Competition and the EU Single Market
Leveling the playing field in the age of industrial policy
The success of the European Union is rooted in the creation of a Single Market and the defense of the principle of competition. Today, however, politics is demanding more space at the expense of the market.
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The mobile telecom sector is often taken as a case study of fragmentation of the single market leading to less investment and a loss of technological leadership. However, a closer examination of the data suggests that the fragmentation also implies more competition leading to lower prices for consumers in Europe.
Imposing such high tariffs on BEVs from China without any evidence of damage to EU industry does not make sense and will only backfire on the ability of EU industry to export their own cars.
The EU is encouraging other countries to follow its lead and support the green transition. This requires massive subsidies in many different sectors. Why should the EU then complain if other countries outcompete it in terms of subsidizing the production of green goods?
European automakers currently face increasing pressures. While the region’s manufacturers long dominated global sales revenues, several competitors from Asia have recently moved into the top ten. But European companies have faced similar difficulties before, and the responses of the region’s automakers and policymakers to previous challenges offer insight for the present, especially on the issues of global competition and energy transition.
The European manufacturers have different views on the new challenge from China and the potential outcome of the EU anti-subsidy investigation although it can be expected that the Chinese advance will go to the detriment of all European manufacturers.
This essay examines the international trade policies of the two presumed Candidates for president in 2024, Joseph Biden and Donald Trump.