Introduction
The EU has shown a greater interest in rewiring globalization in recent years. The bloc’s efforts to alter vital parts of globalization are nothing new, but they have ramped up in the recent decade. This is crucial because the policies enacted by several European nations and the EU over a long period had a significant impact on molding globalization into what it is today. EU members are now questioning many aspects of globalization for which the EU was responsible in prior years.
In the EU’s view, unrestrained, laissez-faire globalism is not something to be supported. For quite some time, the EU has put out a narrative focused on reining in globalization. To a certain extent, the goal of European integration was to both capitalize on and rein in globalization. The union has heavily influenced many rules that form the basis of international governance frameworks. The EU has the most impact on the world economy and therefore prefers a philosophical approach to globalism.
Analysts’ demands for moderate forms of globalization are reflected in this EU policy. In addition, it is an approach that is more focused on the current needs of the union. Despite considerable European bombast about more reasonable globalization, the EU’s rejiggered goals do not constitute a kind of globalization aiming at mutually favourable issue solutions, nor do they represent the kind of equalization sought by most other governments worldwide. The European Union has taken steps in the opposite path of a additional ambitious globalism to create globalization better suited to EU interests. Whether the European Union’s policy represents a qualitative restructuring of globalization or merely a desire for less globalism remains an open and challenging subject.
Global Trade
For decades, the European Union (EU) was a key driver in expanding global commerce. The organization advocated expanding the World Trade Organization (WTO) and other multilateral trade agreements. As the WTO’s processes have deteriorated in recent years, the EU has worked to maintain its viability (Borrell, 2020). When the European Union was rocked by the financial crisis in the early 2010, it adopted various cautious trade policies. EU has recently sought a series of nuanced reforms to its foreign trade policy rather than continuing down a road of pure protectionism.
In addition to its advocacy for free trade, the European Union has also been a pioneering force in overseeing international financial markets. The European Union’s unique role in and impact on globalization may be seen through the lens of regulation. Since the EU had to establish regulatory regimes to govern European integration, these frameworks presented themselves as templates as interdependence acquired speed at the global level. After that, the EU adopted a policy of regulated globalism (Obendiek, 2021). However, controlled globalism under the pretext of regulations on competition, healthcare, safety, the environment, and other topics was favored by this strategy.
The European Union (EU) has gradually modified its foreign trade policies over the past decade. These changes have had an effect on the EU’s stance concerning globalization. Union leaders have walked a fine line between protecting themselves from the worst effects of globalization and reining in the protectionism of other countries. There has been a change in the EU’s narrative to emphasize concepts like independence and economic sovereignty.
The European Union (EU) has conducted or completed more superior trade talks than any other nation in recent years. The union has signed over seventy bilateral trade agreements, and many more are in negotiation. Despite the EU’s claims that these trade agreements are WTO-compliant, it is evident that the union has exploited them to shape trade policy in its favor. The European Union is shifting its emphasis away from rules-based market liberalization and toward instrumental zed globalization via political negotiation.
In contrast to preceding contracts under the union’s ACP partnership, the European Union (EU) now figures its financial collaborations with African, Caribbean, and Pacific (ACP) states much more closely around its economic interests. As a result, many African nations have refused to sign such accords (Drieghe & Potjomkina, 2019). In addition to facilitating commerce, several of these bilateral agreements are used by the EU to coerce other nations into accepting intellectual property limitations that go beyond the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The union has shifted its strategy away from unilateral market liberalization and toward mutually beneficial trade and investment agreements.
Numerous EU member states have advocated since 2018 for loosening the bloc’s competition regulations to help European champions compete on a global stage. The EU’s revised industrial policy is presented as essential to the continent’s sovereignty. Consequently, in 2020, the EU established an investment screening mechanism at the European level. According to this plan, by the end of 2021, the commission had reviewed over 400 proposals, issuing an opinion to reject or restrict inbound investment in 3% of these situations (Borrell, 2020). Over several years, the EU institutions worked to approve an international procurement instrument that would limit the access of foreign countries to EU procurement contracts if those countries declined to grant equal access to EU enterprises. The Comprehensive Treaty on Investment that the EU and China signed in principle at the end of 2020 reflected the EU’s insistence that its harder effort for equality and market leverage had paid off (Drieghe & Potjomkina, 2019). If put into effect, this agreement will ease the burden of Chinese government regulations on joint ventures and provide European companies access to the Chinese market.
