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Begin New Search Topic Economics Political Geography Europe Content Type Policy Brief Publication Year within 10 Years Publication Year within 3 Years

1. Why the proposed Brussels buyers club to procure critical minerals is a bad idea

Author:
Cullen Hendrix
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Concerned about critical mineral supply chains and its own strategic vulnerabilities, the European Union is advancing a buyers club to procure minerals critical to the clean energy transition, such as bauxite, cobalt, lithium, and nickel. The European Union is deeply dependent on imports of both raw and processed critical minerals and materials and thus highly exposed to global price volatility. The door appears to be open for the United States or other EU trading partners and like-minded countries to join this club. Decarbonization is not the only impetus behind the proposed Brussels buyers club. Both the European Union and United States view China’s dominance of critical mineral supply chains as a national security issue, because these minerals are key inputs to modern military technology. Hendrix agrees that supply chains for critical minerals desperately need widening to meet projected global demand and tackle climate change mitigation, but he warns that a purchasers club would not be a step in the right direction. A buyers club would be prone to free riding, set up distributive conflicts within the European Union, and reduce the share of climate mitigation benefits accruing to critical mineral–producing countries, many of which are developing and middle-income economies.
Topic:
Economics, National Security, European Union, Supply Chains, and Minerals
Political Geography:
China and Europe

2. The international tax agreement of 2021: Why it’s needed, what it does, and what comes next?

Author:
Kimberly Clausing
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In 2021, more than 135 jurisdictions agreed on transformative new international tax rules that would establish a minimum tax rate of 15 percent on multinational corporate income regardless of where it was reported. In December 2022, the European Union unanimously moved forward to implement this minimum tax, and other countries, including South Korea, Japan, Australia, Canada, and the United Kingdom, are also either implementing the tax or taking substantial steps toward implementation. In tandem, the United States should also reform its international tax system and adopt a stronger minimum tax. While the future of the international agreement is uncertain, it has important implications for the ability of governments worldwide to create tax systems that are administrable, fair, and efficient. The agreement also demonstrates important guiding principles for the future of multilateral cooperation on global collective action problems, including efforts to protect public health from future pandemics, address nuclear proliferation, and resolve territorial conflicts. US progress on international tax reform would enhance much needed international cooperation on these issues.
Topic:
Economics, Treaties and Agreements, Reform, European Union, and Tax Systems
Political Geography:
Europe and Global Focus

3. Building Resilience? The Cybersecurity, Economic & Trade Impacts of Cloud Immunity Requirements

Author:
Matthias Bauer
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
EU Member States should call on the EU’s Cybersecurity Agency (ENISA) and the European Commission to abandon immunity requirements in the proposed EU Cloud Certification Scheme (EUCS). With immunity requirements in the EUCS, the EU risks opening a Pandora’s box, paving the way for data localisation, foreign ownership restrictions, and local establishment requirements in digital industries globally leading to rising trade tensions. ENISA’s current proposal could increase policymakers’ appetite for data localisation in the EU. It would empower the European Commission and Member State authorities to exclude foreign businesses from domestic cloud services markets and set a dangerous precedent for any data-intensive sector. The list of “sectors of high criticality” could be logically extended to both existing services (e.g., financial services) and to new technologies and business models, such as IoT in the energy and healthcare sectors, and autonomous driving in the transport sector. Non-EU jurisdictions would be pressured to respond in kind. EUCS immunity requirements would increase cloud adopters’ exposure to cybersecurity risks. Data localisation often creates obstacles to an integrated management approach towards cybersecurity risks. Country of headquarter and foreign ownership restrictions in the proposed EUCS risk removing global frontier cybersecurity technologies from Member State markets. Excluding these and other EU and non-EU companies from EU Member States could result in a long-lasting security deficit of EU cloud adopters vis-à-vis organisations that are still able to use reliable and often best-practice cloud services offered by providers from outside EU Member States. Immunity requirements in the EUCS are discriminatory by design. They could provoke retaliatory measures by EU trading partners, either unilaterally or through WTO or bilateral FTA (e.g., UK-EU) Dispute Settlement. Local establishment requirements and foreign ownership restrictions would by design discriminate against foreign cloud providers. US-headquartered companies, which currently serve more than 75% of the EU market, would be most affected by EU immunity requirements.[1] Depending on US preferences and the scope of the proposed EUCS, the EU could be subject to retaliatory tariffs of up to USD 12 billion worth of EU goods exports or equivalent restrictions for EU services exports to the US. Other governments could lodge complaints via the WTO as well (e.g., Singapore, Japan, Canada and others, where cloud development is advancing rapidly). EU suppliers are currently in no position to manage a broad-based transition to cloud, and thus such requirements would delay significant efficiency and security gains that current foreign suppliers could offer. A blanket exclusion of non-EU cloud vendors would also likely undermine Europe’s objective to achieve a 75% cloud adoption rate for EU enterprises. Sensitive European businesses and public sector organisations would have to delay migration and make do with legacy systems for a very long time. Contrary to large countries, these negative impacts would be much more pronounced for smaller EU Member States, which lack the presence of large domestic incumbents and generally rely much more on an open international trading regime for digital services. ENISA’s cloud certification scheme should be limited to technical and transparency requirements. Immunity requirements for non-personal data should be addressed in bilateral initiatives such as the EU-US Trade and Technology Council (TTC) or agreements requiring a company that sought to offer services of the highest level of sensitivity to be headquartered in a country granted adequacy with EU data protection rules, or a country that is an adherent to the OECD’s Trusted Government Access principles, or (concerning the US) a participant in the upcoming Trans-Atlantic Data Privacy Framework. Excluding foreign companies from operating in the EU would have far-reaching consequences. If that is the intent, it should require a sound legal analysis and the decision should be taken through a formal legislative procedure at the EU level.
Topic:
Economics, Markets, European Union, Cybersecurity, Digital Economy, Trade, and Resilience
Political Geography:
Europe

