EESC CORNER: COVID-19 will have a profound impact on global trade

In its 2015 Trade for All communication, the EC committed to reporting annually on the implementation of the EU’s most significant trade agreements. This is now the third report on this matter, and the first time the EESC has made recommendations.

FTAs make up a rising share of EU trade. In 2018, 31% of EU trade in goods with the rest of the world was covered by preferential trade agreements and this figure is expected to rise to over 40% when considering the trade agreements concluded since then.

At present, the EU has the largest trade network in the world, with 44 preferential trade agreements covering 76 countries. The annual implementation report covers different types of EU trade agreements:

“first generation” agreements, negotiated before 2006, that focus on tariff elimination;
“new generation” agreements that extend to new areas, including services, investments, public procurement, competition, subsidies, regulatory issues and sustainable development;
Deep and Comprehensive Free Trade Areas that create stronger economic links between the EU and its neighbouring countries;
Economic Partnership Agreements focusing on the development needs of African, Caribbean and Pacific regions.

COVID-19 will have a profound and unprecedented impact on our globalised trade world. So far, the European Commission estimates there will be a record 9.7% decrease in global trade, a possible reduction of 9.2% in extra-EU27 exports of goods and services, and an 8.8% decrease in extra-EU27 imports for 2020. We have witnessed large-scale disruptions to supply chains, ad hoc export restrictions on crisis-relevant goods like medical supplies, tightened customs and border controls, and restrictions on the free movement of workers and service suppliers.

This crisis underlines the importance of global cooperation and showcases that national and unilateral solutions are not the answer, neither at European nor at global level. Hence, the reform process of the WTO must continue in order to ensure a strong and effective organisation that can act against protectionism and unilateralism.

Marie Zvolská, Employers’ Group (Group I)