New German Government Will Need a Success-Oriented Trade Policy
The German and European trade policy must achieve more successes in trade agreement negotiations and not risk the negotiations with sustainability demands. This is the recommendation of ifo trade expert Lisandra Flach: “The global dynamic has changed fundamentally. If Europe wants to continue to play a role as a global player in the future, it should recognize the new geopolitical situation and adopt a more pragmatic approach to trade agreements.”
African, Asian and South American countries now have the choice of increasing trade with the EU or deepening their trade relations with other countries such as China. “Even if climate and environmental protection and human rights are essential goals, careful consideration should be given to how they can be achieved most effectively. Integrating too many sustainability demands into trade agreements can prove counterproductive here, because unlike the EU, China does not pay attention to climate protection and human rights in its trade relations,” says Flach.
The EU’s importance as a trading partner has declined globally
She says that the fact that the EU’s importance as a trading partner for other countries has declined globally is clearly demonstrated by the example of the Mercosur member states: While the EU’s share of Mercosur imports has fallen sharply over the last two decades, China’s share has risen rapidly and overtook that of the EU in 2019. “Given the increased international competition and its declining economic weight, the EU must pool its market power and take coordinated action to make the single market more attractive for foreign companies and founding start-ups,” says Flach.