4. The Economic Dividend of Competitiveness

Author:
Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Elena Sisto, and Erik van der Marel
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
In a world of technological and economic rivalry, the EU must devote increased attention to its competitiveness. Higher levels of competitiveness will help the EU build a more prosperous economy which will in turn produce innovation and resources to address the great challenges of our time. ECIPE published a study presenting a competitiveness compass with concrete policy recommendations that will improve EU’s competitiveness. These policy recommendations, once implemented, will bring tangible benefits to the EU economy in the form of higher levels of trade and productivity. This report presents five scenarios in which the EU pursues competitiveness policies that lead to higher economic growth.
Topic:
Economics, Science and Technology, European Union, Economic Growth, and Competition
Political Geography:
Europe

5. Building a Mature UK Trade Policy

Author:
David Henig
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Global Britain has not delivered according to the hopes expressed by supporters of leaving the EU. Trade with the rest of the world has not grown to make up for leaving a bloc with seamless trade, early Free Trade Agreements with Australia and New Zealand are of minor economic significance, and it is hard to discern much of a strategy beyond completing a few more similar deals. Meanwhile the world of trade policy is transformed since 2016, negatively. The US has essentially declared its national interests to be more important than global rules, while the EU wants to act unilaterally as the global regulator. In both, the climate crisis is being used as an excuse to reintroduce protectionist measures threatening economic damage and global stability. Expectations of what a UK outside of the EU could achieve were exaggerated, but nonetheless the country could be doing a lot better in its trade policy. There is no good reason for such tensions as exist with a broad range of frustrated stakeholders, the absence of clear purpose on UK strengths such as services, or the defensiveness that seemingly takes pride in secrecy and resistance to proper scrutiny. Adjustment time was inevitable, but six years should have been enough.
Topic:
Economics, European Union, Free Trade, and Trade Policy
Political Geography:
United Kingdom and Europe

6. New Frontiers: Estonia’s Foreign Policy in Africa

Author:
Kristin Adeoti
Publication Date:
10-2023
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
Estonia’s renewed foreign policy engagement in Africa holds a historical foundation proving that the country’s approach to diplomacy is a gradual development and a work in progress. In recent years, Estonia has taken several strategic steps to enhance its ties with African nations across the realms of diplomacy, security, economic relations, business partnerships, development cooperation, and humanitarian aid – and has already had some success stories. This drive reflects both an ambition and a commitment to building stronger bonds between Estonia and Africa. To strengthen ties with African states, Estonia must commit to continuous engagement on the levels of government, businesses, and people-to-people cooperation, while acknowledging the current challenges and limitations. Such a comprehensive approach – albeit a demanding endeavour involving multiple stakeholders – would foster mutual trust, forming the basis for genuine partnerships and sustainable progress. Today, it is of essence to recognise the immense potential that this relationship promises. Demographic growth, rapid economic development, and expanding IT markets on the continent boost its global influence. As Africa gains more weight in international affairs, Estonia can engage in a mutually beneficial exchange. Africa’s prospective influence and Estonia’s existing expertise lay the foundation for a partnership that will fuel innovation and drive progress.
Topic:
Security, Foreign Policy, Diplomacy, and Economics
Political Geography:
Africa, Europe, and Estonia

