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931. Inclusive Foreign Policy in Israel – Trends and Processes from a Gender Perspective

Author:
Orni Livny
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
Gender equality and women’s rights are consensual values across parties and political agendas in Western democracies, of which Israel has always been proud to be a part. However, Israel’s 37th government, which is the most religious and conservative in the country’s history, set Israel back on the gender issue. Yet, the new government’s weakening of the female voice can also be an opportunity for change: The struggle for adequate representation of women in decision-making processes, which previously only troubled the limited communities of women’s organizations, became a core issue in the public discourse and expanded the awareness that gender equality and women’s rights are fundamental values of democracy. It is not a struggle only of women nor of one political camp or another, but a central part of liberal democracy. This policy paper, written in collaboration with the Friedrich Ebert Foundation (FES), examines the concepts of inclusive and feminist foreign policy and seeks to suggest elements of these concepts that Israeli policymakers may adopt, whether in the short term or the long run.
Topic:
Foreign Policy, Women, Feminism, Decision-Making, Inclusion, and Gender
Political Geography:
Middle East, Israel, and Palestine

932. The Gini Trade Index: What Can We Learn from A New Trade Indicator?

Author:
Lucian Cernat
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief introduces the Gini Trade Index (GTI) as a new trade synthetic key performance indicator capable of capturing the different distribution of trade values across firm characteristics and across countries. The new indicator replicates the well-known features of the traditional Gini Index, a widely used metric for the skewness of several socioeconomic indicators, in particular income inequality. The Policy Brief calculates the Gini Trade Index for all EU member states and contrasts the case of Slovakia and Cyprus, the EU countries situated at the opposite ends of the Gini Trade Index. The paper finds that the GTI has increased over time in most EU countries and offers a tentative range of optimal GTI values. The final section offers several examples of trade policy initiatives that can reduce trade concentration and lead to greater participation of small and medium enterprises in global trade.
Topic:
European Union, Trade, and Socioeconomics
Political Geography:
Europe, Cyprus, and Slovakia

933. Regulating the Working Conditions of Platform Work: What Can We Learn from EU Member States?

Author:
Oscar Guinea, Elena Sisto, and Oscar du Roy
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Policymakers in Estonia, France, Greece, and Spain share the common objective of enhancing the working conditions of platform workers. However, variations in their labour markets, legal frameworks, and political landscapes have led to four distinct approaches in achieving this goal. Predominantly, the Spanish regulation has been geared towards attempting to reclassify platform workers from self-employed to employees. In contrast, the regulatory strategies in France and Greece have focused on retaining the sector within the realm of independent work, while simultaneously improving the working conditions of platform workers. Estonia adopted a broader perspective, emphasising the enhancement of working conditions for all freelancers, not exclusively those categorised as platform workers. This Policy Brief offers a comprehensive evaluation and comparison of the regulatory frameworks governing platform work in four European countries. The comparative analysis draws upon research conducted by the OECD and the World Economic Forum (WEF) on the principles of good regulation. Adapting this research to the context of digital platforms, three key principles for assessing the regulation of working conditions on these platforms were identified: (i) the consistency with the policy objective of improving the working conditions of platform workers; (ii) the feasibility of implementing the regulatory requirements; (iii) the presence of regulatory dialogue and appeal mechanisms. The evaluation of the four countries’ regulations against the three outlined principles offers valuable insights into the regulation of platform work. In Spain, the primary aim of the regulation regarding platform workers was not solely the improvement of working conditions but predominantly the reclassification of platform workers from self-employed to employees. This distinction is crucial, as platform workers highly value the benefits of self-employment, such as access to work, income opportunities, flexibility, and autonomy. Evidence presented in this study suggests that a majority of Spanish delivery workers preferred to maintain their self-employed status, while only about one-third expressed a desire to be classified as employees. Moreover, the Spanish regulation is characterised by a broad formulation of the conditions defining employment for digital delivery workers. This lack of specificity has led to an uncertain application of the regulation, with digital platforms adopting diverse strategies to achieve compliance. Ultimately, the Spanish regulatory framework has been marred by a profound disregard for the interests of, and a notable lack of communication with, those directly impacted by the regulation: the digital platforms and the platform workers. Greece has demonstrated that it is possible to enhance working conditions for platform workers while preserving the advantages of self-employment. The Greek regulation mandates that digital platforms adhere to the same welfare, health, and safety obligations for platform workers as they would for employees. Additionally, Greece has established clear criteria to define the presumption of self-employment for platform workers. This clarity offers legal certainty and enabled platform workers to accurately assess their employment status. Consequently, there has been a notable reduction in court cases regarding the classification of platform workers. France has progressively developed a comprehensive legal framework that has systematically enhanced the rights of platform workers. This development culminated in six pivotal agreements, addressing some of the most challenging aspects of working conditions on digital platforms, such as account deactivation and minimum revenue. These agreements were reached under the auspices of the Autorité des Relations Sociales des Plateformes d’Emploi (ARPE), a public entity instrumental in facilitating effective social dialogue between digital platforms and trade unions. The establishment of clear administrative procedures governing the negotiations within ARPE has been crucial in formulating measures that digital platforms can effectively implement. Estonia’s primary focus is on ensuring adequate working conditions for all freelancers, including platform workers. A considerable number of platform workers in Estonia engage in a contract-for-services (töövõtuleping) with digital platforms. This contract offers a social safety net, including unemployment benefits, sick pay, and healthcare services, while retaining the self-employed status of platform workers. Moreover, this framework provides clarity regarding the rights and responsibilities of both platform workers and digital platforms, facilitating the implementation of a clear and unambiguous regulatory system.
Topic:
Labor Issues, European Union, Regulation, Digital Economy, and Labor Market
Political Geography:
Europe