The spread of coronaviruses has aggravated patterns in EU foreign economic policy. Due to the crisis, worries regarding the EU’s reliance on global supply networks have grown. President Emmanuel Macron of France said that Europe and the European Union needed to restore industrial and medical output from China and abroad (Obendiek, 2021). As part of its post-coronavirus recovery mechanism, the European Commission established a provision for providing additional funding to protect European champions against foreign takeovers. Both external and internal causes have contributed to shifts in EU trade and investment policies. As the European Union (EU) has lost market share worldwide over the last two decades, policymakers there have felt defensive. Pressures have increased because of internal politics. In general, populist parties that have achieved power in recent years have shown some antagonism against free and open international commerce and significant investment inflows from China and others. Protests against European Union trade treaties with South Korea, Canada, and the United States drew large crowds in numerous European nations.
Technology Domination
Digital technology has been a particular focus of EU policy-making. The commission set sights on European technical sovereignty in February 2020, emphasizing the need to reduce Europe’s dependency on the rest of the world for key technologies to achieve this aim. Margrethe Vestager, the Executive Vice President of the European Commission, was charged in a mission letter sent at the end of 2019 with promoting European strategic autonomy in the digital domain (Modrall, 2020). European sovereignty over European data as a unifying digital theme has evolved. There have been two parts: putting pressure on American IT companies and encouraging greater autonomy in the European Union.
Limiting U.S. Tech Giants
It is widely known that the European Union has gradually tightened regulations on American IT firms. Current European Commission members have taken steps to increase restrictions on certain businesses. The commission and its member state governments devised a more forceful regulatory, standard-setting, competition-policy, and taxing regime for tech behemoths (Modrall, 2020). In 2018, Google was fined $5 billion by the European Union (EU) for antitrust violations. Furthermore, the union has been a strong advocate for measures to protect digital privacy and prevent firms from abusing customer data, which trade agreements might compromise.
The Digital Services Act (DSA) proposed by the EU would require internet firms to provide more information about their algorithms and to remove and curate content more thoroughly. Offenses of DSA regulations will result in steep fines of up to 6 percent of a company’s annual revenue (Lütz, 2021). On the other hand, the Digital Markets Act will act as antitrust legislation by preventing tech gatekeepers from profiting off their competitors’ data and giving their own services an advantage over their rivals (Modrall, 2020). Fines of up to 10% of annual revenue will be imposed for anti-competitive behavior, and repeated violations could lead to the dissolution of the company. This package represents the EU’s most extensive attack on significant technology firms. The commission followed up on these initiatives in April 2021 with proposed legislation to regulate future advances in artificial intelligence (AI).
Fostering EU Self-Dependence
The second aspect of the EU’s digital sovereignty is cutting its dependency on other regions of the world, as stated in the European Commission’s 2020 digital plan. In the same year, a white paper was produced on artificial intelligence to generate annual investment, including over €20 billion ($23 billion). There was also a discussion in the report on how businesses should be building AI using EU data rather than data from elsewhere (Modrall, 2020). The European Investment Fund (EIF) has facilitated the creation of six separate venture capital funds dedicated to artificial intelligence incubation. A new public-private partnership in the European Union (EU) is working to hasten the transition to the next generation of technology by emphasizing edge computing and related concepts. Germany has started an extensive program to support similar initiatives on a national scale.
The European Union (EU) takes a regulatory stance toward digital technologies and artificial intelligence (AI), with some measures to build up the union’s capabilities and competitiveness (Atkinson, 2021). The European Union combines legitimate worries about the effects of technology on society and national security with an interest-driven tendency to politicize globalism in this area. The EU has contributed to the acceleration of the trend away from digital globalism, which has resulted in the internet being increasingly fragmented among many regional models.
