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91. Europe’s De-risking from China: Dead on Arrival?

Author:
Nicola Casarini
Publication Date:
07-2024
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
De-risking ties from China has become a buzzword in European policy circles, amid growing tensions between the West and the Asian giant. While US policymakers and experts continue to focus on the need to decouple ties from Beijing, the concept of de-risking has been largely fashioned in Brussels to avoid the decoupling debate and find a common transatlantic ground. While EU member states have reduced critical dependencies on China to varying degrees, their efforts are resisted by some large companies, local authorities and civil society actors eager to boost ties with Beijing. Recently, several EU governments have been promoting industrial cooperation with China, opening doors to Chinese investments in their territories to boost production of electric vehicles and green technologies. While this form of cooperation brings benefits to Europe’s industrial capacity and competitiveness, it however risks increasing the level of dependency on Beijing, undermining the de-risking strategy being put in place by the European Commission, as well as deepening the rift with the US on how to deal with the Asian giant. Going forward, there is a need for a thorough and frank debate about the EU’s de-risking strategy and its future prospect, also considering a possible return of Trump to the White House.
Topic:
Foreign Direct Investment, European Union, Trade, Transatlantic Relations, Industry, and De-Risking
Political Geography:
China, Europe, and Asia

92. Surviving the War: Russia-Western Balkan Ties After the War in Ukraine

Author:
Maksim Samorukov
Publication Date:
04-2024
Content Type:
Commentary and Analysis
Institution:
Belgrade Centre for Security Policy (BCSP)
Abstract:
Russia’s invasion of Ukraine in February 2022 pushed Europe into a new era of instability. The fundamentals of the continent’s political and economic order are shifting as Russia’s brutal methods of war undermine the prospects of the slightest cooperation between Moscow and European states. Decades-old trade links have been severed, transport corridors rerouted, and people-to-people contacts have become more scarce than ever. Europe is reshaping its security architecture around Russia as the main threat, while Moscow frames its aggression against Ukraine as an existential defensive war with a duplicitous West. The only European region that stands out in this process of growing mutual alienation is the Western Balkans. More than a year into the war, Russia’s relations with several Balkan states appear to have undergone little change. Serbia is eagerly continuing with energy deals with Gazprom, Bosnian Serb leaders frequent Moscow on official visits, and some leading Montenegrin parties are sticking to pro-Russian slogans. It would appear that time stands still in the Western Balkans, with petty local grievances overriding major global developments This publication was produced with the support of the Open Society Foundations (OSF). Responsibility for the content of this publication belongs solely to Belgrade Centre for Security Policy.
Topic:
Foreign Policy, Trade, Regional Politics, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and Balkans

93. Achieving Universal Energy Access in Africa amid Global Decarbonization

Author:
Gracelin Baskaran and Sophia Coste
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
Africa is the most energy-deficient continent in the world, as it hosts 75 percent of the world’s population without access to electricity.[1] Universal access to electricity and clean cooking remains an elusive goal for most states in the region: in 2022, 600 million people lacked access to electricity on the continent, 98 percent of them located in sub-Saharan Africa.[2] There is an urgent need for intervention given Africa’s population of 1.4 billion is forecasted to reach 2.5 billion by 2050, which, when coupled with rising incomes and urbanization, will lead to a significant increase in energy demand.[3] This brief provides six evidence-based insights on Africa’s energy landscape before providing five recommendations on reaching universal energy access amid global decarbonization.
Topic:
Climate Change, Trade, Sustainability, Decarbonization, Energy, and Critical Minerals
Political Geography:
Africa

94. Green Industrial Policy: A Holistic Approach

Author:
Ilaria Mazzocco
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
In the United States, the rise of the economic-climate agenda and green industrial policy has coincided with growing attention to supply chain resilience, economic security, and a deteriorating U.S.-China relationship. As a consequence, the interaction between trade, geopolitics, domestic economic policy, and climate policy demands a new holistic approach from policymakers and civil society to find more politically sustainable and effective policy solutions. More consideration should be given to the specifics of U.S. climate strategy when it comes to trade and international relations and how to integrate climate strategy with the Inflation Reduction Act and green industrial policy efforts.
Topic:
Economics, Industrial Policy, Geopolitics, Trade, Sustainability, and Green Economy
Political Geography:
China and Asia