934. EU Autonomy, the Brussels Effect, and the Rise of Global Economic Protectionism

Author:
Matthias Bauer and Dyuti Pandya
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The Brussels Effect, once emblematic of the EU’s alleged influence in shaping global regulations, has now become a factor contributing to global regulatory fragmentation. The EU must recalibrate its trajectory towards a liberal and rules-based trading order, prioritising widespread regulatory liberalisation to counteract the risks of global protectionism and regulatory spirals. A holistic approach, both internally and globally, is crucial to prevent regulatory and subsidy spirals on a global scale. This recalibration is essential to keep global markets open and enhance the EU’s own economic and technological competitiveness. In response to the 2008 financial crises, the EU underwent a shift in its approach to global trade, transitioning towards Strategic Autonomy. However, this gradual move away from a liberal global trade order has led to increased regulatory burdens and regulatory fragmentation, impacting businesses within and beyond the EU. The Brussels Effect, as denoted in this paper, highlights the EU’s signalling effect on other governments in considering and implementing regulations. This effect has contributed to increased trade restrictiveness and regulatory fragmentation globally. The EU’s insistence on “autonomy” and “European values” not only empowers others to follow suit, contributing to the rise in global protectionism, but also contradicts the EU’s historical support for open trade principles and its commitment to a highly competitive social market economy. A wealth of EU regulatory data reveals a stagnation and, in many cases, a regression in regulatory cooperation within the Single Market. This is evident from rising trade restrictiveness and a tendency towards increased legal fragmentation instead of convergence across the EU. The evolving regulatory acquis of the EU, coupled with insufficient cooperation and stalled trade agreements, poses risks beyond its borders. The EU’s paradigm shift towards autonomy contributes to global regulatory spirals and protectionist measures, particularly evident in services trade. Despite the EU’s historical commitment to harmonisation and liberalisation, many sectors, such as transport and logistics, telecoms, and digital services, have witnessed the imposition of new laws and rules that hinder trade. With the EU’s share of global GDP expected to decrease to 9% by 2050, there is a critical need for EU governments to enhance its regulatory capabilities and foster innovation. To wield influence in global economic diplomacy, EU policymakers must prioritise policies that unleash the collective ingenuity of individuals and businesses that help to maintain high levels of productivity, competitiveness, and prosperity.
Topic:
Globalization, European Union, Economy, Autonomy, Protectionism, and WTO
Political Geography:
Europe

