regulation adopted in all important markets in the coming years. The interest in harm reduction as an approach to tobacco prevention and the concern about nicotine dependence will be two decisive factors for how legislators decide to regulate nicotine pouches. Sweden and Norway will most likely be the first countries with specific product regulations for nicotine pouches. They can also influence how other European governments will shape the regulation. The EU will most probably regulate nicotine pouches under the scope of the TPD. However, this will not happen in the near future. An indication of how the European Commission views nicotine pouches can probably be found in the implementation report for the TPD that is to be presented in May 2021. How the EU chooses to regulate nicotine pouches is influenced by at least three factors: Whether EU Member States calls on the EU to ban nicotine pouches, due to concern about the use of the product in Member States (which was the reason for the EU ban on snus). Whether there are already specific product regulations or national bans in individual Member States that new European legislation may be in conflict with. The number of users of nicotine pouches, and thus a public opinion critical to a new restrictive legislation or ban. This was one of the reasons e-cigarettes were not banned in the 2014 TPD revision. Action taken by manufacturers will influence how legislators will react. Strict self-regulation and dialogue with authorities can reduce the desire among some to opt for very hard regulations. Irresponsible marketing or sales can quickly raise demands for bans. The way the EU regulated e-cigarettes in 2014 may give an indication of how the EU will regulate nicotine pouches in the future. This would indicate a focus on warning texts and introducing a strict maximum nicotine level. Future regulation of nicotine pouches in the EU may leave considerable room for further regulation by Member States, and even national bans. This is true today for both traditional tobacco products and e-cigarettes in the EU.
Topic:
International Political Economy, European Union, Regulation, and Public Health
Political Geography:
Europe