7. Quo Vadis, Belarus?

Author:
Zoran Meter
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
Year 2021 was one of the most turbulent for Belarus since its independence after the collapse of the USSR. In the West Belarus is sometimes called the “European North the global economic crisis in 2008 without too many problems and internal turmoil. Belarus has also successfully overcome problems with its neighbor the Russian Federation caused by Korea” and its longtime president Alexander Lukashenko, whom the West no longer recognizes, is dubbed “Europe’s Last Dictator.” Although this country is still to a large extent dug in its communist past, it has overcome disputes related to the content and dynamics of the implementation of the establishment of a Federal State between Belarus and Russia to which they previously committed.
Topic:
Economics, Governance, Leadership, Dictatorship, Pandemic, and COVID-19
Political Geography:
Europe and Belarus

8. The Price Cap on Russian Oil Exports, Explained

Author:
Catherine Wolfram, Simon Johnson, and Łukasz Rachel
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
If you’ve taken an introductory economics class, you were probably left with the strong impression that price caps are bad – they distort demand and discourage producers from supplying the market. So, why has Treasury Secretary Janet Yellen, the consummate economist, advocated so strongly for a price cap on Russian oil? The answer is that this price cap is different from the standard cap discussed in introductory economics classes. A standard price cap applies to all goods traded in a market. For example, in some countries there are price caps on bread for everyone or diesel for farmers or rent controls on housing. Such caps lead to excess demand for the good and insufficient supply, leading to shortages at the capped price. If prices are constrained, other non-price mechanisms, like first-come-first-served, are required to allocate the good. All too frequently, the result is empty bakery shelves or fuel shortages or difficulties finding housing. To understand why the cap on Russian oil is different, we first need to provide background on Russian oil trade and the proposed price cap.
Topic:
Economics, Markets, Oil, Exports, and Russia-Ukraine War
Political Geography:
Russia and Europe

9. Don’t Get Caught in the Middle: A Geo-Economic Strategy for Germany to Survive US-Chinese Rivalry

Author:
Markus Jaeger
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
The economic fallout from the war in Ukraine has been very significant. The consequences of a war in East Asia involving the United States and China would be much worse. And even if a Sino-US military confrontation can be avoided, geo-economic conflict between the two powers is going to intensify. Washington will put increasing pressure on Germany and Europe to align their policies with Washington’s geo-economic strategy.
Topic:
Economics, Strategic Competition, Rivalry, and Geoeconomics
Political Geography:
China, Europe, Asia, Germany, North America, and United States of America

10. EU carbon border adjustment mechanism faces many challenges

Author:
Gary Clyde Hufbauer, Jeffrey J. Schott, Megan Hogan, and Jisun Kim
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
This Policy Brief assesses the evolving EU Emissions Trading System and EU carbon border adjustment mechanism (CBAM) and explains objections within Europe and from major trading countries likely to be affected by the proposed CBAM import levies. While EU officials have sought to ensure that the CBAM is consistent with obligations under the World Trade Organization (WTO), key aspects of the CBAM could violate WTO rules and are likely to be contested, taking years to play out. Meanwhile, several other countries will adopt new carbon-inspired border restrictions, adding to global trade frictions. Major carbon-emitting countries, therefore, need to act cooperatively instead of unilaterally to both advance the fight against climate change and update the rules-based global trading system. Two-thirds of greenhouse gas emissions result from nontraded activities, such as road transport, electricity generation, and home and office heating. Countries can curb emissions in these activities, while developing guidelines for carbon abatement in traded sectors.
Topic:
Climate Change, Economics, International Trade and Finance, World Trade Organization, European Union, and Carbon Emissions
Political Geography:
Europe