935. German Industrial Competitiveness and the Metaverse

Author:
Hosuk Lee-Makiyama and Robert Baker
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The metaverse is the next iteration of the internet as an immersive, 3D, virtual, shared world where activities can be carried out with the help of extended reality services. But it is much more than headsets and virtual games. The metaverse is increasingly conceptualised in tandem with other advanced technologies, including AI, IoT, automation, and blockchain. Combined, these Industrie 4.0 innovations will be at the centre of German productivity growth over the next decade. The IMF and the OECD both expect Germany to be the worst-performing leading economy in the world in 2023. Beyond recent shocks, German competitiveness is being “steadily eroded” by structural factors like “rising labour costs and a lack of digitisation” (Arnold, 2023). In this context of sclerotic growth, immersive technologies show much promise. The economic dimension of the new Digital Strategy should be guided by three simple “I’s” – immersive, industrial productivity, and internationalisation of German technologies. Specifically, the metaverse is driving productivity gains in manufacturing, engineering, financial services and retail – it could add €71 billion to German GDP by 2035. As well as enhancing the productivity of existing operations, immersive technologies and smart factories can enable the reshoring of profitable activities back to the German economy, particularly in technology and engineering. But these economic gains are not inevitable. Neglecting immersive technologies would have a significant effect on Germany’s remaining competitive advantages. For example, late adoption of the metaverse and digital twins by the German auto industry would lead to a 10% loss in exports, equating to more than €12 billion each year. The costs of late adoption are only underscored by the current salience of global competition. US firms have a strong track record of successfully integrating internet products into industry, while China and its own technology giants are developing strategic initiatives to capitalise on the metaverse. While much of the metaverse remains under development, companies are already showcasing a range of commercial partnerships and innovative use cases. German companies like Siemens are at the forefront of digital twins which allow automakers and other manufactures to replicate their physical facilities in virtual worlds, drawing on real-time data and simulations to optimise their operations. In insurance, the same digital twins are facilitating underwriting and expedited claims via remote monitoring. Meanwhile, in medical devices and healthcare, a metaverse of medical technology and AI (MeTAI) is facilitating the refinement of AI-based medical practices. This is the future of medical imaging technology, diagnosis, and therapy.
Topic:
European Union, Digital Economy, Industry, and Competition
Political Geography:
Europe and Germany

936. How Huawei Weathered the Storm: Resilience, Market Conditions or Failed Sanctions?

Author:
Hosuk Lee-Makiyama and Robin Baker
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Huawei is exhibiting stoic resilience in the face of US sanctions, economic downturns, and the slow pace of 5G investments. There is a narrative that the company has been propped up by the Chinese government, but the key to Huawei’s resilience is multifaceted. Through pre-emptive stockpiling and ingenuity, the company has continued to fulfil its base station orders and defend its market shares abroad. Concurrently, Huawei has made an autonomous business decision to reinvest its earnings and intensify R&D to secure its supply chains against political risks and diversify into new business areas. Successful forays into semiconductors, cloud services and energy grids have also been facilitated by a capital structure that lends itself to long-term planning. Huawei’s survival is not necessarily a lesson in the futility of sanctions to stifle technological progress. However, it does show that muddled political objectives and inconsistent implementation will yield potentially contrary outcomes. At the same time, factors that contribute to Huawei’s resilience also highlight the infighting and vulnerabilities of listed firms like Mavenir, Ericsson and Nokia.
Topic:
Markets, Sanctions, Digital Economy, Resilience, and Huawei
Political Geography:
China, North America, and United States of America

937. Calling on the EU-US Trade and Technology Council: How to Deliver for the Planet and the Economy

Author:
Oscar Guinea, Vanika Sharma, Philipp Lamprecht, Dyuti Pandya, and Oscar du Roy
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief proposes the establishment of an agreement on conformity assessment between the EU and the US that covers machinery and electrical equipment. The initiative aims to increase the number of European and US conformity assessment bodies authorized to test and certify EU and US machinery and electrical equipment for exports into each other’s markets, without recognizing the equivalency or otherwise altering the product requirements in regulation, standards, or other normative documents on either side. While this study focuses on the economic effects of an agreement on conformity assessment that includes machinery and electrical equipment, the scope of such an agreement could potentially be extended to several additional product categories, particularly those that are subject to requirements for mandatory third-party conformity assessment in both the EU and the US. The increase in the number of conformity assessment bodies is expected to reduce the costs and the time required to demonstrate conformity. If this policy succeeds as expected in achieving a reduction in trade costs between 2 and 6 percent, US exports to the EU are projected to increase between US$ 11 billion and US$ 32.5 billion while EU exports to the US are estimated to grow by between US$ 13.8 billion and US$ 42.2 billion. In percentage terms, US firms are anticipated to experience a larger increase in exports of machinery and electrical equipment than their EU counterparts. The increase in trade flows as a result of this agreement is estimated to be larger than the rise in trade flows achieved in other Free Trade Agreements signed by the EU or the US. Moreover, as an increasing number of EU regulations begin to mandate third-party conformity assessment, US firms will increasingly benefit from this agreement when exporting to the EU. Given China’s status as the largest supplier of machinery and electrical equipment to both the EU and the US, the implementation of an EU-US agreement on conformity assessment would not only improve conditions for transatlantic trade but also lead to reduced trade dependence for the EU and the US on China. The reduction in trade costs between the EU and the US on machinery and electrical equipment due to the agreement could lower Chinese exports to the EU and the US by between US$ 6.5 billion and US$ 19.4 billion. Importantly, machinery and electrical equipment are crucial inputs for some of the key technologies in which the EU and the US Administrations have identified trade dependencies on China. However, in contrast with other policies aimed at reducing reliance on Chinese imports, an agreement on conformity assessment for machinery and electrical equipment will not require public subsidies or impose any financial burden on taxpayers. This agreement also has the potential to benefit the environment. Machinery and electrical equipment are essential inputs for green technologies. Therefore, a reduction in the cost and time of conformity assessment in these industries will accelerate the adoption of green technologies. An agreement on conformity assessment between the EU and the US covering green goods and clean technologies could increase transatlantic exports between US$ 3.1 billion and US$ 9.2 billion. While this increase in exports is significant, broadening the scope of the agreement to include the entirety of machinery and electrical equipment, rather than just a subset, is projected to lead to trade effects eight times larger. Moreover, as green technologies rapidly evolve, an agreement on conformity assessment has the potential to serve as a dynamic instrument that evolves to accommodate future regulatory and economic developments on climate and the environment on both sides of the Atlantic.
Topic:
Science and Technology, European Union, Economy, and Trade
Political Geography:
Europe, North America, and United States of America