95. Hidden Champions of the Chinese Economy: Implications for Korea

Author:
Seungshin Lee
Publication Date:
08-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This paper reviews China's policy of nurturing small and medium sized enterprises. The Chinese government is expanding its establishment of national manufacturing innovation centers necessary to promote national strategies. It plays a very important role in the financial support process for these hidden champions. This is because the government certification process to identify hidden champions is linked to direct and indirect financial support using government and private capital. This paper attempted to analyze the management situation and export competitiveness of listed hidden champions. As a result of analyzing the trade statistics of materials, parts, and equipment from 2012 to 2022, when China's policy of cultivating foster hidden champions was fully implemented, the global trade balance of the China's materials, parts, and equipment industry increased significantly from a deficit of $55.6 billion in 2012 to a surplus of $264.1 billion in 2022. The improvement of China's competitiveness in the fields of materials, parts, and equipment can also be seen as a change in the trade specialization index (TSI) of these industries. Looking at China's global trade specialization index for materials, parts, and equipment, it was import-specialized at -0.033 in 2012, but rose to 0.100 in 2022, improving export competitiveness. Korea should recognize the changes in the trade and industrial structure between Korea and China and form a new paradigm of economic cooperation to overcome the limitations of economic exchanges between the two countries. China, which used to be seen as a manufacturing base for other countries, must now be seen as an advanced country in new industries with which the current structure of economic cooperation structure must be modified accordingly.
Topic:
Economy, Business, Innovation, Trade, and Capital
Political Geography:
China, Asia, and South Korea

96. Service Market Opening in Latin America and Its Effect on the Region's Manufacturing GVCs

Author:
Sungwoo Hong
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Due to the accelerating digital transformation in the post-COVID-19 world, the share of service trade in the economies of major countries worldwide is expected to increase further. Services and participation in the global value chain (GVC) are closely related because services serve as a significant input factor in the manufacturing sector. The recent movement to open the service market in Latin American countries has an inherent policy goal of enhancing participation in the GVC centered on the manufacturing industry by facilitating the introduction of services within and outside the region in product trade. Korea’s exports are still concentrated on the trade of manufacturing-centered products, and improving competitiveness in the service sector is a challenge. In a situation where Korea's exports to the world are sluggish due to the spread of protectionism and delayed global economic recovery, the Korean government and companies need to move away from the traditional Korea-Latin America cooperation model that was focused on manufacturing-oriented product trade. In addition, they need to expand service trade and create new solutions in the service sector. Therefore, against this background, it is essential to understand the level of service market openness in major Latin American countries, provide information to governments and companies, and provide the logic for economic cooperation between Korea and Latin America in the service sector. This report briefly shows the status of service market opening in major countries in Lain America and empirical findings of relationships between service market opening and manufacturing GVCs of Latin America. As a result of reviewing the domestic laws of MERCOSUR and the Pacific Alliance in Latin America, the level of regulation on investment in the service sector has been lowered due to the past active policy of attracting foreign direct investment except for some cases. However, the level of service concessions in these countries was significantly lower than the level of investment liberalization based on domestic law. As a result of the empirical analysis, I found that when Latin American countries signed a bilateral service trade agreement with a Global North country, the agreement significantly strengthened the backward linkages of Latin American exporting countries. Among Latin American countries, when a country in the Global North concluded a service trade agreement with a Global North country, forward linkages of Latin American exporting countries also increased.
Topic:
Markets, Manufacturing, Trade, and Service Marketing
Political Geography:
South America and Latin America

97. Red Sea Attacks and the International Response: An International Law Insight

Author:
Efthymios Papastavridis
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The ongoing crisis in the Red Sea, involving attacks by the Houthis to international shipping in the region as well as forcible measures by the US and its allies against Houthis’ targets in Yemen, entails a host of legal, political, financial challenges to the international community, as evinced, amongst others, by the adoption of UN Security Council Resolution 2272 on 10th January 2024. Amongst others, it is evident that it gives rise to important questions under international law, including on the legal classification of the attacks in question and the legality of the measures that third States are taking. It is the purpose of this Insight to address these questions under international law. In so doing, the Insight avers that the proper qualification of the current situation in terms of the law of armed conflict is that of a non-international armed conflict (NIAC) between Yemen and other States, including the US, and a non-state armed group, the Houthis. Under international law, Houthis’ attacks, depending on the means and against whom they have been committed, can be classified as: i) acts of piracy; ii) acts regulated by the laws governing NIACs at sea; and iii) acts of ‘maritime terrorism’, or more aptly, acts falling under the scope of the 1988 SUA Convention. Accordingly, States fighting Houthis and protecting the safety of navigation in the Red Sea may indeed take many measures in accordance with international law, including the UNCLOS Articles 105 and 110 vis-à-vis acts of piracy, or Article 92 in respect of the protection of vessels flying their flags, as well as the laws governing NIAC at sea, as applicable to the parties to the conflict in question.
Topic:
International Law, Trade, Houthis, International Humanitarian Law (IHL), and 2023 Gaza War
Political Geography:
Yemen, United States of America, and Red Sea

