COVID and the Future of the EU

Valerie D’Erman, Instructor and Research Associate at the Department of Political Science, University of Victoria

The European Union’s (EU) external trade policy has long been championed by scholars and practitioners alike as one of the great accomplishments of European integration. As early as the Treaty of Rome in 1957, the founding six countries initiated the Common Commercial Policy as an extension of early customs union. From then, the single market of the EU gradually developed in to a cohesive and capable presence within bilateral trade negotiations and multilateral forums alike.

The COVID-19 pandemic of 2020 presents a formidable challenge to all economies around the world; while the situation is primarily a public health crisis, the ramifications on economic behaviour at both national and supranational levels in the EU are severe and likely to be long-lasting. Trade itself has become all at once both a vital phenomenon (consider the movement of such current critical necessities such as personal protective equipment, toilet paper, electronic devices) and a source of raw protectionism (consider also some early domestic responses to the rapid spread of the virus in the form of localizing supply chains, as in this Reuters headline from March: “Germany would like to localize supply chains, nationalization possible, minister says”[1]).

Paramount when contemplating the ramifications of economic fallout from COVID on EU trade policy is the reality of national borders. The single market – and indeed, the utopian vision of the EU itself – is largely dependent on the ideal of abolishing internal borders for goods, services, people, and capital. However, the reality of the pandemic as it set in during March of 2020 presented the need for borders as a critical health and safety mechanism. While arguments for or against border controls have waxed and waned according to various other perceived crises in the EU, such as responses to terrorist attacks as well as to the heightened surge of refugees and migrants, the difference with the COVID pandemic is that the need for domestic protection and cautious exposure to outsiders is rooted in a more generally shared perception of what the health risks are for the public at large. This means that the argument for reinstated border controls are much less likely to be politicized as a reactionary-versus-progressive debate. The implications of this for economic activity are obvious: the reduced movement of goods and services (upon which much market activity has come to rely) both between EU members as well as between the EU and its trading partners. Less obvious are the implications for future trade agreements, not in the least because the health and economic forecasts are still completely unknown. One the one hand, cooperation with known partners might become an absolute necessity – the EU will have an enormous advantage in this regard compared to other major power players in the World Trade Organization (WTO). On the other hand, the sorts of challenges and politics that arise from prolonged economic downtowns tend to not be supportive of openness; a political reality that could be compounded with the idea that the virus itself was able to spread as quickly as it did precisely because of the pre-pandemic emphasis on open globalized markets.

An early test of the tenacity of EU external trade policy might present itself in the ongoing negotiations between the EU and the UK, post-Brexit. In an optimistic vein, the continuation of trade talks throughout the pandemic may be indicative of a continued commitment to open markets and external relations. The reality, however, will depend on the details of negotiations, both in substance and in tone. The question of competences in concluding trade agreements has become more visible in the past five years, as evidenced by EU member states demanding more voice into the final approval of the Comprehensive Economic and Trade Agreement (CETA) with Canada in 2016, and by the Court of Justice of the EU’s (CJEU) opinion (also in 2016) on the need for the Singapore-EU free trade deal to be concluded as a mixed agreement needing both supranational and national-level approval. While the establishment of mixed competences is not a new phenomenon, these events raised the visibility of national parliamentary involvement in trade; it is perhaps reasonable to surmise that the size and strength of the UK market might offer an even stronger test of national interest and responses to the trade chapters at hand in the coming year. Historically, crises are often portrayed as windows of opportunity in hindsight, as unforeseen events that interrupted the existing mechanisms of society and ushered in new modes of interaction. What COVID holds for the depth of European integration generally, and for the durability of the EU’s long-standing successful trade policy, remains to be seen.

[1] Reuters Business News (13 March 2020). “Germany would like to localize supple chains, nationalization possible, minister says.” https://ca.reuters.com/article/businessNews/idCAKBN2101BH

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