Lhe context in which European companies operate is hardening under the effect of multiple crises: health, energy, security and geopolitics with the war in Ukraine. These crises give rise to protectionist reflexes at the global level. Thus, the so-called Inflation Reduction Act (IRA) of the Biden administration allows investments on American soil to benefit from substantial advantages compared to Europe.
The IRA is both the marker of the acceleration of the transition of the American economy towards a decarbonized market and of a preference given to the made in America. Indeed, subsidies will only be paid for products made in the United States, which will favor American Teslas over European electric cars, and American steel for wind farm projects. Europeans fear massive relocations of companies, which will prefer to manufacture on American soil to be able to benefit from this aid.
Another example, the improvement of the conditions of access to the Chinese market for European companies depends on the ratification of the global agreement on investments between the EU (European Union) and China. Moreover, the slowdown in Chinese growth has negative effects on a large number of sectors due to the heavy dependence of whole sections of the European economy on Chinese production.
Reciprocity
Faced with this protectionist hardening, can Europe continue to think that the game of free competition in favor of the lowest bidder remains the best response on a global level? Things change. Thus the concept of economic and industrial sovereignty of Europe is gradually gaining ground. The context of polycrises accelerated Europe’s awareness that it could no longer remain “the idiot of the global village”, but that it had to equip itself with all the weapons compatible with international law to promote and protect its businesses in international competition.
Let us be the judge: in the digital field, the EU is adopting a new system which strongly supervises the giants of the sector. At the industrial level, it has set up a system for monitoring foreign investment and has just acquired an instrument to block access to its public markets for companies from countries that do not allow Europeans to participate in their own tenders. Similarly, a system is being developed to target third countries subsidizing their productions and the concept of reciprocity has taken hold.
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