98. Turkey’s “Green” Transformation and the CBAM: Challenges and Opportunities

Author:
Dimitris Tsarouhas
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The relationship between the EU and Turkey with regard to the green transition is of high importance, given the Customs Union and the close trade and business relations between the two sides. Some of the measures adopted by the European Union, and the Carbon Border Adjustment Mechanism (CBAM) in particular, constitute an important empirical case study to assess the adaptability of the Turkish economy to new challenges, and the compatibility of the EU and Turkish visions of the green transition more generally. As a major EU trade partner and a carbon-intensive economy, Turkey is expected to face rising costs because of the implementation of the mechanism. Although the immediate effects of the CBAM appear concentrated in specific sectors, such as aluminum, iron, and steel, the wider repercussions of the new policy could adversely affect growth and employment in the medium to long run. On the other hand, Turkey maintains a set of comparative advantages that can both minimize the impact of CBAM as well as prepare the country’s economy for a set of reforms that will make its economic model sustainable in the long run. To do so effectively, however, Turkey will need to recalibrate relations with the EU and raise the salience of the issue in the domestic political sphere. For the time being, the prospects of doing so remain minimal.
Topic:
Climate Change, European Union, Trade, Carbon Emissions, and Green Economy
Political Geography:
Turkey and Middle East

99. The CAP between a rock and a hard place: its new challenges and uncertain prospects

Author:
Tassos Haniotis
Publication Date:
10-2024
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The Common Agricultural Policy (CAP) is currently at a crossroads of a changing world environment which impacts demand (food inflation), supply (energy and input costs) and agri-food trade (geostrategic tensions). EU policies have to address the conundrum of having to simultaneously contribute to mitigating climate change and contributing to food security by accepting that both are global problems and require global solutions. CAP ongoing policy orientation aims at increasing its environmental performance while retaining its economic and social achievements, but excessive targets set by the Farm to Fork Strategy and the impact of changing market conditions brought tensions in the debate between on food security and climate action with respect to priorities on primary agriculture. Higher food costs increasing income inequalities put households in the developed world at a risk of changes in consumer behaviour that are driven by forces exogenous to their tastes and preferences. Addressing misperceptions about the role of productivity, science and trade will impact on how the EU assesses, in a more balanced way and addresses its strengths and weaknesses in the field of agriculture. Despite clear progress of Greek agriculture in recent years three persistent weaknesses of Greek agriculture relate to an uneven and untargeted distribution of direct payments the underestimation of the role of extensive livestock or the absence of a functioning Farm Advisory System.
Topic:
Agriculture, European Union, Food Security, Economy, and Trade
Political Geography:
Europe and Greece

100. Government Procurement, Financial Services, and Environment: Linkages and Implications for the EU and Brazil

Author:
Adeet Dobhal and Lucas Moreira Jimenez
Publication Date:
05-2024
Content Type:
Special Report
Institution:
Columbia Center on Sustainable Investment
Abstract:
The relationship between trade agreements and the environment is increasingly a priority for policymakers and civil society today. However, some of the disciplines covered by modern trade agreements have not received enough attention when it comes to their potential impact on the environment. Financial services and government procurement are two such areas, even though they are increasingly consequential topics for international trade policy and negotiations. This blind spot merits greater consideration as the connections definitely exist: the regulation of government procurement and financial services can have positive or negative implications for environmental outcomes on the ground, which makes understanding these links a crucial task. Engaging in this very task, this report focuses on the EU-Mercosur Trade Agreement, with a particular attention to the case of Brazil. Using the Agreement on Government Procurement (GPA) and the General Agreement on Trade in Services (GATS) as an analytical base, the report examines recent and relevant trade agreements entered into by Brazil and the EU to contextualize and understand the links between environmental protection on the one hand and government procurement and financial services on the other. The insights generated are then applied to the analysis of the government procurement and financial services chapters of the EUMTA, in an effort to understand how these rules affect parties’ ability to regulate in pursuit of environmental outcomes.
Topic:
Environment, Treaties and Agreements, Trade, WTO, and Procurement
Political Geography:
Global Focus