Free trade is the basis for achieving Europe's strategic autonomy

We believe that the pressure of the Confederation of Industry of the Czech Republic and 15 other European business associations contributed to the fact that the European Commission refrained from achieving technological sovereignty in the updated Industrial Strategy, which could lead to creating dangerous barriers to business and innovations. Instead, the European Union will strive for strengthening its open strategic autonomy. The EU can reduce its dependence on supplies of strategic raw materials or components from just a few countries, in particular by breaking down trade barriers to make it easier for companies to find alternative suppliers. Representatives of European institutions and European companies agreed on this at the online roundtable on the Open Strategic Autonomy and International Partnerships - Building Safe Data Spaces, organized by the Confederation of Industry of the Czech Republic.

The European Union should remain open to trade and innovations and not close itself in the name of achieving technological sovereignty in strategic sectors. The Confederation of Industry of the Czech Republic, together with 15 other business organizations from 11 EU countries, called upon the European Commission to prevent the creation of barriers that will ultimately harm European companies and consumers in international competition. "Together, we have called on the European Commission to keep the EU open. We are pleased that the updated Industrial Strategy focuses on the open strategic autonomy, instead of the technological sovereignty and that it suggests that the open strategic autonomy can be achieved through international trade partnerships. Of course, in the digital age, such partnerships cannot be developed without secure data flows and data sharing," says Milena Jabůrková, Vice-President of the Confederation of Industry of the Czech Republic.

The coronavirus pandemic has exposed Europe's dependence on supplies of strategic raw materials and components in several sectors. However, the solution to this dependence is not to build Europe's own capacity at all costs. On the contrary, it is more advantageous to support an open business policy that will allow companies to expand their supply chains. This is also the case in the digital economy, where the EU should contribute to setting global standards, breaking down barriers to data flows and ensuring high protection of private data. Representatives of European institutions and European companies agreed at the online roundtable on the Open Strategic Autonomy and International Partnerships - Building Safe Data Spaces, organized by the Confederation of Industry of the Czech Republic.

FREE TRADE INCREASES THE RESILIENCE OF THE ECONOMY

Openness is key for the European Union. "The EU wants to remain open on the one hand, but also self-sufficient in strategic sectors on the other. We analyse in which sectors we depend on supplies from only a few countries, whether it is healthcare, the pharmaceutical industry, semiconductors or renewables. Where it is not possible to secure supplies from more credible partners, we want to focus on supporting our own European capacities," says Věra Jourová, Vice-President of the European Commission.

Thanks to free trade, European companies and the entire European economy will be more resilient to sudden shocks. This was also confirmed in the coronavirus pandemic. "We need to diversify our supply chains so that we are not dependent on just a few suppliers. It is necessary to carefully balance the non-trade conditions that we require our partners to meet before we even start negotiating about free trade with them. We must not create barriers to negotiations in advance," claims Dita Charanzová, Vice-President of the European Parliament.

In the area of trade, it is necessary to find the right balance between openness and resilience. "Because of the pandemic, short-term decisions are often made, but there is a danger that trade barriers will grow. We must maintain a competitive environment both in the internal market and in international trade. Even in strategic sectors, it is the market, not the government, that decides which sector will prosper,” says Luisa Santos, Deputy CEO of BusinessEurope.

BUSINESS NEEDS CLEAR RULES

Openness is also key to the development of the digital economy. The Confederation of Industry of the Czech Republic has long been pressuring the European institutions to include sections governing the rules for the free flow of data and digital business in the newly negotiated trade agreements. "The pandemic has shown the huge impact of digital trade on economic recovery after the crisis. We are negotiating rules for e-commerce at the World Trade Organization. We must not allow regulations in individual states or trading blocs to be incompatible with each other. We need really global rules,” explains Christophe Kiener, Director General of DG Trade at the European Commission.

The European Union, whose economy is one-third dependent on exports, has always tried to actively influence the shape of international rules that make it easier for European companies to penetrate new markets. "Recently, however, Europe has cleared the field of standardization a bit. It is not just about legislative regulation. Standards and norms are often developed in new industries at the level of engineers and experts. Europe is not so strong there. In addition, one must avoid unilateral regulations that could provoke an adverse reaction from other countries," warns Hosuk Lee Makiyama, director of the European Center for International Political Economy.

Business needs clear rules that will not create a grey zone in which only big strong players, who are not afraid to operate on the edge of what is and what is not allowed, can move. "In the case of free flow of data, we have a problem agreeing on a common framework among ourselves in the European Union. Only when we are able to agree internally, will we be able to negotiate global rules much more effectively also with other states,” says Shane McNamee, Chief Privacy Officer at Avast.

The Confederation of Industry of the Czech Republic is closely following the whole European debate on open strategic autonomy. At both domestic and European level, it reminds politicians that the EU should focus primarily on strengthening competitiveness, innovations and ensuring the secure and free flow of data at European and international level.