Global Finance and Taxation
The European Union’s stances on the international monetary system follow the same general patterns. EU nations have been resistant to giving up the privileged position in this system that they were granted after World War II. Even if emerging nations now have more aggregate weight in the international economy, Europe is the IMF’s second most potent bloc after the United States. Because of the bloc’s sway over the fund’s decision-making processes, European nations are afforded preferential treatment, widely criticized by emerging markets (Sison, 2019). Despite claims to the contrary, EU member states often bend these norms in global financial institutions to promote their national interests, despite the EU’s insistence that it defends rules-based multilateralism against other nations.
Several initiatives have been launched throughout the years to balance the disproportionately high number of Europeans on the IMF’s governing board. For increased responsibility on currency values, emerging nations agreed to take two seats from Europe in 2010. However, member states have resisted calls to alter the board’s current representation method (Sison, 2019). Despite being on the EU Council’s agenda since 2015, a plan to streamline European representation has made no headway, and the European Commission has questioned the validity of the notional 2025 timetable for achieving this aim. Especially in Europe, the existing structure gives smaller countries a voice that would otherwise be muted. However, for there to be actual equity in the changes, nations like France and Germany, which now have their seats, would have to relinquish some of their influence.
Climate Change
The EU’s perspective on globalization is being modified in no little part by climate policy. Formally, the EU presents the threat of climate change as a method to underline its dedication to balanced, rules-based, open globalization (Hong & Scheinkman, 2020). The European Green Deal, unveiled in December 2019, has a significant global component outlined in this manner, proposing to utilize the union’s internal transformation as a platform for forging better sustainable, low-carbon globalization.
The new EU Carbon Border Adjustment Mechanism introduces a carbon price on imports of certain items, bringing up some more complex concerns. The world trade system may anticipate considerable effects from this mechanism. In order to achieve its goal of preventing carbon leakage, it will be necessary to significantly increase the cost of international commerce, particularly with emerging nations (Buchner et al., 2019). The European Commission is confident that the new import tax would comply with WTO regulations. Other nations have voiced concern about the European Union’s plan to charge for carbon output outside of Europe. At the same time, member-state governments keep subsidizing it within Europe may undermine fair and free global commerce.
The European Union (EU) presents a package of policies as a moderate and fair version of eco-globalism. Still, other powers view this as deception and the EU’s climate narratives as a cover for its self-interest (Hong & Scheinkman, 2020). Many of these policy shifts have elements that can be interpreted in both ways; for example, there are indications that the EU prioritizes climate action over unchecked globalization (Buchner et al., 2019). However, there is also proof of a turn in climate change action toward specific EU geo-economics interests, to the detriment of developing economies’ interests and comparative advantages.
Conclusion
The European Union (EU) is in an unusual position relative to the many globalization viewpoints discussed above. The EU and its allies are members of the dominant, developed world that, for decades, dictated the rules of globalization and helped bring about numerous injustices. However, the EU has emerged as one of the most protective and ambiguous players in recent years regarding globalism’s future. The European Union’s focus has shifted from other states’ mastery of globalization to its susceptibilities under open globalism. This method focuses less on the global systemic imbalances and more on the domestic problems plaguing European communities.
The European Union is adopting a stronger geo-economics or mercantilist stance, with an emphasis on shaping globalization as one channel of its geopolitics. This modification results from both nationwide and global tendencies. Much of the shift results from external factors, such as power competition and the more hardline stances taken by other actors, while some of it is a deliberate decision on the EU’s side. A more political perspective on globalization has been prompted by the European Union’s (EU) decline in trade and investment market shares and the necessity for the union to reposition itself in light of the competition between the United States and China. There has been an additional exogenous drive for EU repositioning: the coronavirus pandemic. Across most of Europe, domestic populist movements have been on the rise, frequently on platforms that challenge globalization. Their ascent is the result of several interrelated causes. It cannot be reduced to simple economic issues, but it has bolstered the view that European Union (EU) policies toward the international economic system require re-evaluation.
While sovereignty and autonomy are not always at odds with globalization, they do not tend to move in the same direction. The European Union’s changes are still in the early stages, marking the start of what is expected to be a protracted transformation. Whether the EU wants modest tactical modifications or can come up with a fully formed and cohesive alternative vision of globalization remains an open topic for the time being.
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