938. Openness as Strength: The Win-Win in EU-US Digital Services Trade

Author:
Matthias Bauer, Dyuti Pandya, and Oscar du Roy
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The discourse surrounding the EU’s supposed over-reliance on digital services imports from non-EU countries, particularly the US, has been a recurrent topic among some political circles. However, this viewpoint tends to oversimplify and misrepresent the nuanced and complex reality of the EU’s status within the global Information and Communication Technology (ICT) sector and digitally enabled trade. A thorough analysis of trade data and trends clearly illustrates that the EU’s engagement with foreign (non-EU) digital services, notably from the US, represents a strategic economic advantage, bolstering Europe’s competitiveness and fostering productivity growth. Below we underline the critical importance of openness to foreign innovation and technology diffusion for the EU’s economic future.
Topic:
European Union, Digital Economy, Strategic Competition, Imports, and Productivity
Political Geography:
Europe, North America, and United States of America

939. ICT Beyond Borders: The Integral Role of US Tech in Europe’s Digital Economy

Author:
Matthias Bauer and Dyuti Pandya
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Contrary to political assertions about the vulnerability of digital services provided by non-EU companies, the strong presence and sunk costs associated with US tech companies’ investments in data centres, skilled workforce development, and research facilities in Europe act as significant barriers to exit, highlighting the inherent symbiosis between US tech investments and Europe’s digital and non-digital sectors. These investments underscore a mutual inter-dependency that strengthens European economies, making the notion of “sudden cessation” of digital services by US companies implausible. Corporate data show a significant investment gap of approximately USD 1.36 trillion between US and EU ICT companies, attributing a competitive edge to US firms due to their heavy investment in ICT, cloud solutions, and R&D. Forecasted increases in ICT investments by US corporations outline a benchmark beyond reach for EU businesses. The notion of EU firms aligning with this growth path is rather fantastical, as it would call for immense government investment, ultimately draining financial resources from essential public services, such as healthcare, housing, and environmental policies. Substantial ICT investments across EU Member States together with a long-term commitment to the European market present an opportunity for the EU to leverage US continuous technological advancements, underscoring the potential for transatlantic collaboration to drive the EU’s digital transformation and innovation. EU-US partnerships not only fuel the EU’s digital transformation but also align with shared political values, reinforcing the significance of transatlantic collaboration in shaping a competitive and innovative digital future.
Topic:
Communications, European Union, Digital Economy, Investment, and Information Technology
Political Geography:
Europe, North America, and United States of America

940. Time to Rethink Export Controls for Strengthened US-EU Cooperation and Global Trade Rules

Author:
Matthias Bauer and Dyuti Pandya
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The escalation of broad export controls by the US, under the guise of national security and the aim to curb technological transfers to potential adversaries,[1] marks a new epoch of bureaucratic oversight. The US push for broad export controls also underscores a critical juncture in US-EU relations and global trade rules. Broad export restrictions not only challenge the very foundation of free trade but also contribute to the erosion of Western technology leadership.[2] Unilateral export controls may start strong but eventually lose effectiveness and become counterproductive,[3] pushing non-US companies, particularly in the semiconductor sector, to find alternatives to US components.
Topic:
International Cooperation, European Union, Regulation, Exports, Trade, and Semiconductors
Political Geography:
Europe and United States of America